Inventory management is all about making sure you have what you need when you need it. It’s as much an art form as it is a science, part accounting, part data analysis, and part clairvoyance.

The task has been made even more difficult by the supply chain disruptions and inflation of the past couple of years. Despite these challenges, you probably have a good handle on your inventory needs in your physical store. But inventory management in the retail ecommerce realm presents its own challenges. In this article, we’ll discuss some of the problems retailers face when they try to move physical inventory management techniques into the digital realm.

Treating Your eCommerce Site Like a Single Store

It goes without saying, but running a website isn’t the same as running a store. Traffic can fluctuate wildly from one day to the next, you’ve got visitors coming in from all over the world, and the methods by which they discover your shop and browse your products and services are completely different. You might see a spike in sales if a particular product goes viral, And while sales might be small enough at the beginning to manage as though you were running a single store, this approach makes it difficult to scale your business.

While you can keep your own inventory in your store or at a central location, you don’t have to keep physical inventory when selling online. With dropshipping, rather than keep inventory on hand to fulfill orders, retailers can purchase inventory through a supplier as orders come in. You won’t have to worry about overstocking or overselling, but the tradeoff is that you won’t be in control of your own inventory and you’ll be at the mercy of the dropshipping company to fulfill orders on time. The best use of dropshipping for an established retailer might be to test the viability of a new product before ordering your own stock of it.

Manually Managing Inventory

It might be easy to track the relatively small physical inventory of a single brick-and-mortar store on a spreadsheet by manually entering data and formulas, but it can become unmanageable when doing a high volume of sales on a large number of products online. The difficulty will only compound when you begin tracking inventory across multiple sales channels (such as Amazon or Etsy) and multiple warehouses. Even if you’re having no trouble keeping track of everything, you could still save yourself time by automating the process. Your ecommerce platform probably has software included that can handle this for you. And if you begin when sales volume is still small, it becomes that much easier to manage as you grow.

Automating inventory tracking will benefit your in-store inventory management, as well, since your software will integrate your ecommerce order management system with your in-store POS and your shipping and tracking systems.

Missing Out on Key Data

Consumer purchasing trends might be different online than in your physical store. Take advantage of the data available in Google Trends and Google Analytics to get an idea of when the products you sell are most popular. You can also find data on what keywords consumers are using to find products like yours and refine your product descriptions in response.

The demographics of your online shoppers may be different as well, and what’s selling in-store vs. what’s selling online might differ based on those factors.

Managing ecommerce inventory requires a different approach, one based on automation and data analysis. This may seem like more work for you, but the extra work comes at the beginning and will ultimately make everything easier. Software integrations can save you time and money by automating inventory tracking and restocking as well as seasonal trends for both your brick-and-mortar and ecommerce inventory.