Ecommerce Inventory Management for Manufacturers

What is ecommerce inventory management?

Warehouse management system helps the process of ordering, storing, and using raw materials, components, and finished goods.

The only difference between inventory management and ecommerce inventory management is that the latter focuses on products sold exclusively over the internet. Improving your ecommerce inventory management is key for sustainability, profitability, and growth. Essentially, it helps to:

  • Track items in your warehouses
  • Track items provided via third-party fulfillment centers
  • Track items stored with outsourced manufacturers
  • Track consigned inventory
  • Track items sold via dropshipping
  • Monitor the omnichannel sales strategy

Why implement ecommerce inventory management?

Ecommerce inventory management is important to ensure the accurate tracking of stock needed for online sales, without affecting the inventory for brick-and-mortar stores. 

Setting reorder points helps you avoid overstocking and stockouts. It’s also essential to improve your supply chain management and understand where your products and materials are at any given time. Below, we look at the top benefits of ecommerce inventory management:

Customer relationship management

Any manufacturing business, regardless of the specific industry, aims for high customer retention rates and strong customer loyalty. Customer satisfaction is critical for success, considering that customer retention is cheaper than customer acquisition. Optimized ecommerce inventory management helps to avoid delays and manufacturing lead times, both direct contributors to customer satisfaction.

Control over the moving parts of inventory

Optimized ecommerce inventory management means you can effectively manage raw materials, finished goods, WIP inventory, and third-party stored inventory. This means you can easily identify your best-selling products (all time or based on seasonality), enabling you to stock the right amount of inventory according to demand expectations.

Improved efficiency

It is clear that ecommerce inventory management is crucial for any online product-making business. From supply chain and supplier relationship management to optimized stock and lean processes, it helps your business be more productive and efficient.

Challenges of ecommerce inventory management

Managing inventory from an ecommerce platforms

Many manufacturers choose ecommerce platforms like Shopify or WooCommerce to build their website. While these platforms offer inventory management options, they’re best suited for dropshippers or resellers. Manufacturers need to keep track of raw materials, processes, machinery, and employee tasks to name a few. That’s why the native options provided by ecommerce platforms fall short of satisfying manufacturers’ needs. 

Manufacturers need to make use of smart technology, such as modern manufacturing software that seamlessly integrates with their ecommerce platform of choice, as well as other business essentials such as accounting or shipping tools.


Without proper insights into customers’ habits it is difficult to estimate demand, and many entrepreneurs make the mistake of overestimating their inventory needs. This leads to overstocking, which means that cash is held in inventory, decreasing profit margins.

Lack of data

As discussed above, a business’ success depends on the ability to make informed decisions based on accurate information. Without proper ecommerce inventory management you will not be able to understand what your best selling items are, what items perform poorly, how inventory fluctuates, and where the raw materials are at a given time. Answering these questions is crucial to improve profitability.