INVENTORY MANAGEMENT   |   4 minute read

3 system options for managing inventory in your eCommerce business

Within the rapidly evolving world of eCommerce, managing inventory is a key pain point that prevents many businesses from achieving the growth they’re capable of. It’s an investment of both time and often cash, to research, choose and implement an inventory system that will work for your business. However, it’s a worthwhile one as it will become the foundation of your growth: what’s an eCommerce business without a strong handle on its inventory levels?


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There are three main ways to manage inventory – here we present the options, along with their pros and cons, and the type of business most suitable for using them:

#1 Tracking inventory via spreadsheets

In the startup stages of your business, using a spreadsheet is a perfectly acceptable way to manage your inventory. Tools such as Microsoft Excel and Google Sheets have plenty of functionality to get you off to a good start, and are also free. With a spreadsheet, you can pre-define the relationships between the cells in the table, so that changing one cell (for example, inventory count) can affect another cell (like the point at which you need to reorder).

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However, there are risks associated with using a spreadsheet, some of which are hidden. Here are some of the key ways competing in the ‘spreadsheet Olympics’ can hinder your growing business:

  • Risk of data mismatch: Having one master spreadsheet and one person responsible for maintaining and updating it, means that there is a risk of human errors. And if that person leaves the business, they may take that knowledge with them, so consistency across the business is therefore at risk .
  • Inventory maintenance becomes a time-consuming task. In a recent survey of commerce entrepreneurs, we found that 39% of smaller businesses (with turnover under $1 million annually) have inventory management frustrations and spend approximately 90 hours per month on inventory management.
  • The sophistication is absent. As business starts to scale and grow, incorporating different warehouse locations and suppliers with more orders and additional customers, growth becomes hampered due to the spreadsheets inability to manage this increased complexity.

3 inventory management system options#2 Cloud-based solutions

At the SMB level (with $100k - $1 million in turnover), the next step up from a spreadsheet is a Cloud-based inventory management solution. Without the need for labor-intensive spreadsheet creation and management, businesses can plug and play with a friendly interface designed specifically to manage workflows, monitor stock data, route orders via the closest warehouse to the customer, and automate your inventory management.

Additionally, Cloud based systems update instantly across all devices, so all stakeholders in the business get accurate, up-to-the-second data, minimizing errors and cutting out significant time spent on communications. This is particularly key to growth as you onboard new partners and service providers, meaning that you can still offer customers a seamless service even as you expand your operations.

Some disadvantages to a Cloud-based solution include:

  • Does incur a monthly or annual cost in comparison to the free spreadsheet option
  • Some set-up and user training time will be required to get started
  • Not designed to handle extremely large, complex supply chains

TradeGecko cloud-based for managing inventory in your eCommerce business#3 Enterprise Resource Planning

Enterprise Resource Planning (ERP) software is what’s typically used by large companies (with over $100 million in turnover) to manage all their finances, logistics, operations, and inventory in one place.  However, while there are plenty of advantages of ERP systems, they don’t guarantee success. There are some drawbacks as well:

  • ERPs are costly, and the consultants required to implement can cost approximately 60% of the value of the system
  • The workforce using the system must be trained in its use: while powerful, ERPs require skilled workers to make the most of them, as they are difficult to use
  • Staff turnover can result in lost knowledge and the need to constantly re-train new team members; meanwhile, any internal changes to business practices may not be synchronized within the system
  • The benefits of the ERP take some time to be realized within the business: the change isn’t instant, rather, the benefits are reaped over time

Different types of inventory management systems are great at different stages of your business growth. For a bootstrapping startup, a free spreadsheet can be just what you need to get you off the ground.

But it can only carry you so far. Once you start adding a level of complexity to your business operations, a more sophisticated Cloud-based inventory management offering will be required, giving you a strong foundation to thrive and expand.

Solutions like TradeGecko, achieve the majority of what an ERP does, without the unnecessary complexity, intensive training, institutional knowledge or high cost associated with them.

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