Managing Inventory In An Ecommerce Store

Because inventory causes exponential pain with multiple warehouses... This infographics shows how to manage inventory in this context: ➡️ Centralize Inventory Visibility ↳ Issue: not knowing inventory levels across locations can lead to overstock in one warehouse and stockouts in another ↳ Action: Implement an inventory management system/ ERP that shows real-time inventory positions for all warehouses in one snapshot ➡️ Classify Products and Prioritize ↳ Why: Not all SKUs deserve the same treatment; some are high-value, others are seasonal ↳ Action: Use ABC analysis to rank products by focusing on A-items for tighter control ➡️ Define Replenishment Rules by Warehouse ↳ Why: Different warehouses cater to different regions or demand patterns. One-size-fits-all reorder points (ROP) won’t cut it ↳ Action: Tailor ROP, safety stock, and min-max levels by location. Consider lead times from central distribution centers or suppliers for each site ➡️ Breakdown Forecast by Warehouse ↳ Why: Each warehouse faces unique market dynamics ↳ Action: Generate warehouse-level forecasts, combining local sales trends with broader S&OP inputs ➡️ Plan Transfers Strategically ↳ Why: Sometimes it’s of lower cost or faster to transfer stock than reordering from suppliers ↳ Action: Set up a transfer framework; regularly review surplus vs. deficit at each location. Automate triggers for transfer orders when it’s cost-effective. ➡️ Monitor KPIs Proactively ↳ Why: Multi-warehouse complexity can hide inefficiencies when not tracking the right metrics ↳ Action: Track fill rate, inventory turnover, stock aging, and transfer costs at each site. ➡️ Plan Direct Dispatches & Save Costs ↳ Why: Dispatch directly from the plant to save logistics costs ↳ Action: Prepare daily dispatch plans targeting direct replenishment from the plant and use these warehouses for milk runs for distributors Any others to add?

Suppliers can make or break a Procurement team. And yet, supplier relationship management (SRM) remains an underutilized tool for many teams because of lack of time, resources, or know-how. 💡What is an SRM framework? A set of structured strategies and processes intended to enhance supplier performance and build relationships that can deliver a competitive edge. 💡 How do you use it? 1️⃣ Segment suppliers so the right SRM approach can be administered to each supplier. Make use of Kraljic matrix, preferencing, etc. I managed Spices commodity - a market with many suppliers and many customers. The category was largely transactional with the exception of some high profitability SKUs. 2️⃣ Measure supplier performance with defined KPIs and assess regularly to provide actionable feedback. It requires regular upkeep. A client of mine faced supplier performance issues repeatedly across several locations. There were no agreed upon metrics so there was no reliable way to track performance and deliver improvements. A scorecard solved the problem, even if it took months to roll out. 3️⃣ Build relationships through specific strategies based on segmentation. Set up recurring update calls. They are a great way to stay abreast of supplier performance, stakeholder feedback, new business needs, and changing market conditions. I had a bottleneck category with a development supplier. mutual win was to leverage the supplier’s innovation capability while de-risking supplies. So, our meetings would cover supply market risk + NPD discussions. 4️⃣ Assess and mitigate risk Identify risks associated with each supplier, be it financial, supply disruption, sustainability, etc. Risk can be rolled into the performance score card as well. Mitigation plans can include alternate supplier development, or build in contingency plans. 5️⃣ Manage relevant aspects through contracts Usually a part of category strategy development, but deserves special mention when obligations must be contractually defined (for ex., strategic alliances, performance improvement plans, etc.) 6️⃣ Ensure alignment with Procurement and Business goals The ultimate goal of any SRM program is to further overall business objectives. During the COVID years, cost became a second priority to supply assurance across many categories. Many of us tinkered with our strategies to rebalance priorities. Supplier communications became far more frequent to better understand market conditions, waivers were given on key KPIs like On Time In Full, etc. 💡Why do I like it? It is a simple framework which is heavier in execution.. as it rightly should be, given that it takes time to build relationships. 💡What are the pitfalls of this approach? While the approach itself is solid, organizations face challenges due to poor data management coupled with a lack of integrated digital solutions that can seamlessly weave in SRM with day-to-day Procure-to-Pay activities including contract management.

Companies often tell me they aim for a 100 percent service level. No stock-outs, no delays. But let me be clear. This is a fantasy. From a mathematical standpoint, if demand is uncertain and unbounded, then guaranteeing a 100 percent service level would require infinite inventory. And infinite inventory is not just expensive. It is impossible. I have seen organizations pour energy into improving forecasts or fine-tuning safety stock formulas in pursuit of perfection. But the real problem is not forecasting. It is failing to frame the decision properly. At its core, inventory management is a trade-off between two competing costs. On one side is the cost of holding inventory. On the other is the cost of a stock-out. That is the real decision. How much are you willing to spend to reduce the risk of running out? You cannot escape this trade-off by getting better data. You have to model it. That means assigning a cost to stock-outs, possibly a very high one if the business impact justifies it, and comparing it directly to the cost of extra inventory. As you add inventory, the reduction in stock-out risk becomes smaller and smaller. Those are diminishing returns. Somewhere in that curve is an optimal point. That is the level where your investment in inventory delivers the best return for your business. And I can tell you right now, that point is not at 100 percent. The goal is not perfection. The goal is balance. It is making smart decisions under uncertainty that maximize long-term performance.

Want to burn money and frustrate customers? Just throw every SKU into every warehouse. Here’s the problem. Too many brands spread their inventory thin, across too many warehouses. It feels like the right move. “Closer to customers means faster shipping,” right? Wrong. When you throw every SKU into every warehouse, you create chaos. Inventory counts become inaccurate. Popular SKUS sell out in key regions. Dead stock sits untouched collecting dust in the warehouse. Eating up precious space and $$$ And your 3PL? They’re scrambling to clean up the mess. Instead of faster shipping, you’re left with longer delays, higher costs, and upset customers. The fix? Be intentional about what goes where. First, know your SKU velocity. What products move fastest in specific regions? Stock them accordingly. Don’t let slow movers clog up valuable space. Next, leverage data to match supply and demand. Use historical sales data to predict regional demand. Your warehouses should be aligned with where customers are actually buying. If your fulfillment provider can do this for you, you have a REAL winner. Last, create a consolidation strategy. Centralize low demand SKUS to a single location to avoid dead stock. Stocking every SKU in every warehouse doesn’t speed things up. It slows you down. Be strategic, save money, and keep your customers happy. Messy networks don’t scale. Smart strategies do. #ecommerce #warehousing #fulfillment

Inventory will make, or break, your Amazon FBA business.   You can take all the right actions with your marketing to scale your sales on Amazon.   And your sales grow, let's say, 37%. 🤑   And your listing rank went from 4,372 to 2,371 organically. 🎉   But if you forget to ship your product in on time…   In just one week your organic rank will revert from 2,371 to 4,372+. 🙁   Organic rank comes slowly.   It goes quickly.   Staying in-stock is critical if you want to succeed on Amazon.   Start with ABC classification.   Break your products into three tiers:   A Tier: Greater than 5%   B Tier: 1-4.99%   C Tier: Less than .99%   Next, identify your lead time - how many days does it take to get product in?   Finally, identify your unit sales velocity.   Combine these three together, ABC classification, lead time, sales velocity.   Build an excel & run the report weekly to identify what is running low based on your recent sales velocity, & how soon you need to ship accounting for lead time.   Analyze your excel every Monday.   Never let you’re A tier go OOS.   Always keep up with B tier products, trying to get the lead time just right.   For C tier, do your best, but if cash is tight, or time is thin, it's okay to go OOS on C tier's occasionally as it will be low impact on your sales.   #Amazon #Inventory #ecommerce #digitalmarketing #sales

Deadstock is a silent killer. Here’s how to fix it. At Chubbies, we lived and died by inventory efficiency. But early on, we learned the hard way: Deadstock isn’t just excess inventory—it’s locked-up cash, wasted storage costs, and a slow bleed on margins. If you run a $20-$50M brand, you already know how quickly unsold products accumulate. A seasonal bet misses. A SKU doesn’t hit—consumer demand shifts. You’re sitting on thousands of units, hoping discounts will move them. And these products are not fine wines—they don’t age well. Here’s how we solved it: 𝟭. 𝗦𝗽𝗼𝘁 𝗶𝘁 𝗲𝗮𝗿𝗹𝘆 Track sell-through rates and aging inventory at the SKU level. If an SKU isn’t moving at the pace you expected in the first 30 days, your system needs to notify you, and you need to take action. It’s now a liability. 𝟮. 𝗧𝘂𝗿𝗻 𝗶𝘁 𝗶𝗻𝘁𝗼 𝗰𝗮𝘀𝗵 Be proactive. Run flash sales, try unique bundling promotions, or offload to discount channels as a last resort. The cash from these products will feed your future product winners! 𝟯. 𝗡𝗲𝘃𝗲𝗿 𝗺𝗮𝗸𝗲 𝘁𝗵𝗲 𝘀𝗮𝗺𝗲 𝗺𝗶𝘀𝘁𝗮𝗸𝗲 𝘁𝘄𝗶𝗰𝗲 Audit past buys, tighten demand forecasting, and set hard rules for re-ordering so you don’t repeat bad inventory bets. Deadstock isn’t just a storage & operational issue—it’s a profitability killer. Fix it early, or watch it compound. What’s your deadstock horror story? Let’s talk👇 #deadstock #inventorymanagement

I've seen it happen countless times. A brand with 35.6% profit margins and 153.7% year-over-year growth suddenly finds itself cash-strapped. How is this possible? After managing $200M+ for top eCom brands, I've identified the core issue: Inventory payment cycles are completely misaligned with Amazon's payment schedule. Here's the brutal math: → You pay for inventory 2.5 months before it sells (1 month production + 1.5 months shipping) → Amazon pays you every 14 days after sales → Each reorder grows larger to support increasing sales This creates a fundamental cash flow challenge that most sellers don't anticipate. In one case study, a brand generated $1.96M in total profit over 2 years but ended with a negative cash balance of -$15,446. The faster you grow, the worse it gets. When I bought Walkize (now a multi-million dollar brand), I immediately implemented these cash flow strategies: 1. Map your cash cycle Document every step from inventory purchase to payment receipt 2. Create rolling cash flow forecasts Project 6-12 months with weekly detail 3. Calculate capital requirements Add 20-30% buffer to projections 4. Secure financing before needed    Explore inventory financing, lines of credit, or Amazon Lending 5. Establish contingency triggers    Define minimum cash thresholds Remember: Profit doesn't equal cash. The critical metric is the ratio between your growth rate and your cash conversion cycle. For every 100% annual growth, plan for 50-100% more working capital. What's your cash flow strategy for scaling your Amazon business?

This accounting error cost three of our clients over $400K in the last 6 months. Improper inventory management. Your inventory reports are lying to you.  Most brands aren't accounting for landed costs, freight, shipping, duties.  The errors add up fast, especially as you scale. Here's the bigger problem: Most brands don't reconcile inventory until the end of the year.  The discrepancy can be huge by then. You may have too little inventory.  You may have too much inventory.  Either way, you're losing money. Reports from 3rd party shipping companies show quantities, NOT values.  You're flying blind on actual costs. We always do a mid-year inventory reconciliation at minimum.  Some clients need it monthly, others quarterly.  But waiting until December is financial suicide. Brands need physical inventory counts that match their books.  You don't need to know down to the cent, but you need to know if you're bleeding cash. The scaling brands that survive are the ones that catch these discrepancies early. #inventory #accounting #ecommerce #business #scaling

How to Manage Inventory During Black Friday & Cyber Monday 🛒 One of the biggest challenges of Black Friday and Cyber Monday is managing inventory. At Blade Commerce, we know that a successful BFCM campaign requires not just great marketing, but also flawless inventory management. Here’s how to keep things running smoothly: 1️⃣ Forecast Demand // Use historical data and current trends to forecast demand for your products. This helps ensure you have enough stock to meet customer expectations without over-ordering. 📊 2️⃣ Set Inventory Alerts // Implement inventory alerts to notify you when stock levels are low. This allows you to restock in time or adjust your marketing strategy to avoid disappointing customers. 🔔 3️⃣ Optimize Fulfillment // Streamline your fulfillment process to handle the increased volume of orders. Ensure your team is prepared, and consider temporary staffing if necessary to keep things running smoothly. 📦 🌟 Pro Tip // Offer back-in-stock notifications for popular items that sell out quickly. This not only retains customer interest but also provides valuable data on demand. 📧 Effective inventory management is critical for a smooth and successful BFCM. Make sure you’re prepared to handle the surge in demand without missing a beat. 🚀 #BFCM #BlackFriday #CyberMonday #InventoryManagement

Common errors in inventory management can lead to inefficiencies, stockouts, or overstocking, which can hurt business operations. Here are some of the most common errors: 1. Inaccurate Demand Forecasting Issue: Underestimating or overestimating customer demand can result in stock shortages or excessive stock. Solution: Use historical data, market trends, and advanced forecasting tools to predict demand more accurately. 2. Lack of Real-Time Inventory Tracking Issue: Without real-time data, businesses may make decisions based on outdated information, leading to stock discrepancies. Solution: Implement inventory management software that provides real-time updates on stock levels. 3. Overstocking Issue: Carrying more inventory than needed ties up capital, increases storage costs, and risks spoilage (for perishable items). Solution: Use just-in-time (JIT) inventory methods and monitor stock levels closely to avoid over-ordering. 4. Stockouts and Backorders Issue: Running out of stock can lead to lost sales, unhappy customers, and production delays. Solution: Set reorder points and safety stock levels to maintain optimal inventory. 5. Poor Supplier Management Issue: Unreliable suppliers or delays in deliveries can disrupt inventory levels. Solution: Build strong relationships with multiple suppliers and monitor their performance regularly. 6. Manual Data Entry Errors Issue: Manually inputting data can result in mistakes like incorrect stock counts or mismanaged orders. Solution: Automate inventory processes with barcode scanners, RFID systems, or integrated software. 7. Lack of Proper Categorization Issue: Failing to categorize products can make it difficult to track stock levels, reorder items, and assess inventory performance. Solution: Use SKU (stock-keeping units) and categorize inventory based on factors like sales velocity, product type, and demand. 8. Ignoring Inventory Audits Issue: Without regular audits, inventory discrepancies may go unnoticed, leading to incorrect stock levels. Solution: Conduct regular cycle counts or annual physical inventory audits to ensure stock accuracy. 9. Inefficient Warehouse Layout Issue: A poorly organized warehouse can slow down picking and packing, resulting in delays and errors. Solution: Optimize warehouse layout based on product movement and demand, using a logical system to minimize time and labor. 10. Failure to Manage Obsolete Inventory Issue: Holding onto obsolete or slow-moving stock can lead to wasted storage space and sunk costs. Solution: Implement strategies like discounting, bundling, or liquidation to move old inventory and free up space for high-demand items.