Are you struggling with managing the inventory of your online store? Inventory management may sound simple, such as keeping track of the inflow and outflow of goods, estimating when to reorder and how many to order each time. However, as the variety of products and the number of orders expand with the growth of your business, inventory management can easily become chaotic, requiring additional manpower and time to handle. Improper management can lead to frequent stockouts, directly affecting the shopping experience of your customers.

Effective inventory management not only helps online store owners and small and medium-sized businesses (SMEs) avoid the crisis of stockouts and backlogs but also helps to control purchasing costs. In this article, ePlus will share 4 practical inventory management techniques with you, allowing you to plan your inventory and develop a suitable inventory management strategy for your online store.

1.ABC Management Method

Inventory products are classified into three categories, A, B, and C, based on product type and the amount of capital invested. Each category is managed and controlled differently.


Category A Products: These products have the highest value but the lowest sales volume, so the inventory level should be the lowest. The ordering strategy can be set to order small quantities multiple times to make the capital more fluid. Online store owners should pay more attention to the inventory of these category and regularly review their sales situation to reduce inventory management costs

Category B Products: These products have moderate value and sales volume, so the required purchase amount and approximate order quantity can be determined based on the average sales frequency in the past. Online store owners can regularly (such as once every two weeks) review the inventory and sales situation, with the review density falling between Category A and Category C.

Category C Products: These products have the lowest value but the highest sales volume. The ordering strategy can be set to order in small batches with a large quantity. Online store owners can order these products in large quantities to reduce the number of orders and avoid frequent replenishment. At the same time, ordering in large quantities makes it easier to negotiate a better price with the supplier.

2.Safety stock

To effectively avoid stockouts, online store owners can set a safety stock baseline based on product supply and demand. Unforeseeable situations can always arise when operating an online store, such as delivery delays or sudden large increases in orders due to promotions. Therefore, when the inventory falls below the safety stock level, the online store owner should order replenishment from the supplier to ensure that there is enough inventory for shipping and to prevent losses caused by uncertain factors. Safety stock can also be used in conjunction with the ABC Management Method.

3.Reorder point

Set a reorder point based on product demand, sales cycle, and safety stock level. When the inventory falls below the predetermined reorder point, online store owners can immediately order supplies to ensure long-term sufficient inventory to meet demand.


For example, for Category A products, the safety stock level is 100 pieces, and it takes 3 weeks to replenish. Referring to past sales records, the sales volume of Category A products in 3 weeks is 200 pieces, so the reorder point is 300 pieces.

*Note that not all product categories can apply Reorder Point. For example, for seasonal or short-term products, the order quantity will decrease at a certain point, so online store owners can flexibly use and adjust their strategies.

4.First in First out (FIFO)

FIFO means selling the oldest products first. FIFO is particularly suitable for products with expiration dates and those that are seasonal, such as skincare products, snacks, and clothes. Online store owners can prioritize selling the products that were purchased first to avoid product spoilage or losses due to changes in market preferences.

If you have not found a suitable way to manage your inventory, you may want to try using the above techniques. Systematically organizing inventory can not only improve operational efficiency but also avoid stockouts and deliver products to customers on time. e+Solutions’ Smart Logistics System supports real-time data updates, allowing online store owners to have a comprehensive understanding of the status and circulation cycle of all products, more accurately predict inventory fluctuations, and adjust replenishment and inventory management strategies accordingly.

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