Inventory Management Challenges for Online Stores

white clothes hung in a store

Managing inventory effectively can be challenging, especially for eCommerce retailers with an omnichannel strategy. eCommerce businesses come across various inventory management challenges every day. In order to maintain sustainable growth, they have to find an out-of-the-box solution to streamline the process.  

In this blog, we’ll outline the five toughest challenges faced by e-commerce entrepreneurs and how to deal with them effectively. 

Inventory management challenges faced by online stores

1. Unqualified staff

The most common mistake businesses make when it comes to inventory management is to hire unqualified staff to carry out the tasks. Underskilled staff is incapable of evaluating suppliers, preparing the proper documentation, making correct forecasts, purchasing new inventory, or handling inventory. As a result, your inventory management system becomes reactive rather than proactive. This might lead to unreliable system information, high levels of expired inventory, build-up of obsolete inventory, and over or understated inventory valuation. Inventory management issues will arise because of incompetent staff, and it will be destructive for your business. 

2. No KPIs or too many KPIs

KPI stands for Key Performance Indicator. An inventory management KPI is a metric that a company uses to analyze its stock management efficiency. Using too many KPIs may confuse your staff about the most important aspects to focus on. Meanwhile, no KPIs will cause stockouts or result in excess stocks. Either case would adversely impact a business. 

There are many performance KPIs that a company can use to optimize inventory. Still, it is vital to choose the right metrics for your business for inventory management issues that can decrease the efficiencies and dig into your profits.

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3. Manual management process

Another challenge faced by e-commerce companies is a manual management. It is possible to track and manage stocks manually in the early stages of an e-commerce business. But as the business scales, managing inventory manually becomes more and more complex. As the company grows, paperwork and other manual processes turn out to be tedious and burdensome. Automating the inventory management process not only helps you save time but also limits errors caused by fatigue.

4. Deadstock

When it comes to inventory management challenges, deadstock refers to a product that has not been sold and keeps lying on the shelves for a longer duration than anticipated, and the chances of it getting sold are very weak. In the absence of good inventory management, businesses often end up stocking excess inventory. Deadstock might be the result of poor forecasting, lack of demand, over-ordering, etc. If not tackled properly, it would lead to huge losses to a business.

5. Irregular stock tracking

To maintain an accurate picture of the stock, it is important to count your stock regularly. It helps you to figure out any discrepancies between the book and actual inventory. There are times when un-trackable stock such as exchanges or pilferage are not entered into the system. This type of error would cost you tremendous time and effort to fix. Therefore, a frequent stock audit is highly necessary to ensure sufficient inventory. 

Back up your store with BackOrder

BackOrder allows users to assign any product to a backorder status when the inventory level reaches a certain threshold. This means customers can still place an order for out-of-stock items and have them delivered later. In addition, you can set up the system to notify your staff whenever a new request is submitted, preventing you from missing out on any potential customers. 

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Backorder inventory management demo

What’s more, BackOrder can now be integrated into Atom8. This creates a centralized management system without you going back and forth between different platforms. 


Effectively overcoming inventory management challenges by automating processes will help you forecast demand, manage stock replenishment, and plan production and distribution to serve customers better.



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