Blog Ecommerce Top E-Commerce Inventory Management Techniques and Optimizing Inventory Control With Cin7
20 February, 2024

Top E-Commerce Inventory Management Techniques and Optimizing Inventory Control With Cin7

Finding the balance between having enough products on hand and overstocking in e-commerce is a bit like being a successful handyperson. You need the right mix of techniques, information, and tools to succeed.

Without the right tools in place, even the best e-commerce inventory management systems will fall short of helping you make better purchasing and distribution decisions. For example, if you still handle inventory with spreadsheets, it can feel impossible to keep up with your business — much less plan for growth.

Cin7 gives you the right tools to support your inventory process and seamlessly sync with your e-commerce platform, so you’re not bogged down with inventory counts, manual data entry, and processing orders by hand.

What is e-commerce inventory management?

E-commerce inventory management is the process of buying, storing, and shipping products sold online. It helps maintain a positive customer experience and grows profit margins by managing costs when done well. 

Inventory management includes: 

  • Fulfilling orders
  • Storing inventory
  • Procuring products
  • Forecasting demand
  • Transporting inventory
  • Tracking inventory levels
  • Shipping products to customers

Proper inventory management can give your e-commerce brand a competitive advantage. However, if you have inventory inefficiencies, problems multiply quickly and drain your resources.

E-commerce inventory management methods

Unlike inventory accounting methods like FIFO and LIFO, which revolve around inventory value, inventory management strategies for e-commerce deal with tracking, planning, and moving inventory efficiently.

Minimum order quantity (MOQ)

Minimum order quantity (MOQ) is an e-commerce fulfillment term that sets a minimum quantity of items for each order. Manufacturers and wholesalers often use MOQ to avoid small orders with low profit margins.

While minimum quantities help keep profit margins higher for wholesalers, this method may reduce overall sales in B2C settings for items consumers don’t need in bulk. 

If you’re a B2C seller, MOQ orders from your supplier might seem like a good deal, especially if the items are discounted. However, those discounts can’t outweigh the costs of overstocking slow-moving items.

Cin7’s inventory management software includes forecasting tools, such as inventory velocity reports, to help you decide which products to buy in bulk. These reports allow you to reduce your inventory costs by avoiding MOQ orders on slow-moving products.

ABC analysis

ABC analysis is an inventory management method that categorizes inventory items based on their importance to the business. 

A items

A items require tight inventory control and the highest accuracy levels because they have more demand or high profit margins. For example, a loss of sales on a brand’s best sellers or flagship products could significantly impact revenue.

If Apple were to use this strategy, its A items would include the latest iPhone model because of its high demand and the Pro versions of its products because of their higher prices.

B items

B items are less controlled than A items but still require good records. These include mid-range products and items with steady demand that aren’t as popular as your bestsellers. Continuing with the Apple example, B items might include non-Pro products and older iPhone, iPad, and laptop models. 

This category might also include accessories like the Apple Watch or AirPods, which are in demand but are priced lower than top-tier phones and computers.

C items

C items require minimal recordkeeping as they are least likely to go out of stock or don’t significantly contribute to profit margins. C items include low-demand products that are less likely to sell out, and low-profit margin items where lost sales from temporary shortages don’t significantly impact revenue. 

For Apple, this category might include accessories like keyboards, trackpads, Apple pencils, phone cases, and power cables.

Prioritizing products by class allows you to focus more time and effort on the products that impact your business most. However, while this method is helpful for focusing and prioritizing your efforts, this method can lead to a higher risk of obsolescence and quality issues for B and C items.

Safety stock

Safety stock is extra inventory kept on-hand to avoid stockouts in case of a sudden increase in customer demand or inaccurate inventory forecasting. It’s often beneficial for holiday sales periods or when products have longer order lead times, but this method increases the risk of obsolete inventory. 

If you don’t have enough safety stock on hand, Cin7 lets you easily generate backorders so you can still capture sales for items that are currently out of stock.

Just-in-time (JIT)

Just-in-time (JIT) is a popular e-commerce inventory management method where businesses only order products to meet current needs. The method’s goal is reducing excess inventory and deadstock (i.e., businesses want inventory to arrive just in time to be sold and not sit in the stockroom). 

Since JIT doesn’t use safety stock, it has a higher risk of stockouts if you don’t receive inventory from suppliers in time.

As such, it’s crucial to have real-time inventory levels and strong relationships with your supply chain members. Cin7 gives you access to accurate real-time stock levels and access to data that provides you with more accurate demand forecasting and planning.

Demand forecasting

Demand forecasting, sometimes called inventory planning, uses past sales data and predictive analytics to forecast demand and inventory needs. It’s a data-driven way to achieve a happy medium between methods like JIT and safety stock.

Third-party logistics (3PL)

Third-party logistics (3PL), such as Fulfillment by Amazon (FBA), reduces the need for in-house inventory staff by offloading fulfillment to a third-party provider that handles tasks like picking, packing, and shipping. 

With Cin7’s 3PL software, you can keep a close eye on inventory levels and monitor the performance of your 3PL partners to optimize fulfillment speed and reduce costs.


Dropshipping is an e-commerce fulfillment method that avoids stock completely. When a customer orders, you send it to the manufacturer, who fulfills it and sends the product directly to the buyer. It’s a popular e-commerce inventory management plan because it eliminates the need to store stock.

Dropshipping also eliminates the need for storage, inventory staffing, and buying ahead. However, it takes some customer satisfaction control out of your hands as you aren’t controlling shipping time, packaging, or how the product is handled. 

That said, it’s an excellent option for new sellers with limited capital or warehousing space. Dropshipping can also be useful for established brands that want to test new products without high initial costs for test inventory.

In both cases, Cin7’s Smart Buyer feature enables seamless dropshipping order management for online businesses that don’t want to worry about purchasing and holding inventory.

How inventory management affects e-commerce

If you’re an e-commerce product seller, inventory is the lifeblood of your business. Proactively managing your inventory creates a competitive advantage and prevents inventory from holding your brand back.

Consequences of inventory inefficiency

Relying on manual workflows to track and control inventory across multiple online storefronts  creates inefficiencies that negatively impact your e-commerce business. 

In particular, inventory inefficiencies can lead to: 

  • Stockouts and item shortages: Out-of-stock products lead to negative customer experiences that can drive buyers away. For e-commerce sellers, this can be especially challenging because it’s easy for shoppers to go to a different website to buy from a competitor. Once customers leave, it costs additional time and money to convince them to return.
  • Deadstock: If you’re not using dropshipping, you often collect surplus inventory that doesn’t sell, takes up valuable warehouse space, increases storage costs, and leads to financial losses when you heavily discount items or offload them to make space for top-selling products.
  • Lack of real-time visibility: Manual inventory tracking makes it almost impossible to know how much product you have on hand in real time, and it’s especially challenging for e-commerce sellers managing multiple online stores and sales channels. The delay between sales and counts make it harder to know how much to reorder and when.
  • Manual overload: Without automation, order fulfillment and inventory management can easily overwhelm an e-commerce business. For example, if you don’t have one source of information that supports all of your stores, you can easily spend all your time assessing stock levels just to ensure that your product availability information is accurate everywhere. This leaves little to no time for interacting with customers and planning for growth. 
  • Lack of supply chain resilience: You’re more vulnerable to external supply chain disruptions when you don’t have visibility into your product lifecycle, and this can lead to issues like shortages and delayed shipments. Manual inventory workflows also increase recovery time from supplier shortages and delays, often leading to negative customer experiences like delayed shipping or stockouts.

Over time, poor inventory control makes you feel like you’re stuck working in your business instead of having the freedom to work on it.

Benefits of Connected Inventory Performance (CIP)

Connected Inventory Performance (CIP) takes full advantage of automation and technology to gain real-time visibility into inventory. It lets you tailor your inventory management to your business’s unique needs. 

With Cin7, you can leverage CIP in your e-commerce ecosystem and realize:

  • Clear supply chain visibility: CIP provides insight into your entire supply chain, empowering you to build supply chain resilience by making data-driven decisions to lower your risk, increase availability, and improve productivity.
  • Operational efficiency: E-commerce sellers often work with low staff numbers so efficiency is vital. Automating repetitive inventory activities can save your team hours each week and help you reduce costly errors, such as duplicate orders.
  • Seamless integrations: Direct integrations make it easy for product sellers to connect every part of the business with their e-commerce inventory operations. Using integrations to share data generates benefits like more accurate product information across various online sales channels, automated fulfillment, and simplified auto-assembly.
  • Growth opportunities: Cin7’s integrations and inventory management system empower sellers to reach wider audiences by leveraging the most popular e-commerce platforms, like Amazon and eBay. In addition, e-commerce brands can continue to grow without increasing headcount by leveraging automation to streamline inventory control for each new online storefront.

CIP lets you automate inventory management and consolidate your e-commerce tech stack, giving you the time and resources to focus on strategies that help you scale, such as social media marketing, online checkout optimization, or adding new sales channels.

Benefits of using Cin7’s Connected Inventory Performance for e-commerce inventory management

Cin7’s inventory management software helps create Connected Inventory Performance by putting inventory management at the center of your operations and giving you real-time visibility into your entire e-commerce ecosystem.

By automating workflows with Cin7 instead of managing inventory through spreadsheets, you can see how orders across different channels impact overall stock levels so you don’t run out of products. Cin7 also makes it easy to automate fulfillment for each sales channel and provides the option to consolidate orders so you can save time, reduce costs, and provide the best buyer experience.

Ultimately, Cin7 removes the burden of costly and time-consuming inventory control strategies. Instead, by leveraging automation and visibility, e-commerce sellers can increase working capital and have more time available to figure out the best way to scale their business for the future.

Once you’ve decided how you want to scale your online store, you can leverage Cin7’s wide range of direct integrations to sell your products through the most widely used e-commerce platforms, including Amazon, eBay, and Shopify.

Improve your e-commerce inventory management with Cin7’s powerful integrations

Connecting your inventory to other parts of your organization and supply chain can help you streamline your workflow and provide the information you need when you need it.

Cin7 drives connectivity between your inventory system and the other crucial areas of your business through seamless integrations.

E-commerce platforms

Cin7 integrates directly with major e-commerce platforms, including WooCommerce, Shopify, and Magento. Our integrations let you sync your inventory data with your online stores, allowing real-time stock control and seamless order processing. You can also automate order processing and sync data directly with your fulfillment provider to better optimize the customer experience.


In addition to e-commerce platforms, Cin7 enables native integrations with online marketplaces, including Amazon, Wayfair, Etsy, and Walmart. These integrations make it easy to manage a multichannel sales strategy and share your products with a wider audience without manual overload by syncing inventory and automating admin tasks.

How Anova used Cin7 to simplify bulk Amazon orders

Before using Cin7’s Amazon integration, smart kitchen appliance seller Anova struggled with bulk Amazon orders. While these were big revenue generators, they also took up significant time for the six-person team. Implementing Cin7’s Amazon integration reduced work hours spent on bulk orders from one full day per week to about one hour.

EDI retailers

Cin7 also integrates with EDI retailers like Sears, Walmart, and Sephora, enabling instant data transfers for invoices, purchase orders, advance shipping notices, and functional acknowledgments. 

Cin7 also gives you access to an extensive network of EDI retailers and robust features so you can manage all your EDI channels in one place without having to invest in a third-party provider to connect your data.

ModaConcrete saves valuable time with Cin7’s EDI integrations

ModaConcrete used Cin7’s EDI integration to increase its throughput significantly. With Cin7’s help, their small team went from struggling to manage 300 orders per week to easily handling 2,000 per week.


Cin7 also offers integrations with a wide range of 3PL providers, including Fulfillment by Amazon (FBA), ShipBob, and ShipHero. With these integrations, you can send orders with a few clicks, reduce manual work, and enable faster deliveries to your customers. 

For example, with Cin7’s Amazon FBA, you still get full visibility into each step in the fulfillment process and stock levels in your outsourced warehouse, so you know when to reorder. With Cin7, you can automatically create backorders when stock is short, so you don’t miss out on sales.


For e-commerce brands handling their own shipping, Cin7 integrates with shipping carriers so you can automate tasks such as label printing, invoicing, and order tracking. This results in less manual work, faster deliveries, and a better customer experience powered by automatic shipment tracking. 

Intalite saves time with Cin7’s Shiptheory integration

By using Cin7’s Shiptheory integration, Intalite’s team saved hundreds of hours per week that they previously spent shipping products to customers. With that time, Intalite was able to focus on diversifying its sales channels and expand into e-commerce with Cin7’s Shopify integration to create more sustainable long-term growth.

Supply chain management and demand planning

Removing data silos to enable data sharing supports supply chain optimization and is crucial for e-commerce inventory management. It creates more visibility, transparency, and accuracy, allowing you to improve supply chain relationships and eliminate unnecessary spending. 

In fact, 73% of supply chain professionals note that data sharing and collaboration are critical, and 70% already use visibility solutions.

That’s why Cin7 offers numerous integrations with supply chain and demand planning tools like StockTrim and Inventoro. With these tools, it’s easy to generate end-to-end supply chain visibility and leverage that data into more advanced and accurate forecasts. 

Better forecasts and data help you avoid stockouts and reduce excess inventory while using sales data and supply chain metrics for a more efficient replenishment strategy.

Unleashing potential with CIP from Cin7

Inventory management drives your business as a core piece of your company’s tech stack. 

Cin7’s inventory management solution helps eliminate inventory inefficiency and enable Connected Inventory Performance by providing real-time visibility, workflow automation, and easy integrations with sales channels and supply chain partners. 

With Cin7, you can turn manual overload into streamlined operations and scale your business exactly how you want. See how Connected Inventory Performance can make a difference in your business by starting your Cin7 free trial today.

Stop managing your inventory.
Start connecting it.