The Importance of Inventory Management for e-Commerce

Posted by Ma. Jessica Paula Florita
May 06, 2022
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Why is inventory management important? 

Behind the running success of an e-commerce entity is the inventory management that balances the supply and demand of the business. There are different upsides to doing this practice — along with it are a multitude of opportunities for your online venture's growth. 



How important is inventory management? 

Errors, miscalculations, deadstock and expenses go from a minimum to none when a smart inventory approach is implemented. You reap efficiency, accuracy and a better relationship with your customers when you do so.   

To give you a bigger picture, here are several benefits of placing a conducive inventory management system. 


1. Cash flow improvement

Good management of your stock allows you to sell only what's on-demand and gives you an ideal ballpark on how much to spend for your inventory. This way, cash continues coming into the business and prevents irrelevant cuts from your bottom line.

2. Safe stock levels  

A safe balance of inventory is critical for an e-commerce. With an optimal inventory level, you can avoid unnecessary stockouts, spoilage of consumable commodities, deadstock and overstocks.

3. Reduced errors

This advantage comes with an automated approach for inventory. An aid from a tool or software to monitor your stock keeps the margin for error notably less. It's also worth noting that mistakes in this area are painfully expensive, so it won't hurt to invest in a practical solution such as a cloud-based software.

4. Having inventory forecasts

A good inventory management for e-commerce business gives you an idea of future purchase trends, track recalled products and any bottlenecks (product expiry, stock shortage, etc.) that can happen.

5. Improved fulfillment performance

Efficient order fulfillment is a good upside to inventory management. Turnaround times are quicker and consumers get their hands on your product faster, translating to a good relationship between you and them. 


Now that you know why is inventory management important, you have an understanding as well on how it can make or break your e-commerce business.  Harnessing the right tools and deploying inventory management practices will back you up in optimizing both your front-end and back-end offices, leading to a successful enterprise.  

If you need a helping hand in your e-commerce accounting, D&V Philippines can be your partner. Our specialized finance and accounting solutions harness the power of automation and technology, combined with the expertise of our in-house accountants. You can download our whitepaper Succeeding Online: Refining Your Accounting Processes Through Technology And Automation today to know more or you can schedule a free consultation to discuss what we can do to help your growing business.  


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