Inventory Management Techniques That Are Best For Your E-Commerce Start-Up - Biztorials

Inventory Management Techniques That Are Best For Your E-Commerce Start-Up


Inventory management is any e-commerce managers nightmare. You want to make sure all your physical products match what you have in the books. You want to make sure to exactly how much high and low margin products you have. You want to pay attention to the rate at which your products sell enough for you to know end up running out or having too much of the wrong products.

It’s a pretty uninteresting part of the business. No wonder some e-commerce seller chose to not get involved in that part of the business. As dull as inventory may be, it is one of the most important aspects of e-commerce because you can only sell what you have.

We’ll be taking a look at some of the best systems or techniques for inventory management that e-commerce startups can adopt to make their businesses run smoothly.

If you’re starting up an e-commerce platform, you might want to start taking notes;

First-In First-Out (FIFO):

“First-in, first-out” is an important principle of inventory management. It means that your oldest stock (first-in) gets sold first (first-out), not your newest stock.
This is particularly important to you sell perishable products on your site, so you don’t end up with unsellable spoilage in your warehouse. It’s also a good idea to practice FIFO for non-perishable products. If the same boxes are always sitting at the back, they’re more likely to get worn out.
Plus, packaging design and features often change over time. You don’t want to end up with something obsolete that you can’t sell. You want to make sure you feature your oldest stock in front and promote them as much as you can.
However, for e-commerce, you cannot only promote old products and neglect new brands and styles or your store will look obsolete. You want to find a balance between the two at all times.

Prioritize With ABC

Some products need more attention than others. Use an ABC analysis to prioritize your inventory management. Separate out products that require a lot of attention from those that don’t. Do this by going through your product list and adding each product to one of three categories:

A – high-value products with a low frequency of sales
B – moderate value products with a moderate frequency of sales
C – low-value products with a high frequency of sales

Items in category A require regular attention because their financial impact is significant but sales are unpredictable. Items in category C require less oversight because they have a smaller financial impact and they’re constantly turning over. Items in category B fall somewhere in-between.

Just In Time:

Just-in-time inventory system assumes that the purchase of inventory has to be just in time of use. Jit refers to process of acquiring material (inventory) as they are needed. JIT reduces inventory by purchasing and storing lower quantities of inventories as much as possible.
The objective of JIT is to maintain inventory as low as possible. Sometimes, it may even be at zero level. Thus, under JIT, the inventories are received in time or purchased in time of use. It is only possible when the supplier can be relied on for making the delivery of goods on time without compromising the quality.


If you don’t already utilize dropshipping, it is definitely worth trying it. With dropshipping you don’t have to keep inventory on hand. You instead establish a relationship with a supplier who will hold, manage, and ship your inventory to your customers.
Dropshipping is really the ideal scenario from an inventory management perspective. Instead of having to carry inventory and ship products yourself—whether internally or through third-party logistics—the manufacturer or wholesaler takes care of it for you. Basically, you completely remove inventory management from your business.