What is Inventory Management Software (IMS)?

Inventory management software is a comprehensive tool designed to track, manage, and optimize inventory levels across various types of businesses. This software goes beyond traditional manual tracking methods like spreadsheets, offering a tech-driven solution for handling inventory planning, stock levels, customer orders, sales data, and shipping schedules in real-time. It integrates functionalities such as barcode scanning, automated reorder points, and sophisticated data analytics to facilitate efficient and accurate inventory control.


Free Download: Guide to Inventory Management Software

Example of Inventory Management Software for Ecommerce Sellers

For ecommerce sellers and growing businesses, managing inventory across multiple online marketplaces can be challenging. Inventory management software automates and synchronizes stock levels, ensuring consistency across platforms such as Amazon, eBay, and Shopify. This synchronization is key to preventing stockouts and overstocking, maintaining customer satisfaction, and optimizing the supply chain.

Example of Inventory Management Software for Warehouse Managers

In the context of warehouse management, this software is vital for coordinating various operations, from stock monitoring to order fulfillment. Whether a warehouse manager for an ecommerce brand or a third-party logistics (3PL) provider, it provides real-time visibility of inventory, enabling warehouse managers to set effective reorder points, receive low stock alerts, and manage inventory movement efficiently. The use of technology like barcode scanners significantly increases picking accuracy, while planning tools help optimize warehouse layout and adapt to changing demands.

How Inventory Management Helps Grow Your Ecommerce Business

Effective inventory management is a pivotal factor in scaling ecommerce operations. By precisely monitoring stock levels and predicting sales trends, inventory management software significantly reduces the risks of stockouts and overstocking. It plays a crucial role in maintaining customer satisfaction and streamlining supply chain operations. Let's explore the specific benefits this technology brings to growing ecommerce businesses:

  • Optimized Stock Levels: Ensures a balance between supply and demand, minimizing the risk of excess inventory while providing low stock alerts to avoid stockouts.
  • Data-Driven Reordering: Automated reorder points, informed by real-time data and sales analytics, allow for timely restocking decisions.
  • Multi-Channel Synchronization: For businesses selling on multiple platforms, inventory software synchronizes stock levels across all channels, ensuring consistency and reducing the likelihood of overselling.
  • Improved Warehouse Efficiency: With tools for space optimization and faster picking processes, warehouse operations become more efficient, reducing turnaround times for customer orders.
  • Enhanced Customer Satisfaction: By preventing stockouts and ensuring timely deliveries, inventory management software helps maintain a positive customer experience.
  • Cost Reduction: It aids in reducing holding costs by preventing overstock and identifies areas where expenses can be minimized without impacting customer service.
  • Insightful Analytics and Reporting: Providing detailed insights into sales patterns, inventory turnover, and customer preferences, it assists in making informed strategic decisions.

These benefits address common challenges faced by ecommerce sellers and other growing businesses. Effective inventory management not only sustains business growth but also provides a competitive edge in a demanding market.

What Results Can I Expect From Inventory Management Software?

Implementing an inventory management software is a strategic move that can revolutionize the way you handle your ecommerce operations. It's about more than just keeping tabs on stock levels; it's about ushering in a new era of efficiency, control, and profitability for your business. 

Inventory Accuracy


Ecommerce Integrations


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Here's a look at the key benefits you can expect from adopting robust inventory management software:

  • Enhanced Operational Efficiency: Automating tasks like stock replenishment and sales data synchronization across multiple channels saves time and reduces errors. This efficiency extends across your entire inventory management, from tracking products in multiple warehouses to updating stock levels in real-time.

  • Comprehensive Control Over Inventory: Move away from manual tracking and complex spreadsheets. A sophisticated IMS offers a centralized system for managing inventory, even for businesses experiencing rapid growth or managing multiple channels. This level of control is vital for making informed decisions about stock levels, allocation, and replenishment. It can even set notifications for when inventory levels are too high or low.

  • Increased Profitability: With better inventory management, your business can optimize product allocation and fulfillment strategies, leading to improved profitability. An efficient IMS helps in aligning your inventory levels with market demand, ensuring you don't miss out on sales opportunities or incur unnecessary holding costs.

  • Optimized Cost and Labor: Efficient inventory management means not only managing products but also optimizing the use of resources such as cash, labor, and physical assets. By streamlining these processes, an IMS can help your business run at peak efficiency, translating into cost savings and better resource allocation.

  • Risk Mitigation: An effective IMS reduces the risks of overstocking or stockouts. This balance is crucial for maintaining customer satisfaction and ensuring consistent sales performance, as it prevents lost sales due to out-of-stock scenarios and minimizes the financial strain of overstocked inventory.

Discover how an Inventory Management System can transform your business. Download "The Beginner's Guide to Inventory Management Software" now. Learn More

Does my Ecommerce Company or Warehouse Need New Inventory Management Software?

Deciding whether your ecommerce company or warehouse needs new inventory management software is a critical step in scaling your operations effectively. This decision often hinges on identifying specific pain points and recognizing the catalysts for change. Here are key indicators that suggest it might be time to consider upgrading your inventory management solution:

  1. Increasing Order Volumes and Complexity: As your business grows, the number of orders and their complexity can overwhelm basic inventory systems. If you're struggling to keep up with the demand or facing challenges in managing multiple channels, an upgrade is likely necessary.

  2. Manual Process Overload: If your team spends excessive time on manual inventory tracking, it’s a clear sign you need a more automated and sophisticated system. This shift can significantly reduce human error and free up time for strategic tasks.

  3. Inventory Accuracy Issues: Frequent stock discrepancies, overstocking, or stockouts are indicators that your current system may not be effective. Advanced inventory management software can provide real-time visibility and accuracy.

  4. Poor Customer Feedback Related to Inventory Issues: Negative customer experiences due to inventory mismanagement – such as delayed orders or inaccurate stock information – can hurt your brand's reputation and bottom line.

  5. Lack of Integration with Other Systems: If your current inventory software doesn't integrate well with other systems like your CRM, ecommerce platform, or accounting software, it can create inefficiencies and data silos.

  6. Difficulty in Scaling Operations: If your current system is hampering your ability to scale, especially in terms of handling more products, suppliers, or expanding into new markets, it's time to consider a more robust solution.

Exploring advanced solutions like Extensiv Warehouse Manager is a logical next step for those encountering these scenarios. Its comprehensive inventory management capabilities are designed to streamline your operations and support growth.

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Modern Inventory Management Software Features to Look For

A comprehensive inventory management system provides clarity across operations, tracking supplier details, and offering a unified view of all sales channels, warehouses, and products. This centralization is key for identifying sales patterns, growth opportunities, and reducing inefficiencies within your operations.

No More Stockouts

Crucial to ecommerce success is the ability to prevent stockouts. Modern inventory systems offer real-time stock level updates, enabling seamless order fulfillment without the fear of backorders or delays. This functionality ensures that your inventory consistently meets customer demand.

No More Overstocking

Avoiding overstocking helps prevent resource tie-ups and unnecessary expenses. Today's inventory systems provide in-depth insights into product locations and quantities, alongside superior tracking capabilities. This approach effectively prevents overstocking, optimizing your overall cash flow.

Real-time Inventory

Real-time inventory management offers up-to-date data across all sales channels, ensuring consistent SKU management. This feature includes mechanisms to avoid overselling by showing only a percentage of your available inventory based on sales channel settings and optimizes inventory displayed on each channel to create a sense of scarcity, thereby driving more sales. 

Barcoding and Scanning

Barcoding and scanning are now standard in inventory management, facilitating effortless tracking and management within warehouses. This feature streamlines the process of generating and printing barcode labels, significantly enhancing overall operational efficiency. By leveraging barcode scanning functionality, companies can ensure accuracy in the receiving, picking, and packing process in real-time.

Bundle and Track

The capability to manage product bundles and kits is a game changer, offering automated calculations for maximum bundle quantities based on current stock and providing detailed inventory values for each SKU. This feature simplifies the management of bundled products and multi-channel order fulfillment.

Introduce Clarity

With the best inventory management tools, you will have a comprehensive set of inventory dashboards to provide clarity across operations, tracking supplier details, and offering a unified view of all channels, warehouses, and products. This centralization is key for identifying patterns and growth opportunities, helping with forecasting, and reducing inefficiencies within your operations.

All Channels in Check

Effective inventory management involves detailed cross-channel reporting and rapid response to new orders. With features like real-time syncing and a unified inventory view, these systems ensure you maintain control as your sales volume increases, keeping all channels in check, and offering traceability through your inventory life cycle.

For a deeper understanding of how these features can revolutionize your inventory management, visit our detailed blog article, Modern Inventory Management Software Essentials. Dive into each feature's impact and discover how they can collectively streamline and enhance your inventory management practices.

Elevate your warehouse efficiency using advanced inventory management software: gain real-time visibility, automate barcode processes, and synchronize multi-channel activities.

Inventory Management Software Integrations

The integration of inventory management software with key technological platforms is revolutionizing warehouse operations. Facilitated by Integration Platform as a Service (iPaaS) tools like Extensiv's Integration Manager, they are instrumental in streamlining processes and enhancing efficiency in modern logistics and supply chain management.

Shopping Cart Integrations

Integrations with leading shopping carts like Shopify, WooCommerce, and BigCommerce have become crucial. They enable real-time synchronization of inventory and orders, ensuring that product availability is accurately reflected across online stores. This alignment is essential for maintaining customer trust and reducing the risk of overselling.

Marketplace Integrations

Linking inventory systems with marketplaces such as Amazon, Walmart Marketplace, and Etsy offers immense benefits. It allows for efficient management of listings, orders, and inventory across multiple platforms. This connectivity is pivotal for businesses aiming to expand their reach and capitalize on the vast customer bases of these global marketplaces.

Order Management System (OMS) Integrations

OMS integrations, including platforms like Extensiv Order Manager, Cin7, and Dear Systems, centralize orders from various channels. This consolidation enables a more streamlined processing and fulfillment process, offering businesses a unified view of their order management activities and facilitating better decision-making and customer service.

Shipping Platform Integrations

Shipping platform integrations with solutions like ShipStation, Shippo, and Desktop Shipper optimize the shipping process. They automate various tasks, including carrier selection and tracking, enabling businesses to expedite shipments while maintaining accuracy and reducing operational costs.

EDI Integrations

Integrating with Electronic Data Interchange (EDI) systems like SPS Commerce is vital for automated communication and data exchange with trading partners. This integration facilitates efficient and error-free transactions, crucial for maintaining robust supply chain relationships and ensuring compliance with partner requirements.

Point of Sale (POS) Integrations

Incorporating POS systems like Lightspeed Retail with inventory management platforms bridges the gap between online and offline sales channels. This integration offers real-time inventory updates, which is crucial for maintaining accurate stock levels and providing a seamless customer experience across all sales platforms.

Each of these integrations plays a vital role in modernizing warehouse operations, ensuring businesses can keep pace with the evolving demands of the digital marketplace.

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Tips for Setting up Your Inventory Management Software

Implementing an inventory management system can be a game-changer for your business, enhancing efficiency and accuracy across the board. To get the most out of your IMS, it's crucial to follow best practices from the outset. Whether you're integrating multiple sales channels, setting up stock tracking, or looking to improve inventory accuracy, these tips will guide you through the process of setting up your inventory management system for optimal performance.

1. Centralize Management Across All Channels

Ensure that your IMS integrates seamlessly with all sales channels, including online marketplaces, ecommerce platforms, and physical stores. This centralization is crucial for real-time inventory tracking and avoiding issues like overselling. Consistent data across all channels is key to maintaining an accurate picture of your stock levels.

2. Implement Effective Stock Tracking and Control

Set up comprehensive stock tracking mechanisms within your IMS. Utilize features like barcode scanning and real-time updates to monitor stock movements accurately. Establish control measures such as minimum stock levels and reorder points to prevent stockouts and overstocking, ensuring your inventory levels are always optimized.

3. Enhance Inventory Accuracy

Accuracy in inventory management is non-negotiable. Regularly conduct audits and reconcile inventory data within your IMS to ensure accuracy. Use the system's reporting and analytics tools to identify and rectify discrepancies, enhancing the reliability of your inventory records.

4. Optimize Costs and Streamline Processes

Your IMS should not only help manage inventory but also optimize operational costs. Leverage inventory management features to analyze inventory turnover, identify slow-moving items, and reduce carrying costs. Streamlining processes like order fulfillment, purchasing, and returns within the IMS contributes to cost savings and operational efficiency.

5. Regularly Review and Update Your IMS Settings

Inventory management is a dynamic process; regularly review and update your IMS settings to align with changing business needs. Stay responsive to trends in customer demand, seasonal variations, and supply chain disruptions, adjusting your inventory strategy accordingly.

Implementing these tips will help you establish a robust foundation for your inventory management system, ensuring it delivers maximum value and supports your business's growth and adaptability in a competitive marketplace.

How to Get Started with Extensiv Inventory Management 

Extensiv Warehouse Manager software UI

Free Download: Guide to Inventory Management Software

Investing in advanced inventory management software transforms the way your business handles products and orders. It's about getting real-time insights, syncing with multiple channels, and making data-driven decisions that can significantly improve your operations. Here are some key advantages you can look forward to:

  • Streamlined Operations: Experience unmatched efficiency in inventory tracking, order management, and warehouse operations.
  • Multi-Channel Integration: Seamlessly manage inventory across various online platforms, ensuring consistency and preventing overselling.
  • Real-Time Data: Access up-to-date inventory levels, sales data, and shipping schedules, crucial for accurate decision-making.
  • Barcode Efficiency: Utilize advanced barcode scanning for accurate tracking and management, enhancing overall operational speed.
  • Data-Driven Insights: Leverage sophisticated analytics for a deeper understanding of sales patterns and inventory turnover, aiding strategic decisions.
Achieve a new level of efficiency by embracing a modern inventory management solution.

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Frequently Asked Questions

Is inventory management software suitable for small businesses?
Yes, inventory management software is highly suitable for small businesses, especially ecommerce companies. These systems streamline inventory tracking and sales orders, reducing time-consuming manual tasks. They often include cloud-based solutions and mobile apps compatible with both Android and iOS, making inventory management accessible from anywhere. Additionally, they can integrate with invoicing and accounting software like QuickBooks, simplifying financial workflows for small business owners.
Is inventory management software useful for warehouses and 3PLs?
Inventory management software is extremely useful for warehouses and 3PLs. It enhances warehousing operations through automation of tracking inventory items, asset tracking, and generating shipping labels. The software supports complex workflows, including fifo (first-in, first-out) methods and inflow management, crucial for 3PL providers.
Does Extensiv offer inventory management software?
Yes, Extensiv offers comprehensive inventory management software designed for businesses of all sizes. It includes key features like real-time inventory tracking, forecasting, automation, and multi-channel management. Extensiv's software is cloud-based, offering mobile device compatibility and API integrations for extended functionality through add-ons.
When should an ecommerce company get inventory management software?
An ecommerce company should consider getting inventory management software when they start experiencing challenges in tracking inventory, managing multiple sales channels, or handling increasing volumes of purchase orders and sales orders. It's also essential when dropshipping or handling consumables to ensure accuracy and efficiency.
What’s the best Shopify inventory management software?

The best Shopify inventory management software is one that seamlessly integrates with Shopify, offering features like real-time inventory tracking, automation of processes, and easy generation of purchase orders and inventory reports. Solutions like Zoho Inventory and Extensiv are popular among Shopify users for their multichannel capabilities and user-friendly interfaces.

What’s the best Amazon inventory management software?
For Amazon sellers, the best inventory management software provides robust inventory tracking, forecasting, automated replenishment, and integration with Amazon's marketplace. Extensiv's inventory management solution is known to be one of the best for Amazon, offering advanced features and multi-channel support.
Can inventory management software help with multi-location or multi-channel operations?

Yes, inventory management software is invaluable for managing multi-location or multi-channel operations. It offers centralized control and visibility over inventory items across different locations and sales platforms, enabling businesses, especially wholesalers, to track stock levels, fulfill orders efficiently, and minimize the risk of stockouts or overstocking.

Is inventory management part of ERP?
Yes, inventory management is often a part of an ERP (Enterprise Resource Planning) system. In an ERP, inventory management functionalities are integrated with other business processes, like finance, sales, and supply chain management, providing a comprehensive solution for business owners to manage their company's operations effectively.