The Importance and Tools of The Right Inventory Management Software

June 10, 2016 in Distance Sales, Ecommerce, European VAT, Fulfilment By Amazon, International VAT, VAT, VAT and Fulfilment


WELCOME TO BUSINESS BASICS —The cyclical and never ending nightmare that is inventory management.



Inventory management is one of those aspects of an e-commerce business that is responsible for more consumption of ibuprofen than any other business necessity in the world today. When one of my clients says to me; “I’d like you to take a look at my inventory system and help us come up with an alternative plan.” What they’re really saying is; “Our inventory is completely out of control and we’re hemorrhaging money like a femoral bleeder. Make this good or we die now.” At which point I consider the options of taking on the project compared to taking up heavy drinking or a new career in bullfighting.

Still, it doesn’t have to be all that bad. A new inventory system can be as simple as signing up for a new service that integrates with your existing system and with a few minor tweaks, some data interpretation here and there, you can get through it without being gored by a bull.

Consider then:

The Basics of how your inventory works


  • Purchase Orders – Your essential first-step communication between your business and the vendor that you purchase your products or materials from directly. Whether your e-commerce business carries ten products or ten thousand, a purchase order generation and tracking system is essential to making sure you are not only receiving the products that you need but that your accounts payable remains up to date and easily audited for inconsistencies.


  • Reorder management – Tying directly into your PO system, reorder management helps keep you from those “oopsie” moments when your stock runs out and you neglected to consider that two-week lead time your vendor needs to fulfill your orders. Be it automatic PO generators or just pop-up or email reminders that it’s time to reorder product X, can make all the difference in keeping those products moving into stock.


  • Warehouse tracking and management – While your garage served to be an essential location for warehousing your products–despite your spouse complaining about having nowhere to park the car–now that you have moved said inventory into a “facility” that is not connected to your kitchen, keeping track of where everything is down to the square foot as well as which aisle, what row and what shelf is the key tool to not wasting your pickers and packers time in finding “missing” product inventory.


  • Supply Chain tracking – Isn’t it nice to NOT have your entire purchasing department tied up with the menial tasks of tracking what was ordered when, who currently has it, confirmation of delivery dates to set up joint distribution to multiple warehouse locations, all while controlling costs related to shipping product movement and receiving? Remember…every time a single product moves from one place to another–even in your own warehouse–it’s costing you money.


Getting your act together


  • Drop Ship capability – Do you sell tanks? Luxury yachts? Lead shot? Wrecking balls? What purpose is served by bringing tonnage worth of products into your facilities, just to have them turned around and reshipped to your customer? Have it sent directly instead and cut out the middle-shipping. This does not only go for massive or heavy items, but do keep in mind that it works best when the supplier is not willing to sell direct to the end-customer.


  • POS System & Barcoding – Gone are the days of clipboards, paper manifests and price tags to convey information about products, shipping, pricing, warehousing and sales. Barcoding and QR codes (sort of a two-dimensional barcode matrix of black and white squares, lines and dots) remove the necessity of a human searching for the proper information as well as interpreting that information to make a decision about the next step in the product disposition.


  • Supplier and procurement tracking – While at first this may seem similar to “supply chain tracking” as indicated above, in actuality it refers more along the lines of researching and constantly updating the information regarding your vendors, product availability from said vendor, pricing, practices, lines of credit and possibly most importantly–back-up vendors for the same or similar products if something unfortunate and unforeseen occurs with a particular vendor.  


  • Mobile device and APP integration – Kicking and screaming we accept the fact that people want to do everything from their smartphones and we must follow suit in order to be competitive and provide the kind of long-term customer service necessary to gain repeat business. In no way does this only have to tie into our e-commerce sales systems. While shopping via our smartphones is now commonplace–all the tracking, reporting, systems and management access could and should be tied into our inter-business apps that allow access to the information we need directly from our phones, tablets, laptops and desktops.


  • Integration with Accounting software – It should be obvious by this point that any systems in place should be directly tied into or accessible through our accounting systems. From Quickbooks to a multi-million dollar custom accounting suite, if it’s not tied in, the chances for human error increases exponentially while cross-channeling the information.



Reports have become the mainstay of business for keeping an eye on functions, movement, financials, procurement, trends, online statistics, blah, blah, blah. Where would we be without it? In some cases–we would be sane. Utilize your reporting carefully and sparingly. There is such a thing as too much information to interpret–sometimes  resulting in conflicting information and decisions.

  • Alerts – Everything is tied into an alarm, a pop up, a push notification, an email or text warning. Everything. Sometimes my phone seems like a circus with every act going on at once. Some are important. Some not so much. Set your alerts carefully so that they don’t become ignorable (yes, that’s a word now), but not so many that they are overwhelming.


  • Sales trends reporting – While it’s great to have access to 6,732 different kinds of reports that can be generated yearly, quarterly, monthly, weekly, hourly and on request, be careful of what you wish for because you might get it. If your eyes are glazing over from all the information spewing at you, there’s a reason for that. Break up your reporting amongst the people that need it and let them filter the necessary information to you in your native tongue.


  • Assets and audits – If bad information comes across your desk (or laptop, tablet or phone) then prove it. If good information comes across those same devices, then prove it. Interpretation of reporting, alerts and trends are all very subjective. Make no decisions without quantifiable hard facts and not spinable guesswork. Having the right tools in place to audit the information are your best assets. Use them to audit the results to prove them.


  • Analytics – It’s all analytics. Usually geared mostly toward the e-commerce side of things in how the website it doing, your analytics should be interpreted by experienced users and departments or presented by the right software in a simple, direct and easily interpreted manner.


If your business model is the motor of your ecommerce business then your inventory is the fuel. Keep the engine going with the correct tools to not only ensure that you stay fueled up, but that the system is running smoothly and managed carefully. Inventory systems do not have to be as complicated as the technobabble used to describe them.


“This guest post was contributed by the Skubana team. Skubana is an all-in-one ERP system that provides multi-channel inventory system and state-of-the-art profitability.  Not only does it seamlessly integrates with most e-commerce marketplaces, 3PLs and warehouses but it also compiles your sales velocity and automatically generates purchase orders and other reports for your approval so you don’t ever oversell.  Try Skubana free for 14 days, or feel free to contact us at with any questions!”




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