Your cart

Your cart is empty

Thinking about working together?

Grab a free call to figure out if now is the right time to invest in your website.

What is Inventory Management?

Hey boutique owners!

In this post I’m diving into something so important to ecommerce businesses... and that is inventory management. What is inventory management - and why it's so important to your business.


So what is inventory management?

The basic definition of inventory management is just the process of ordering, storing, and using stock for your business. The goal is to always know where your stock is at any given time - these are your inventory levels.

What inventory you have depends on your business - for my own boutique that’s clothing and garments, but for example if you design and manufacture your own products, then it can include raw materials processing, as well as storage of those items in a warehouse. It might even be that your inventory is stored and fulfilled from somewhere else. But essentially, it’s all the stock you are carrying and how you manage it.

What is the Inventory Management Process?

Manual Vs Automated

There are two main ways to manage your inventory - manually or automated.

Some businesses literally do this the old fashioned way: pen and paper, but at the very least this would be managed in a spreadsheet:

  • what items you have in stock,
  • how many variants of the items.
  • details of those items,
  • where those items are located.

The advantage of this method is that it is really simple and basic. There's not a big learning curve, but the problem is there's also a lot of room for error. It's really really really time consuming.

And because it is manual, it's nearly impossible to get your data in real time, so you get a lag with data analysis and business decision making. And you want data analysis - that’s key!

In terms of automation, there are various programs designed specifically for inventory management.

In our view, because of the advantages over doing it manually, any inventory management system, even the one built into Shopify, is definitely going to be better and more helpful than not having something proper in place.

But the level to which you go depends on where your business is at right.


Some systems use barcodes and barcode scanners to really make things easy. In the warehouse, it would be well organized in terms of location and methods to pick stock.

Need help optimizing your website to increase your revenue?
That's what we do!

The nice thing about automated inventory management software is that it can be connected to your suppliers systems as well as your own, so you can really get insights at many different stages. These platforms can provide deep visibility and real-time insights across multiple supply chains, locations, and selling platforms, which is great if your business is complex.

They can be expensive, and it can be a little bit of an adjustment in terms of time and training to get up and running, but you can't really put a value on that time that it's going to be able to save you to be used in such better ways for your business.

Why do Inventory Management?

Here’s the thing: inventory management makes your life a whole lot easier.

Having overview of your stock means you won’t ever run out of essential stock, you'll always be able to fulfil orders that are coming in, and it will help you reduce wastage especially if any of your goods are actually perishable.

Also, the insights are invaluable.

Inventory management gives you data on your business, what is selling well versus what is sitting on shelves. It can help you identify products that you need to move quickly, or order more of.

This in turn makes your business leaner and more profitable.


How Inventory Management relates to Ecommerce

When it comes to ecommerce, there are two specific aspects of inventory management I want to draw out.

Firstly is the customer experience side: you want to make sure that to your customers, you're always accurately displaying what you have in stock on your website. This means that you avoid that unhappy customer situation, or a negative review because they ordered something and you could not fulfil it.

And on the back end, you want to know that what you're showing is indeed what you have in stock. When you have a large catalog of SKUs, it is vital that you have a robust management system to keep track of everything.

If you sell on multiple platforms, such as in store, or pop ups or Facebook, or your website, then you need a system that can track all of this and cross communicate.

The other aspect is the data analytics if you have a proper system in place. This will give you access to historical sales reports for business insights which can help you make better decisions on everything from fulfilment processes to running promotions.

Final Thoughts

So this is my high level guide to Inventory Management.

Whether you’re doing it manually or you have inventory management software, or your platform just has it already built in like Shopify, it's vital that you're paying attention to your inventory management system and that you're pulling reports from it to make key business decisions.

It is definitely worth paying attention to - always be watching your numbers.

Got a favorite inventory management program?

Let us know in the comments!



Book a call with our friendly team today!

Read Next


Previous post
Next post

Leave a comment

Please note, comments must be approved before they are published

Book your free call yet?

We are standing by. OK maybe not standing by, because that would just be weird. But we are here!