2017-11-30 00:00:00 Inventory English See why inventory management is crucial to the success of your online store, and learn about managing inventory using forecasting,... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/12/Store-Manager-Doing-Online-Inventory.jpg https://quickbooks.intuit.com/ca/resources/business/online-store-inventory-management/ How to Manage and Track Inventory for Your Online Store

How to Manage and Track Inventory for Your Online Store

6 min read

When you sell products in your online store, it’s easy to let inventory management slide, as virtual sales happen without the need to lay eyes on your physical inventory. However, knowing the basics of how to manage your inventory helps you avoid costly inventory issues that can leave your store rushing to fulfill orders. Attend to a few key components and you’re well on your way to setting up a smooth-running inventory system.

Forecasting Online Store Inventory

Regardless of whether your online store is new or you’ve been in business a while, you need to come up with solid numbers when ordering items for inventory. Since you’re not a fortune teller, there’s no way to know for sure how many products are going to sell ahead of time, so you use a rough estimate. You can base your estimate on sales from the past three to six months, or longer. Forecasting is easier when you calculate using:

  • current growth rate
  • previous year sales
  • market trends
  • existing contracts or subscriptions
  • upcoming advertising

The trick to good inventory ordering is to not order too much or too little. Order too many items, and you run the risk of having unsold items languishing in a warehouse, costing you precious funds that could be better spent elsewhere. Order too few items and your store’s reputation might take a hit when orders cancel due to lack of supply. With a quality inventory management system in place, forecasting accuracy should improve over time.

Using the Par Inventory System

Par levels are a basic concept of inventory management, and this term refers to the minimum amount of inventory you have in stock for each type of product sold. Par levels fluctuate depending on how much stock you order and how much of it sells at any given time. Ideally, it’s a good idea to set up a system that automatically tracks this information. Imagine how difficult it is trying to manually keep track of numerous inventory items month-by-month. Losing track of par levels can lead to your store running out of a popular item, and in turn to angry customers who vow to never shop with you again. To avoid this scenario, make a point of checking par levels every few months so you can take quick action to increase stock before a sudden sales surge erupts.

Follow the First-In, First-Out Rule

As you continue to order items to beef up your inventory, older inventory may get relegated to a back of the warehouse shelf. This can lead to product spoilage, or products that lose relevancy to customers, resulting in lost sales. The first-in, first-out (FIFO) rule is a simple method for ensuring inventory ordered first is sold before newer inventory. Many warehouses follow this rule, but you should double-check with your suppliers to ensure that all older inventory is moving out the door first.

Anticipate Inventory Problems

Inventory problems can sneak up on you. If you’re not ready, you may struggle to resolve these problems before they get out of control. Let’s say you invest in a “sure winner” that turns out to be a slow sale. How do you get rid of that stagnant inventory? What do you do when a supplier runs out of product in the middle of holiday shopping season? Consider all the things that might create an issue for your inventory, and create contingency plans for each scenario.

Ongoing Audits

Periodically, it’s a good idea to conduct inventory audits using quality inventory management software that produces a detailed report. Like many business owners, you may feel one audit per year is all you need. But doing audits every month, or every quarter, can help you stay better informed about the status of your inventory. Audit reports may also help with forecasting and risk management.

Apps to Help Organize and Manage Inventory

If you have an online retail business or sell products through a website such as eBay, Etsy, or Amazon, you need tools to help track and manage your inventory. The good news is that several apps already exist just for this purpose. In many cases, you can sync these apps with your QuickBooks Online account or other versions of QuickBooks so you can keep close tabs on your sales.


Compatible with QuickBooks Online, Shopify offers e-commerce solutions to retail businesses with their own websites, helping with everything from setting up the website to processing credit card transactions. However, Shopify isn’t just for entrepreneurs with their own websites. It can also help you manage sales on Facebook, Amazon, Pinterest, and a range of other sites. Additionally, Shopify tracks your inventory and displays the information on a dashboard when you sign in. You can add new inventory manually, and if you sync a booster app such as Restocked Alerts, you can receive email alerts when inventory is low.

DEAR Inventory

DEAR Inventory is a one-stop inventory solution that can work on a small or large scale. The app can track inventory levels in multiple locations, generate invoices, and create purchase orders when stock is low. DEAR can handle multiple price levels, expiration dates, and customer discounts. In addition, it has costing and aging features that allow you to assess the profitability of individual items and track how long it takes you to sell them. Brick-and-mortar retailers can use DEAR Inventory, and it also offers features for manufacturers. However, if you sell products online, you’ll love how DEAR integrates with many e-commerce sites, as well as with QuickBooks Online.


This app is especially designed for retailers who sell on more than one site or in more than one location. For example, if you have a brick-and-mortar shop and your own website, but also work as an Amazon reseller and list some products on eBay, Agiliron can help. Agiliron tracks inventory for all of your sales channels, and it allows you to look at inventory levels, change pricing, and create purchase orders to buy more inventory – all in one location. In addition to inventory management tools, Agiliron also facilitates order fulfillment activities and helps you manage your supply chain. Along with working with QuickBooks Online, this app also syncs with QuickBooks Desktop.

Cloud Cart Connector

You may prefer to rely on the inventory tracking tools in QuickBooks and use Cloud Cart Connector to facilitate communication between your e-commerce site and QuickBooks. This app works with QuickBooks Online, but the company makes similar programs that interact with the Pro and Enterprise versions of the software as well. If you make a sale on one of your sites, Cloud Cart Connector uploads the sale to QuickBooks. Based on that information, QuickBooks can create invoices, generate new client files, reduce the amount of inventory you have on hand, and update your revenue column appropriately. You can catalogue each of your sales separately, or you can instruct this program to organize all of your sales from each site under a single category. You can also set up this app so that it syncs at a certain time every day or week.

When you have a handle on your online inventory, you can react quickly to changing market conditions and maximize your profit. 5.6 million customers use QuickBooks. Join them today to help your business thrive for free.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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