How to Track Inventory in Small Ecommerce Business?

warehouse inventory management system WMS for small business

In the beginning, when the first orders from e-commerce store begin to arrive, people are often euphoric and optimistic, thinking that now it’s all downhill. However, It turns out very quickly, that there are a bit too many orders and the warehouse begins to haunt.

At this point, people most often look for solutions that will save us from a total mess and allow us to spend more time on sales and less time walking between the shelves. Some Inventory tracking solution is needed. I have seen this problem in many companies. Here are couple of conclusions I have come to.

For tracking inventory in a small eCommerce business you should implement WMS (Warehouse Management System) at the very beginning. WMS will allow you to track inventory, always have up-to-date stock data, speed up finding and collecting products, and save you a lot of expenses and stress.

With this short but precious information at hand, you will be able to develop your e-commerce business faster. Let’s dive into it a little bit more.

Do you have to Keep Track of Inventory?

I have heard statements from beginners in the E-commerce industry more than once that we “somehow manage”. The sale is booming, and new customers keep arriving and that is the most important thing.
I agree with it to some extent, but the same people panic after some time looking for solutions to have inventory and all product information at hand.

Probably a large part of the readers of this article may be at this point.

In the E-commerce industry, it has been accepted that from the very beginning you should implement at least the simplest warehouse management system. And when I say System, I mean even the simplest way to track inventory. Even on paper. This is better than not following them at all.

Do Small Businesses Need to Keep Track of Inventory?

Every major business started somehow. And everyone understands the problem that you may also face. Let’s break it down into parts and consider whether a small e-commerce business should track its inventory.

Problems you should consider:

Current product quantities in the database.

Having the current quantities of products, you are able to estimate the time after which you should order a new product. Nay. You are able to do it at the optimal time, not too late and not too early.

Too late ordering of goods from the supplier is associated with the dissatisfaction of customers who have to wait too long for customers, or with a complete break in sales and a drop in statistics, which in some way translates into your future sales.

Ordering too early shouldn’t be a problem. You finally have stock. However, with the rapid growth of a small company, it usually ends up clogging up valuable warehouse space and freezing funds that you could invest in new products or spend on marketing.

Being able to Analyze Statistics

How many products are waiting for sale too long? Which product is the best selling? Which goods have no barcodes and which are available in color variants?

The answers to these questions are at hand as long as you have an inventory management system in place.

You are able to quickly carry out a thorough quantitative analysis of products and draw conclusions needed for further planning of orders.

Expiry Date Tracking

If you run a business in the food industry or your merchandise just can’t lay down on racks indefinitely, you know what I’m talking about. After implementing the WMS, you will be able to react quickly and sell the products with the earliest expiration date and make a promotion on some with a close expiry date.

Location of Products

If your e-commerce grows, so does your warehouse. We slowly start running around the warehouse and looking for products on the shelves especially if you’ve just hired a new person.

In the warehouse tracking system, you can put information about the location of the goods on the shelves. When the product is sold, you will read its location on the shelf and immediately know where it is. This will save you a lot of time and allow you to use it to handle more orders.

Planning Orders in Advance

On the basis of information about products, you can plan in advance when it will be time to order goods from a wholesaler or a manufacturer.

You can accurately calculate how much time has passed since the last delivery and estimate how long it will take for the product to run out. It is helpful to set minimum quantity thresholds so the system can show you that it is time to order. More advanced programs will help you with this automatically.

Therefore, to answer the question in the header: Yes. Small businesses need to keep track of inventory, and how!

Keeping track of Inventory Manually

Manually tracking products in stock seem to be a daunting task. Of course, there is a way to do this when you have a few or a dozen products and each of them is in view and easily accessible.

Manual tracking of products will be practically the same problem. You will not be able to conduct quick analyzes, your store will in no way know how many products are in stock, and thus customers will be able to buy something that is currently not in stock. In addition, the constant update of the data on the sheet. There are better ways.

Start implementing another solution now, while you have time for it. As the number of orders increases, there will be less and less of it.

Is Excel Good for Tracking Inventory?

Short answer: It depends – as always in an ecommerce business. Long Answer: Keeping a inventory files in Microsoft Excel, Google Sheets, Numbers, or another program atleast gives some possibilities and collects product information in one place.

On the other hand, it runs the risk of the trap that you and your team will be drowning in tables, macros, and shared resources instead of dealing with sales and marketing. On a large scale, it becomes really inconvenient and ineffective.

Having certain product data in one file, we can do something with them and have much more knowledge than without such a file. Here are the most important data that should be included in the table.

  • Item Name
  • Serial Number
  • Cost Per Unit
  • Number of Units in Stock
  • Sale Price
  • Minimum Order Quantity
  • Order Time
  • Supplier

We can add data such as Row, and shelf space to this, which will help the employee quickly locate the product in the warehouse.

The preparation of such a file is a kind of automation. It may not be full yet, but it is a milestone toward a more mature business.

Small Business Inventory Template

For your convenience, below you will find free templates to download and implement immediately. You can also quickly and easily customize it for Your needs.

You can download the template here:

What is a Warehouse Management System (WMS)?

Once you deal with the tables and start looking for something more, WMS – Warehouse Management System solutions come to your attention.

The first thought that may pop up in your head is that someone came up with a system just to sell it to you and surely took it into some marketing gibberish to make you think that you need it.
The truth is quite different. All experienced E-commerce businesses use this type of solution.

WMS can be quite simple or quite extensive, giving you the ability to manage even the largest warehouse with an area of ​​30,000 ft2.

WMS programs give you the ability to track inventory levels that no excel will give you.

Extensive analytical panels will allow you to extract even the most advanced sales parameters. And since we are talking about sales, in such a program you can immediately accept orders, assign tasks to packing employees, and observe which orders are in the process of packing, which are still waiting on the shelf, and which have already left the customer.

Such systems offer a lot of possibilities, from integration with the accounting program to integration with carriers and suppliers. Hence, it is close to ERP (Enterprise Resources Planning) software, but more on that another time.

It can be said that there are two worlds in E-commerce. One before WMS and the second after the implementation of WMS. And believe me. I know what I am talking about from my own experience.
Without a doubt, if I were to start a new business related to online sales, I would start with installing a WMS program.

 Simple Inventory System for Small Business

A simple WMS must at least give you the option to:

  • Entering product data such as product codes, producer data, quantities, producer codes, delivery time, detailed data, and possibly expiry dates
  • Entering the place of storage of products. In what warehouse are they located, on which rack, etc.
  • Possibility of integration with suppliers
  • Possibility of integration with shipping companies
  • Conducting analysis of goods.

Free Small Business Inventory Management Software

In the beginning, it is worth testing the solutions that are available on the market. Right now, most software vendors offer free basic or free trial plans. This is to enable you to familiarize yourself with the warehouse management program and decide if it is for you.

To facilitate your search and save searching the internet. We have selected several free WMS programs available on the market for you. All of them will work well for small E-commerce businesses. We place them in order of popularity.

Here are the 3 most interesting ones:

This multitasking program is able to handle multiple sales channels,
In the free plan, we can handle up to 50 online orders per month, and we also have support for 1 warehouse and 2 users.

In the basic STANDARD 79 $ / month package, we can accept much more orders – 1500 per month, operate in 3 warehouses, and create 3 users.

Zoho will allow you to track the flow of goods in the warehouse. It copes quite well with tracking product expiry dates and has a mobile application, which is a huge advantage these days.

We can integrate it with platforms such as Shopify, Etsy, and Aftership. As for the Free Plan, it is a program worthy of attention.

In the Free Package, Sortly gives us the ability to manage 100 different products. We also have 1 user account and 1 custom field.

If so, the Help Center and Email Support can help us even in the free package.
The first paid ADVANCED package for $29/month gives us 2000 products, 3 user accounts, and 10 custom fields.

Inflow Inventory
We will not find a free package here. However, we can use the 14-day Free Trial and check the options of the paid packages.

The basic ENTREPRENEUR package includes support for 100 sales per month, and 2 integrations with platforms such as Amazon, Shopify, Woocommerce, Zapier, or Squarespace. Additionally, we have 2 user accounts and 1 warehouse location at our disposal.

Additionally, the manufacturer offers 2 hours of setup assistance and unlimited support.

If you are looking for the cheapest solution, test these 3 options and see if any of them fit your business.
However, if your business is beyond these free plans or you need to delve into the functionality of each of the programs available on the market, we recommend going to our list of the best WMS software for small businesses. We compare prices, functions, and possibilities of various solutions that are available on the market.

Here you will find an article: 26 Best inventory management software for small businesses.

Article Link

Bottom Line

If you want your E-commerce business to develop without any glitches or blockages, the right warehouse management software is crucial. WMS selected appropriately to your needs will improve your work and save you a lot of time and money.

You may also be interested in:
How to Set up a Warehouse Packing Station for E-Commerce?

Jakub Szulc

I am an active Ecommerce Manager and Consultant in several Online Stores. I have a solid background in Online Marketing, Sales Techniques, Brand Developing, and Product Managing. All this was tested and verified in my own business activities

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