How SMEs Can Effectively Manage eCommerce Inventory In 2024 - Fleximize

How SMEs Can Effectively Manage eCommerce Inventory In 2024

Inventory management is key to preventing product waste, saving costs and time, and giving customers access to the products they want.

By Brian Fajar Mauladhika

In 2024, the competition in the eCommerce industry is fierce, and every penny counts. So, understanding how to effectively manage inventory is crucial for small and medium-sized enterprises (SMEs) to prevent product waste, save costs and time, and give customers access to the products they want.

eCommerce inventory management is more than just keeping track of your stock so you don't sell out; it's about effectively managing all the procedures and processes behind ordering, receiving, storing, tracking, and accounting for the products a business sells online.

This article explores the importance of inventory management and six best practices for SMEs to effectively manage their eCommerce inventory in 2024.

The Importance of Effective Inventory Management

Effective inventory management is essential for meeting customer demands and achieving long-term success. Here's why it’s is important:

6 Ways To Effectively Manage eCommerce Inventory In 2024

Track inventory data

Whether you store the stock yourself, use a fulfilment partner, or rely on dropshipping suppliers, keeping close tabs on inventory data is the key to effective inventory management. The inventory data you'll want to track includes:

SMEs that stock less than 100 items can create a spreadsheet on software like Google Sheets, for simple inventory tracking needs.

However, integrated inventory management systems such as Lightspeed or Clover are an excellent option for tracking inventory, supplier data, purchase orders, and stock receipts within one cost-effective system.

Use inventory forecasting

Forecasting is predicting how much inventory you'll need to meet upcoming demand. Demand is based on a range of factors, including:

However, the goal of forecasting is to have just enough inventory available to cover the predicted sales without overstocking. This is ideal for SMEs with less storage space.

Understanding sales velocity - a measurement that indicates how quickly you're selling your goods - and supplier lead times - the time it takes for your supplier to have goods ready for delivery - are both critical to effective inventory forecasting.

Working with reliable and timely suppliers allows you to stock fewer items and order more often, which helps with cash flow. Meanwhile, slower shipping suppliers or those used for seasonal purchases will require you to make fewer, larger purchases, which ties up more cash in inventory.

Luckily, many inventory management systems have built-in forecasting tools.

Utilise inventory management plugins

If you use WooCommerce for your online store, you will notice the built-in inventory management tools and features that help with basic inventory management.

However, as your SME grows and your online store expands, a specialised inventory management plugin may become essential for enhancing the platform's stock management functionality.

WooCommerce inventory management plugins such as Smart Manager, Stock Sync, and ATUM Inventory Management add advanced functionalities like bulk management, detailed reporting, and real-time stock updates.

A WooCommerce inventory management plugin can streamline your online store's operations by automating time-consuming tasks, reducing errors, and saving time.

Be clever with storage space

If you aren’t using a dropshipping supplier, it's essential to consider where you will physically store your inventory items.

SMEs often have limited storage space compared to larger eCommerce businesses. Here are some simple but effective storage space tips:

Understanding your storage space lets you set your minimum and maximum stock levels. The highest stock level you can maintain often depends on storage space limitations and whether you have room for overstocking.

Utilise RFID and Barcode Technology

Both Radio Frequency Identification (RFID) and barcode technologies accurately track products from the time they are scanned in at the warehouse until they are sold to a customer.

By utilising these technologies, SMEs can:

Set up low-stock alerts

Some website builders and retail operating systems (ROS), such as Strikingly and Brightpearl, offer low-stock alerts to eCommerce businesses. You set a minimum stock threshold and receive an automatic notification when your stock levels reach that threshold.

Low-stock alerts allow you to contact suppliers and top up your inventory before you run out of stock. This prevents potential lost sales and customer frustration when something they want isn't available to buy.


It's easy for eCommerce business owners to begin sourcing products and selling them without an inventory management plan. However, SMEs must know how to effectively manage their inventory to balance supply and demand and earn profits from day one.

Poor inventory management can result in a significant financial loss, a critical factor to SME failure. However, by implementing these six best practices, you'll be on the road to learning how to manage inventory effectively and improve overall operational efficiency.

The future of inventory management will be centred around technology, forecasting demand, and maximising warehouse efficiency.