Common eCommerce Inventory Management Issues and Some of the Effective Solutions to Overcome Them

Whether you sell on Amazon or other eCommerce sites, inventory remains one of the most valuable assets of your business. A lack of or insufficient stock can have detrimental effects on your online business. Hence, business owners and online sellers must be mindful of proper inventory management.

This article will cover vital inventory management insights and some of the most common eCommerce inventory management challenges you may encounter when running an online business. 

What is eCommerce Inventory Management?

eCommerce inventory management refers to the act of tracking or measuring the amount, location, pricing, and mix of inventory products available from your online business. Practicing inventory management for eCommerce allows business owners to determine what products are in stock, overstocked, and already out of stock. 

Through proper eCommerce inventory management, you can make appropriate adjustments and initiate more informed decisions. Furthermore, such an undertaking likewise guides you in creating effective inventory management strategies beneficial to your online business.   

Why You Should Have a Reliable eCommerce Inventory Management  

Inventory management for eCommerce plays a crucial role in the success of your online business. Without proper eCommerce inventory management, your overall business performance may suffer losses. Some of the detrimental effects of poor inventory management may include but are not limited to the following:

  • Higher Holding Costs
  • Cash Flow Uncertainty
  • Poor eCommerce User Experience
  • Inventory Understocking or Overstocking
  • Missed Sales Opportunities
  • Difficulty in Performing  Inventory Tracking
  • Losing Customers in the Process

In contrast to the effect of poor eCommerce inventory management, having reliable and effective inventory management for your eCommerce business may result in: 

  • Improved Sales
  • More Time and Money Saved
  • Better Inventory Forecasting
  • Increased Customer Satisfaction
  • Efficient Inventory Planning and Ordering
  • Improved Customer Engagement and Retention
  • Better Warehouse Organization and Productivity

Common Inventory Management Problems and Effective Ways to Overcome Them




Inefficient supply chain and inventory management for eCommerce businesses cause retailers worldwide to lose more than $1.8 trillion annually. Whether you are running an Amazon business or other eCommerce businesses, challenges in inventory management will always be present. 

To give you an idea of the common issues sellers face concerning inventory management, here are some of the most common inventory problems you should be aware of.  

Inventory Stockouts

Stockouts or out-of-stock refers to the unavailability of specific products that a customer is ready to buy. It is considered a primary concern for online retailers, for stockouts directly affect business revenue. 

For a concrete example of the detrimental effect of stockouts, it is estimated that the U.S. retail food industry is losing sales between  $15 to $20 billion per year.

Furthermore, losing revenue is just one of the damaging effects when your store runs out of stock. Stockouts can also be detrimental to your brand and customer loyalty. 

Suggested Solution:

Prevention is always the best course of action when it comes to resolving stockouts. It will help if you have accurate inventory forecasting to avoid out-of-stock instances. 

In advance, Online sellers or retailers must determine product demands to prevent stockouts. To mitigate the inaccuracy of inventory forecasts, you can use modern and AI-powered retail forecasting tools. 

Inventory Overstocking 

Overstocking refers to purchasing voluminous products beyond what a seller can actually sell. It is when a retailer over-orders inventory items leaving them with too much stock or excess stock left sitting in their store or storage facilities. 

It is also a common eCommerce inventory management issue faced by online sellers. Sellers tend to forget that keeping too many inventory items is as detrimental as having too few. 

Suggested Solution:

Similar to stockout, inventory overstocking can also harm your business. You can improve your eCommerce management inventory by stocking products based on their sales value. Try to avoid buying inventory items in bulk, especially for novel items that are yet to be tested in the market. 

Warehouse Inefficiency

In relation to inventory management for eCommerce, warehouse inefficiency is one of the common issues sellers encounter. Inefficient warehouse practices can lead to safety concerns, increased warehousing costs, product damages, and even business operation delays. 

Suggested Solution:

You must introduce changes in handling your inventory and warehouse operation to improve warehouse efficiency. In particular, you can improve inventory management and other processes by optimizing your warehouse footprint

Furthermore, you can also adopt enabling technology, including a warehouse management system. It can help enhance the efficiency of your operation, including picking, packing, and shipping of orders.     

Loss of Inventory 

Inventory loss caused by damage, spoilage, or theft is another major concern of business owners that requires immediate action. Needless to say, regardless of the cause of inventory loss, its effect will always be unfavorable for your eCommerce business

Suggested Solution:

The best way you can resolve eCommerce inventory management issues such as inventory loss is to optimize your workflow, improve storage protection, and invest in critical facility improvements. These actionable ways can help lessen, if not obliterate, inventory damage. 

Inventory Data Inaccuracy

Reliable inventory management for eCommerce businesses is critical to avoid data inaccuracy. Any inaccuracy with your inventory data can cause other issues in your business operation, including overstocking, understocking, shipment delays, and revenue loss. 

Suggested Solution:

In order to resolve data inaccuracy, you should frequently conduct stock auditing for your business. A stock audit may include cycle counting of different stock categories in small, manageable batches or annual physical inventory count.

Pricing Issues

If you are anticipating a large inventory item from your supplier, ensure you are well-prepared to price your items. As part of inventory management, inventory pricing ensures that material handling and order fulfillment are successful and cost-effective in the long run.

Pricing your items too low or too high will affect your revenue and lead to a negative brand perception among consumers. 

Suggested Solution:

You can use pricing tools to ensure that the products you sell are competitively priced and that all expenses are accounted for in your pricing strategy. To further enhance your pricing strategy, you can also use automated repricing software to adjust your products’ listing price depending on the market situation and competitors’ behavior. 

If you are selling on Amazon, you can utilize an AI repricer to help automatically set your listing price to a competitive level. Thus, giving you a more competitive edge over other competitors. 

eCommerce Inventory Management Tools

Improving your eCommerce inventory management brings multiple benefits to your business. In order to facilitate such an enhancement, you will need to utilize inventory management tools and software.  

With the help of inventory management tools, you can streamline your warehousing operation and get a hold of crucial information that can help you make smarter operational and financial decisions. When considering inventory management software for your business, you should check for the following features:

  • Inventory Tracking
  • Order Management
  • Shipping Management
  • Reporting
  • Forecasting
  • Product Identification
  • Purchase Order Management
  • Supplier management

Getting Your Inventory Management Right on the Get-Go

Getting your inventory management strategy right from the very beginning can help you obtain a competitive advantage while increasing the success rate of the business. You should understand that fixing mistakes associated with inventory management is far more costly than preventing such errors from happening. 

A better understanding of the common eCommerce inventory management issues can help you prevent these problems from occurring in your business or resolve them if they are already happening. Applying the suggested solutions and incorporating the proper inventory management tools can mitigate the adverse effect of the aforementioned inventory management issues.

Start repricing today with
The Game Theory Amazon Repricer

Book a demo