Ecommerce Inventory Management – Top 10 Tools, Choose One Best For You

How sustainable and profitable your business will be in the future will largely depend on how you manage your inventory. Due to poor inventory management, a business can lose up to 11% of its annual revenues. That’s huge. Apart from biting into your revenue, you can also lose your customers. How? 69% of customers leave their sale and move to your competitor if they find out the item they are looking for is out of stock. An ecommerce business is highly dependent on proper inventory management. In the retail sector alone, stockouts can cause $1 trillion in lost and missed sales.

To sustain your e-commerce business, you need more than Excel sheets and manual inventory tracking. This guide will discuss how you can choose a better ecommerce inventory management system that ensures your business thrives without stockouts and without tying up your capital in overstocking. 

What is ecommece inventory mangement?

E-commerce inventory management means managing your product and maintaining inventory levels across all sales channels.

Why do ecommerce businesses need inventory management more than any other business?

In traditional retail, your inventory is quite in your control, while in e-commerce, inventory moves much faster. If you fail to meet the speed of sales and manage the inventory level across all sales platforms, you can also shut down your smoothly running business.

In e-commerce, you sell your products across multiple platforms. Therefore, you have to maintain a satisfactory inventory level based on data to prevent stockouts, which can cause up to 30% lost sales, and overstocking, which can result in your items sitting in a warehouse.

Therefore, for an e-commerce business, ecommerce inventory management is more than just a tool; but a need. It can maintain faster order fulfillment, better cash flow, and scalability for seasonal spikes (e.g., holiday rushes). 

Top e-commerce mistakes businesses make that cause them sales 

Mistake 1: Not syncing online/online & online/offline stock – Overselling

Imagine you are a customer and you purchased a water bottle, and it’s been 10 days, and you haven’t received your order. How would you feel? Frustrated, right? And will you ever go buy something from that vendor again? Not me.

Most of the time, e-commerce inventory is mismanaged due to a loss of sight when done manually, and you may sell the same product on Shopify and Amazon or in your brick-and-mortar store but forget to sync inventory. In this case, you have lost one of your two customers. Now you have to manage refunds and are ready to get a sizzling review.  

Solution

To prevent such a dangerous scenario, invest in a good e-commerce inventory management system that has centralized order management, gives real-time stock levels, tracks inventory, and manages fulfillments without an error.

Mistake 2: Ignoring demand forecasting

Without a system to tell which product is in demand and how many items are available in stock, you can face stockouts during seasonal spikes and viral trends. 73% of retailers agreed that using forecasting tools helps them manage their inventories more efficiently (Preventing stockouts and overstocking).

Solution

Keep track of your product demand. If you don’t have a good system in place, it might look like this: You sold 200 items last week, and you think you’ll need another 200. But don’t forget, next week is Black Friday! You could end up with a lot more orders than usual. The same goes for overstocking products just because you think you might get more orders. The best way to avoid these issues is by looking at your past data and managing your demand forecasting based on that. 

Mistake 3: Failure to manage inventory level that causes dead stock – Overstocking

If you are an e-commerce business that manages inventories based on gut feeling and personal liking, get ready to see dead stocks. (Inventory that sits untouched for months eats up storage space and cash flow.) Overstocking is one of the deadly ways to burn your cash. When you overpurchase products based on peak season, have no system to see which product is getting more traction than others, and have no concept of reorder points and safety stock levels, your business will face overstocking or stockouts.

Solution

With an e-commerce inventory management system, you can set reorder points and manage safety stock levels. This means you get notified before a particular product goes out of stock and can restock within the lead time without missing sales. It’s stated that businesses that use inventory management systems face 30% fewer stockouts than those with no defined system. 

Mistake 4: Forgetting returns management (how returned items affect tank accuracy)

Without a proper system, returns and restocking can disrupt your counts. You have just put 20 items in stock, and 2 days later, 5 of them get returned. Now, without a system, your count is prone to errors. You can’t manage stock levels, and thus, you have products in warehouses not assigned to any category (in-stock, returned, replaced, or canceled).

Solution: 

The solution is simple: Invest in proper inventory management rather than relying on manual tracking, spreadsheets, ledgers, and log books. 

Mistake 5: Overcomplicating SKU systems 

If you are a creative person who loves to play around with names and tags, then this one is for you. DON’T. 

While doing manual inventory management, keep SKUs simple and straightforward. If you try to be creative, you will not be able to identify which product belongs to which SKU in the long run.

Solution:

If your SKU system is too complicated and you find it hard to manage products, then you might need a system where you don’t have to worry about assigning your creative SKUs to products and forgetting them when needed. In inventory management software, you can assign SKUs and easily track products based on that. 

What features to look for in your ecommerce inventory management software

There is a lot of inventory management software on the market right now. But can you choose and use any that is cheap and looks appealing? No. Not every inventory management software is built for eCommerce. You have to look for features that you need based on your business model. You have to choose a tool that allows you to manage sales across multiple sale channels and gives you real-time tracking. 

Look for:

Real-time tracking: 

For e-commerce, real-time tracking is the primary way to keep your stock levels safe and your order fulfillment in line. When your numbers are always accurate, you don’t have to worry about where the sale happens. Is it your eBay store, Shopify, or offline? With synced inventory, you can check in real time how many items are in stock and exactly when to hit the supplier again.

Low stock alerts: 

In most inventory management software, you can easily set reorder points. When an item reaches a certain number, for example, 20 remaining in stock, you get notified before you run out and can reorder easily. You can do this for multiple suppliers as well. You can even set different reorder points for different items.

Multichannel sync: 

Look for inventory management software like Zoho, which allows you to easily sync inventory across multiple sale platforms like Amazon, Shopify, eBay, and WooCommerce.

Automated purchase orders: 

With e-commerce inventory management software, you can easily set reorder points so your system orders for you when you are notified about a threshold that you set. You can reorder manually or have the software do it. Software like Seebiz Inventory allows you to automate these reorder points even with multiple suppliers.

Analytics and reports: 

With an inventory system, you can evaluate your data and make decisions based on facts. Suppose you launched a new product four years ago. Now, when you check the data from the previous year, you find out that this product is just eating into your margins and the major stock is sitting in inventory. This allows you to decide whether you want to put that product on sale or remove it completely. In e-commerce, trends shift, and you can’t rely on products that were the talk of the town a few years back. Yes, you can launch them again if they come back into view, but without data, you can’t identify them and might be paying for inventory that is no longer needed.

Top 10 eCommerce Inventory Management Software in 2025

How to choose the right ecommerce inventory management tool without wasting $10k

Step 1: Audit your pain points. 

Do you struggle with returns or supplier delays? Or do you find it hard to manage stocks across multiple platforms? Write down your pain points and then, based on that, choose the tool that fulfills all your needs without breaking the bank. 

Step 2: Match your budget to solutions:

Based on your business needs and the allocated budget, you can choose which tool is best for you. If you are a small business and have a specific budget allocated, suppose it is under $80/month for the inventory tool – choose a tool that matches your budget. 

SMBs: Under $100/mo: Seebiz/Zoho Inventory (basic multichannel).

Mid-tier: (200–500/mo): Cin7 Core (for scaling brands).

Enterprise: ($1k+/mo): Fishbowl or NetSuite (complex supply chains).

Step 3: Test drive free trials. 

Before signing up for any plan, first take a test drive. Also, check if there are any hidden charges for demos. Do your research and then sign up based on functionality. 

How you can manage your ecommerce inventory

Now that you know the tools that can help you manage your inventory properly, remember that a good product cannot save a bad process. Therefore, even with good tools, you still need smart processes. 

Here’s what works:

1. Audit regularly

Even the most accurate tool glitches sometimes. Therefore, to prevent even a 1% chance of error, don’t rely 100% on software. If your business involves moving a lot, it’s a good idea to keep a check on your inventory physically every quarter, physically. At times, your software might show accurate results and stock levels but can lose track while moving. 

2. Use ABC analysis

ABC analysis, also known as  Pareto classification, is a system in inventory management in which inventory is categorized into 3 groups based on priority and importance. 

Source

A = high value, low quantity
B = moderate value and quantity

C = low value, high quantity

The purpose of this classification is rooted in the concept of 80/20, which states that 80% of sales come from 20% of products. To better understand this, let’s use this example: You are an online store that sells ladies’ bags. 

You handle your own manufacturing and start with your signature product, which sells like freshly baked cookies. Now, you plan to expand your product line. However, your signature product remains at the top due to its massive audience and brings recognition to your business. While your primary focus is still on the signature item, you have also added other products for diversity. In this way, 80% of your sales come from your signature items, while the other products account for the remaining 20%. By dividing their inventory into three groups, businesses can set priorities and monitor each item more closely.

3. Automate reordering

By setting and automating reorder points, the system sends purchase orders automatically when the threshold is reached. This reduces missed restocks and saves time.

4. Forecast with data

As discussed earlier, don’t plan your inventory based on gut feeling and short trends but on historical trends, market demand, and seasonal behavior. Some of the inventory tools now use AI to help you forecast more accurately.

5. Managing returns

Returns are also a part of e-commerce. Seventy-eight percent of e-commerce companies are prepared to begin their inventory management journey in 2025 because it can save them a lot in terms of stocks, cash, and revenue. Using a tool saves you a lot of manual labor and reduces errors, allowing you to auto-update stock levels and trigger alerts when items are restocked. You can manage returns and add them back to stock without delays, getting real-time stock levels. 

Conclusion

Businesses might think they don’t need to invest in costly inventory management tools. But for any business with multiple products and multiple sale channels, stock management should be the first priority. This is because fulfillment costs, like simple warehouse management, make up almost 20% of overall inventory costs. If you compromise on this, you are essentially compromising smooth sales and customer satisfaction, which are the backbone of your business. Without calculated stock levels, you can face stockouts that can cause a 40% loss in sales. Thus, a 20% investment in an inventory tool can save you 40% of your sales. Sounds good? Choose your ecommerce inventory management software today and save $$ that you can invest to grow your business. 

Why SeeBiz?

Seebiz inventory management software allows multi-location tracking, reorder alerts, last-sold price history, dropshipping support, and automated invoicing. Therefore, if you are an e-commerce store looking to manage everything on a single platform, Seebiz inventory management could be the right choice for you. But again, choose software based on your business needs and budget. 

FAQs

Q: What is eCommece inventory management?

E-commerce inventory management means managing your product and maintaining inventory levels across all sales channels.

Q: How do I manage inventory across Shopify, Amazon, and Etsy?
A: Use tools like Trunk or Zoho Inventory. They auto-sync stock across platforms. That way, if something sells on Amazon, it’s deducted from Shopify in real time.

Q: What’s the best way to handle inventory when drop-shipping and holding stock simultaneously?
A: Use an inventory system that supports hybrid models. Make sure you can split SKUs between warehouses and suppliers.

Q: How can I avoid dead stock?
A: Track sell-through rates, use discounts to move slow sellers, and forecast based on real-time demand, not guesswork.

Q: Can I manage inventory without expensive software?

Yes, but only if you’re a solo seller. You can use spreadsheet templates along with manual tracking. However, remember that this method works well only when you deal with a limited number of SKUs. If you have a large inventory, then consider starting with software that offers free trials and a basic plan for under $50 per month to prevent inventory mismanagement. 

Q: How can I manage my inventory for both Amazon FBA and my warehouse? 

A: You can use tools that work directly with FBA, like Sellercloud, to help you manage everything more easily. 

Q: What’s the biggest mistake new sellers make? 

Underestimating return rates. On average, in the fashion industry alone, return rates fall between 20% and 30%. If not managed properly, this can disrupt your wholesale cycle and cash flow, ultimately impacting your revenue in the long run.