6 Inventory Management Practices to Scale E-commerce Growth

6 Inventory Management Practices to Scale E-commerce Growth - Kyndle

Let’s start with a core concept of a business: inventory management.

Even if your retail business is an SME, as an entrepreneur you must always have a good handle on your inventory. Having managed more than 20,000 skus and more than a million orders over the years, trust me, inventory management is no small task, and must be regarded with a good sense of responsibility as this branches out into:

  • Product consistency
  • Logistics efficiency
  • Online and offline symmetry
  • Customer satisfaction
  • Better profit

If you’re having trouble managing your inventory and are looking to capitalize more on your assets, then this article is for you!

1. Look at your Best-selling, Medium Priority, and Minimal Priority Products

Take a good look at your sales. There will always be products that sell more than the others, and there are some that just “have to be there” but aren't your bread and butter. We call those the long-tail products.

Figure out the classification of these products and try to see if they’re your best-sellers, or if they’re medium priority, or low priority stock.

Best Selling

Of the three, this will be the easiest to understand. You as a business owner know what sells like pancakes to your customers. These products are of the highest priority and if possible, you would even be re-ordering these all the time.

Medium Priority

These are good as well. They’re not your best-sellers but they’re definitely ordered regularly and are still very important to your operation.

Low Priority

Typically, you would have a decent number of these, as they’re still looked for by customers from time to time. However, you won’t see them flying out of the shelves like your Best-sellers and your Medium products.

Still, you need to keep some around.

 We recommend not going through these by “feel”, and having the necessary data to back up your classification process.

Really diving down on the numbers and having good awareness of your storage and organising products will optimise your storage space and make fulfilling orders and overall operations more efficient!

2. Have a little more rather than fall short

Don’t be afraid to over-purchase a little. Obviously, it’s considered a favorable miscalculation that tends to avoid issues like

  • Not maximizing profits
  • Dissatisfied customers
  • Lost opportunities with new customers
  • Giving competition an opportunity
  • Stockouts
  • Dawdled operations 

It’s not “over-spending” if it is in the spirit of “Safety Stock”. Basically, it’s a bit more inventory in your warehouse to make sure you can tend to a little more demand.

3. Sweep and Reduce Your Stock Inventory

We know how counterintuitive this sounds right after #2, but this time we want to consider the concept of opportunity cost. 

If you have obsolete inventory, is it really worth waiting for a once-in-a-blue-moon customer that would look for it, rather than using that space for a best-seller product?

Did you know that an average retailer loses 3.2 percent of revenue due to overstocking?  

Despite the anxiety of not having enough stock for customers, you should also be wary of over-stocking. Having too much inventory is also not a desirable scenario for most eCommerce businesses.

With too much inventory, you’ll always be at the risk of not selling enough.

4. Regard Quality Control

Paying attention to quality control ensures both customer satisfaction and business success.

Pay attention to:

  • Leaks
  • Tears
  • Broken seals
  • Physical product sizes
  • Package durability
  • Warehouse light
  • Warehouse humidity
  • Warehouse temperature

If there is a firm grip of standards in quality control and employees are all synergised together working on the same goal, then businesses would soon realise better profits.

5. Optimise Your Pick and Pack Process

In a warehouse, pick and pack fulfilment is the process that occurs after an order is placed from an online store. Warehouse picking is using a pick list to find the proper quantities of each product from its respective location in the warehouse.

Packing is the placing of the items into the proper box, along with the appropriate packing materials and documentation before the package is labelled and shipped to the end customer.

Here are 4 ways to optimize the pick and pack process for effective inventory management:

  1. Design your warehouse for efficiency by placing your top-selling items nearest the packing station
  2. Keep your warehouse well-organized by cleaning every area and removing clutter
  3. Get a fulfillment partner for your warehousing management system
  4. Leverage a barcode system or RFIDs for better item count

6. Use the Reorder Point Formula

The reorder point formula is an inventory management technique that’s based on a business’s own purchase and sales cycles that varies on a per-product basis. A reorder point is usually higher than a safety stock number to factor in lead time.


To some, inventory management is even their biggest liability. Imagine issues like product depreciation, shrinkage, over-purchasing, and understocking.

Stakeholders and consumers want it fast and right. By implementing effective inventory management solutions, businesses can have a better insight on their internal operations and open doors for opportunities to scale bigger in a more fast-paced and demanding digital environment.