What is Ecommerce Inventory Management (Your Simplified Guide)


inventory management,ecommerce inventory management,ecommerce,inventory management software,inventory management system,e-commerce inventory management,inventory,ecommerce inventory,inventory management in excel,online inventory management,inventory management for ecommerce,inventory control,ecommerce inventory management system,best inventory management software,ecommerce inventory management software,sales and inventory management system

Hello and welcome back to the place where you can get all the latest in e-commerce and selling online.

Let's start our article today; Certainly, an online store needs a few things to be successful, such as: an attractive and convenient website to use, an efficient delivery and shipping plan, as well as being aware of stock status and locations.

Unfortunately, many stores make some fatal mistakes that cause their failure, and one of the most famous of these mistakes is the inability to implement the e-commerce inventory management system, which is a very vital and important element for managing your e-commerce in general.

So it is very important that you understand your e-commerce inventory management, if you want to maintain a thriving and growing business this year, and all years.

In this guide we will briefly give you all the information you will need in order to manage your e-commerce inventory; From what it is to the steps and strategies you should apply.

What is ecommerce inventory management?

Ecommerce Inventory Management, simply put, is: “The process of monitoring the number, places, prices and marketing mix of e-commerce products in all your e-commerce channels, i.e. in short, supply management.”

Through the management of e-commerce inventory, you can quickly determine whether your inventory is suitable, less than your need, more than your need, or out of the market, and this Ecommerce Inventory Management will also allow you to adjust your business operations quickly and efficiently.

Inventory is one of the important assets necessary for your project, which you can think of as a deferred investment after the sale, and according to all of the above, inventory management is a big and critical problem for all businesses of all sizes, whether electronic or traditional.

When you manage inventory poorly, you will be exposed to many risks and financial problems. This makes it necessary to have a good inventory management system and strategy.

Alternatively, you can use the off-the-shelf systems offered by companies, which are companies that have developed methods for capturing the characteristics and indices of real-time inventory through several standards they have set, as well as models such as TVP-VAR to test for time shocks in the market.

Relying on these systems will be a very important investment in managing your inventory, keeping track of it, ensuring its condition, and handling it properly.

An inventory management method must be able to ensure that there is no increase or decrease in supply, and a business has several ways in which its supply can be managed; These include manufacturing products on demand, and planning for resource needs, which automatically determines inventory purchases based on expected sales in a specified time period.

Read also: Why learning Chinese has become a smart decision in recent years

Steps to develop e-commerce inventory management

I will now explain the five basic steps of e-commerce inventory management that you should be aware of and apply:

Step one: Analyze the demand for products

Product demand is simply the desire of customers to purchase a product or service at a specified price, and it is a fundamental economic factor that controls the returns of businesses and businesses.

Understanding the demand for your products and how it will change over time - taking into account different factors and aspects such as seasons - is the first thing you should do.

This analysis is an essential step and process that you must take care of, especially if you are going to introduce a new product to the market.

You may need some tools like Google Trends to see which products are trending and which are in demand at the moment.

The second step: anticipate the demand for products in the future

Product Demand Forecasting is the process of forecasting and estimating the future demand for a service or product using predictive analysis based on past sales data.

Although it is based on your previous sales data, this prediction will not be completely accurate, but it will be practical and will make a lot of things easier for you, and a lot of e-commerce inventory management strategies are built on it as we will see shortly.

It is also important not to forget to take into account the different times of the year such as holidays, when demand changes dramatically.

Step Three: Maintain a minimum supply

The term “Minimum Stock Level” or in English “Minimum Stock Level” refers to the guiding number of products of the minimum supply which the supply of materials shall not and shall not be allowed to be less.

This step is necessary in order to prevent any product delays or shortfalls, but keep in mind that this minimum changes based on the demand for each of the products you offer.

Step Four: Prioritize Products

In this step, you need to choose which products, features, and activities your engineering and product management teams will focus on and prioritize.

To determine which needs are the most priority, divide your products into three categories: high-value products, medium-value products, and low-value products.

Step Five: Prepare for the upcoming seasons

Seasons like mid-year, holiday, etc. greatly determine the future increase in demand, which are the times that you should prepare for by making sure that your stock is ready especially for products that have performed well in previous seasons.

Read also: Ads Targeting Guide for Beginners

Best Ecommerce Inventory Management Strategies

There are a lot of strategies that will help you manage your e-commerce inventory, which will help you control inventory and increase your income.

The most important of these strategies are:

Strategy One: FIFO Priority Access

FIFO (First In, First Out) strategy is one of the most important and widely used e-commerce inventory management strategies.

As it is about making sure that the products that are oldest in stock (First In) have priority to be sold first (First Out), and not sell the newer products first as we will see in another strategy to come.

This strategy will help you greatly in dealing with products that have a certain expiration date or may spoil.

The second strategy: ABC prioritization

The second strategy on our list is ABC prioritization, which will help you manage your ecommerce inventory by value and its impact on your income.

You initially search and evaluate products according to their value in your inventory based on their profitability, so that you divide products or inventory into three categories:

Class A: The percentage of inventory responsible for 75% of your income.

Class B: Inventory percentage responsible for 15% of your income.

Class C: The inventory percentage responsible for 10% of your income.

Strategy Three: LIFO Priority Exit

This strategy is the opposite of first-come-first-served, as it means making sure that it is the last or first products that are sold first (First Out).

Fourth strategy: JIT real-time inventory management

JIT (Just-In-Time) Inventory Management isn't for everyone, it's for the brave people who can take risks.

Where with this strategy you will store the minimum amount of the product that fulfills your operations, and you will compensate for it before exiting or selling any component of it.

Fifth Strategy: Predicting Accurately

Precisely forecasting is a very great strategy for doing your inventory management, in short you control your inventory based on the number and quantity of orders you anticipate.

It is a strategy that relies on analyzing and understanding your past sales data, taking into account the different seasons.

However, with many influencing factors, which are included in the forecasting process, and it is difficult to know all of them without some knowledge of upcoming orders, it will be difficult to rely on this strategy alone.

However, this method is practical, although not completely accurate, and will enable you to determine roughly how to manage your inventory.


Ecommerce Inventory Management is a very important component of e-commerce, which will help you handle your supply accurately to ensure order fulfillment and customer satisfaction.

So it is very important that you manage your inventory plan carefully, especially if you are just starting out in your e-commerce career.

We hope that you have benefited from our article, and if you have any question or inquiry, ask us in the comments, and we will answer you as soon as possible.

Mahmoud Ashour
By : Mahmoud Ashour
Mahmoud ashour

Font Size
lines height