Inventory Management Techniques to Automate Your eCommerce Business


Inventory management is more and more critical to your operations as you’re scaling your eCommerce business.

Backorders, lag time, and order defects can really affect your online performance – not to mention the customer experience. And, slow or dead inventory ties up your cash flow and warehouse space, limiting your ability to experiment with new suppliers or product lines.

Unfortunately, the dark side of high-volume selling is that it can take a toll on your resources.

Why invest in inventory management automation software

When you sell on multiple channels, you’re constantly juggling between sites, managing listings, orders, inventory, and shipping. To maintain this volume without sacrificing quality, you generally have two options:

  1. Scale your team.
  2. Invest in automation software.

Adding more people to your operations team is not always a smart move because you’ll need to invest in training and managing them. Not to mention the associated costs, like additional office space, for example. Also, there is no guarantee they will stay with your company either.

By contrast, inventory management software can stabilize your operations, streamlining many tasks that would normally require manual processing.

Automating your business isn’t as easy as plug and play. It usually requires careful planning and research, and it often involves tedious implementation.

Since there are countless approaches to inventory automation, we recommend reviewing these 5 best practices and identifying which ones work best for your business.

Consider using barcode scanners

When you’re dealing with inventory and orders daily, accuracy is highly significant.

Entering SKUs into a computer or tablet is a laborious process that takes a lot of time and often leads to mistakes. Poorly tracked inventory on spreadsheets can cause discrepancies while a mis-pick or mis-ship can lead to angry customers.

You can avoid these problems by investing in barcode scanners when handling physical inventory.

Barcode scanners boost the efficiency of counting, receiving, picking, and shipping inventory. When combined with a warehouse management system (WMS), you gain valuable data about inventory movement and how you can further optimize your business operations.

Top rated barcode scanners in 2018

Nadamoo – Easy to configure, wireless connection, reliable, integrates with different scanner apps, pairs with tablets, quick battery charge.

TaoTronics  – Easy to use, wired scanner, fast setup, interfaces with Excel, automatic scan, lightweight.

Inateck – Wireless USB automatic scanner, can read curved surfaces, preset configuration, offline scanning.

Brainydeal USB – Practical design, affordable, easy to use and install, automatic scanning (up to 100 scans per second), supports a wide range of barcode types;

Symcode USB – Affordable, lightweight, doesn’t require further software or app installation, compatible with Windows, Mac, Linux, works well with Excel and Quickbooks, supports a wide range of barcode types;

Identify your bestsellers and poor performers

Undoubtedly, some of your products sell better than others.

Perhaps you have one shirt design that sells 1,000 units per month while another design only sells 100 units per month. Knowing which items sell better than others should play a crucial role in how you manage your inventory.

When you create reports that analyze which product sells better, you give yourself the ability to forecast demand and seasonality.

Good inventory reporting tells you which products you will need to order more frequently and which ones you’ll need to order less.

If you don’t reorder them in time from your supplier, then your customers won’t be able to purchase the items and they could end up going to a competitor.

By properly tracking and identifying your bestsellers, you can plan ahead, rearrange your warehouse picking paths as needed, and find ways to reduce slow or stale inventory. One option would be to bundle your bestsellers and poor performers at discounted rates.

You should automate and centralize your reports whenever possible, so you have visibility across your sales channels and warehouses. Ideally, you should have inventory management software that will track your bestsellers and automatically reorder them for you based on stock projections.

Try cycle counting while keeping your operations going

Even if you have reliable inventory management software, you need to use a physical inventory auditing technique to make sure you have the right number of products in your warehouse.

Unfortunately, annual physical counting can be disruptive, as it can force your team to shut down operations while you count every item in your warehouse.

Cycle counting offers several benefits over other physical auditing techniques. With cycle counting, you focus on specific subsets of your inventory throughout the year, auditing only a number of items in a specific location on specified days. This approach lets you count items accurately while your warehouse operates with minimal interruptions.

There are a number of ways to implement cycle counting, but the 3 most commonly used methods are ABC inventory analysis, control group cycle counting, and the random sample method.

ABC inventory analysis is a system for inventory control, sometimes referred to as selective inventory control. It uses three distinct categories, each of them has a differing management control. The three classes are the following:

  • A – category for items that are critical to the business
  • B – category for items of average or middling importance
  • C – category of relatively unimportant items

In order to avoid tied up capital in inventory levels, warehouses and manufacturers should analyze inventory frequently, observing excess stock or obsolete stock. Checking this helps maintain a better flow for reordering.

Control group cycle counting is the process of counting a small and predetermined number of items on a frequent basis. The purpose of this method is to determine records that are incorrect and fix the cause of the error. Amongst the benefits of using this technique, we can identify reduced costs, increased productivity, reduction in returns and efficient operational flow.

The random sample method is used to determine the current inventory accuracy level. It is focusing on a particular segment and it implies physically counting a specified number of randomly selected items within that category.

Whichever method you adopt, it’s best to stick to that pattern and use as much automation as possible, such as barcode scanners synced to your warehouse management system.

Connect and integrate your sales channels

Like most eCommerce companies, you probably take a multi-channel approach to reach your customers.

You may sell your items on Amazon, eBay, Walmart Marketplace, and also on your own website.

This is necessary because consumers expect your product to be where they want to purchase it. It also takes time to keep all your listings, product content, and inventory in sync.

It is a full-time job, but really shouldn’t be.

The alternative is to connect and integrate your sales channels, so you can control them from a single location.

When you integrate your sales channels, you can track your products, orders, and inventory more easily. You’ll also gain the ability to spot bestsellers and poor performers across different channels and marketplaces. Sales channel automation is key to having an efficient eCommerce operation.

How to integrate your sales channels with your website:

Shopify Plus

  • From your Shopify admin, click the + button beside the Sales channels heading
  • Click desired sales channel from the Add Sales Channel dialog
  • Click Add Channel
  • On the sales channel page, click Connect to (name of sales channel)
  • Follow the prompts to allow information to be shared, confirm developer access for Shopify


  • From the Bigcommerce admin area, go to Channel Manager
  • Click Get Started (for the desired sales channel)
  • Check View Requirements
  • Set up the next steps required by the sales channel

Magento does not support marketplace integrations out of the box. There is a variety of extensions that allow marketplace integration, depending on the sales channel. 

Woocommerce, just like Magento, needs additional plugins to be able to connect to different marketplaces. The most commonly used ones are WC Marketplace, Zoho Inventory or Veeqo.

Find the right inventory management software for your business

Inventory tracking technology is an essential part of inventory automation. It can be very challenging to find the right platform to suit your needs because every retailer has unique requirements.

Traditional sellers may use their brick-and-mortar shop both as a storefront and a warehouse, while omnichannel retailers manage to integrate the online and offline experiences through options such as ship-to-store, ship-from-store and buy-online-pickup in-store (BOPIS).

On the other hand, online-only stores might not have inventory in their own warehouse, choosing to work with Amazon FBA, drop shippers or third-party logistics providers (3PLs). Many high-volume sellers and wholesalers use a combination of all of the above. These sellers often require API and EDI integrations with several marketplaces and B2B channels.

All in all, when shopping for an inventory management software, you should seek a platform that offers real-time inventory tracking, multi-channel integrations, warehousing capabilities, and business intelligence tools. These are minimum automation features that will make your business more efficient and deliver a great return on investment.

The key is to first understand your business and to plan where you want to take it next. Only then can you choose automation tools that will meet your specific goals and help you succeed as a retailer.


Author Bio

This blog was written by Albert Ong. Albert is the marketing manager at Jazva, an all-in-one eCommerce platform for multi-channel sellers. He has over 5 years’ experience writing articles and guides for eCommerce audience, including technical on-site content, and software documentation.

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