Photo of inventory in a shopfront

8 simple e-commerce inventory tips

Have you ever gone to a nice restaurant on a Friday, wanting to enjoy a nice dinner after a long week’s work? You place your order only to be told that they’re all out? Well, that’s what bad inventory management looks like. 

Now imagine how your customers would feel in that situation. They place an order on your online store, only to receive an email from you saying ‘we’re all out of stock’.

Here are a few inventory management tips to ensure this doesn’t happen…

Turn it around

It’s key to know how long it’ll take you to fill an empty shelf. If you can’t fill an empty shelf before the stock runs out, be prepared to remove that online listing.

What’s the longest turnaround time of all the materials you use? Take that time and then add the time it takes you to make the product that material is used in. Now do this for all your products.

This is your lead time. Knowing each product’s lead time is the first step to good inventory management.

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Use a useful tool

To make sure you’re alerted when stock levels are low, you need to be using a tool. With SumUp’s Product Catalogue, you can stay on top of your stock, all from the SumUp App. 

Create products, manage their variants, categorise them and keep track of your inventory from your phone or tablet. 

Use an SKU system

Let’s say your most popular item is a ‘summer long sleeve blouse’. That’s the name of the product listed in your store.

When someone orders a small size in black, you now have to refer to it as ‘summer long sleeve blouse black small’. This can easily get confusing for yourself and anyone else dealing with your stock.

Instead, give codes to different stock variants to make things easier. This is known as an SKU system. That way, everyone involved can refer to your ‘Summer long sleeve blouse black small’ as a ‘BLMx1B’. Now everyone knows what you’re talking about. 

A reliable SKU system is also very important in your product feed and automating other sales channels.

Return your returns

Amongst the confusion and frustration of dealing with returns, stock numbers can and will be forgotten. 

It’s of the utmost importance that your stock levels are accurate. Your stock levels should always reflect a number of products on hand.

As soon as a product’s returned to you, decide what happens to it. Can it be put back into stock, or does it need to be repaired before it can be sold again? 


FIFO stands for ‘first in, first out’.  Let’s say you’re stacking milk shelves in a corner shop. You always want to make sure that the oldest milk would be the next to be sold.  The same principle applies to your own stock now.

This method ensures that you’re reducing your oldest stock. In turn, you minimise your chances of having to deal with dead stock.

Avoid dead stock

Dead stock is the stock that hasn’t been sold in a certain timeframe defined by you. Perhaps you over-committed to making a certain product or you’re still figuring out how to efficiently manage your inventory.

It’s time to cut your losses and try and move it.

This is where you’ll need to think over some exciting ways to discount it or bundle it with another complementary product.

Nurture your network

You obviously build, maintain and celebrate the relationships you have with your customers. But do you do it with the people you buy from? Your suppliers. 

It’s good practice to also grow and maintain positive relationships with these people. Whether you buy in bulk every few weeks or small amounts every few months, be sure they know what you’re doing with the product you buy from them.

There may be times where you need to ask a favour of your suppliers and get something urgently.  A rapport with them couldn’t be more important. 

Contingency plans

There may come a time when a package you’ve sent gets destroyed in transit. Will you wait for a return or send a replacement immediately? Having well-established contingency plans will ensure that you don’t further the damage by making panicked decisions.

Policies like this should be reflected in your Terms and Conditions. If you’re willing to replace lost or damaged goods, make sure your inventory reflects this.  Have an extra unit in stock. A well-planned and lenient returns policy can help you turn a disaster sale into a return customer. 

Good inventory management helps you preserve cash flow.  Having too much stock means you’re sitting on money. Not having enough isn’t good for customer service. But having the right amount of stock means you get paid quicker and your customer gets their purchase quicker.

For more tips and tricks on how to make business easier, visit the SumUp Blog, or take a look at our services. 


Anna Marie Allgaier