Inventory management is part of every business that creates and sells products. Ecommerce businesses operating online are no different.

What is inventory management?

Inventory management is part of the supply chain management process. It is the supervision and maintenance of all materials required to build and package ecommerce products to sell. Inventory management covers the entire lifespan of an item and its parts.

For example, if an ecommerce business owner makes and sells scarves, inventory management tracks the arrival of the yarn, knitting needles and packaging materials from manufacturers. It then records where each individual stock item is stored in the ecommerce business's warehouse or storage facility. It monitors units available for use, units used and units needed as scarves are knitted and sent to buyers.

"Inventory management covers the entire lifespan of an item and its parts."

Inventory management also tracks which stock items are pulled most frequently for use. If consumers continue purchasing purple scarves, more purple yarn will be pulled than any other color, requiring ecommerce owners to increase the amount of purple yarn ordered.

Just-in-time inventory management refers to a method in which materials are received by the ecommerce business owner as they are needed.

Materials requirement planning is a version of inventory management that uses sales forecasts to predict how many units of each stock item will be needed in the future, allowing ecommerce owners to schedule orders in advance as necessary.

How to accurately track and manage inventory

Inventory management requires several components with which every ecommerce store owner must be familiar:

Identify stock items

From manufacturing to point of sale, identify all materials and parts necessary to generate products consistently. Calculate how many items are needed to create and ship one single product.

Minimum stock level

The minimum stock level is the smallest amount an ecommerce store has on hand of any one stock item. As soon as inventory reaches this level, it is time to reorder.

Define units of measure

An efficient inventory management system has consistent units of measure that all personnel can recognize, understand and use. It saves time and produces more accurate inventory management if an ecommerce owner knows there are 100 knitting needles in one box. Rather than counting each needle, he or she only needs to count one box.

Calculate lead time

Lead time is the amount of time it takes a supplier to deliver ordered inventory items. Knowing how long it takes has a large impact on timing reorders.

Understand product turnaround

Turnaround refers to the time it takes stock items coming in to become finished products and reach the point of sale. Understanding this unit of measurement for each product available on an ecommerce site increases store owners' ability to order the correct inventory as needed over time. In addition, if the ecommerce store sells perishable items, a first-in, first-out system can be used.

Generate a purchasing plan

Inventory management relies heavily on an ecommerce store's purchasing plan. A purchasing plan is the set of guidelines a business follows when it orders and reorders stock items necessary to create its products. This plan should coincide with a budget that the ecommerce business can support over an extended period of time.


Bigcommerce is the leading ecommerce platform for growing and mid-market retailers.

Learn more:
1. Visit our commerce blog
2. See our best-in-class features
3. Request a demo


Try Bigcommerce free for 15 days and see what plan is right for you
Start free trial
High-volume or established business? Call for a demo. 1-866-581-4549

Start your free trialHigh-volume or established business? Call for a demo.1-866-581-4549