4 consequences of Poor Inventory Management

August 29, 2018

Many eCommerce business owners state the biggest challenge in running their business is in inventory and stock management. While many companies have a staggering amount of capital tied up in inventory, over 43% of small companies noted in a recent survey they don’t track inventory or use manual processes to do so.(1)

Finding the sweet spot in how much stock to have on hand should be the goal of any successful and viable inventory management plan. While companies don’t want to oversell any item across their webstores, they also don’t want to have unsold items sitting in a warehouse for years. While these issues affect all retailers, for omnichannel eCommerce retailers, inventory management can be especially time-consuming and complicated.

eCommerce retailers often list their products in several marketplaces for greater reach, including on Amazon and eBay. The cross-listing of products can make inventory management tedious and error-prone. Without a centralized place to manage inventory and orders, duplicate sales and the misallocation of funds are common.

Thankfully, retailers can easily avoid inventory mismanagement through preparation, organization, and inventory management systems. To highlight how vital inventory management and eCommerce platforms are in running an omnichannel retail store, we’ve highlighted four real consequences of poor inventory control practices:

Poor eCommerce UX 

Placing an order on a webstore to later find out the item is out of stock can affect customer relationships. In today’s omnichannel environment, consumers have options at every turn. People are much more likely to find a company that can fulfill orders on time than return to your store after seeing an out of stock message. Letting down customer can add up and has a long-term impact on your business.


Ordering too much product results in higher costs, including storage and warehousing, and losses due to obsolescence, shrinkage, and deterioration of products. Tactics such as product discounts, sales, and bundling can help move ordered products in greater quantities than necessary, but this often results in selling at a loss or at least reducing revenue from the anticipated amount.

Inability to forecast and track trends

Without a system in place to assist in forecasting demand, retail managers are often taking a shot in the dark in how many units they’ll move for a certain product. To accurately forecast demand, you’ll need prior sales to compare to and check past sales history. Inventory management systems, like ChannelGrabber, can assist in going back monthly, quarterly, and yearly to look at your entire sales history and determine which products consistently sell and look at trends and patterns throughout the year.

Lose out to competitors 

The mismanagement of inventory can lead potential customers to leave for other more organized eCommerce providers. A recent survey found that 70% of shoppers will go to a competitor rather than wait for an item that is out-of-stock; so in order to retain customers, a retailer must have stock on hand.(2)

As discussed above, forecasting and warehouse management are critical aspects of any successful inventory management plan, along with many other areas.

Which areas are you investing in most heavily to evolve your inventory management practices? See the chart below for details on where retailers are investing money to improve their inventory management practices.(3)

Inventory management practices

In an increasingly competitive environment, it is vital that retailers control costs, streamline operations, and have accurate, real-time data both for business operations, like forecasting, and to provide a satisfying omnichannel customer experience. As the above graph suggests, more and more retailers are investing in these areas to evolve their inventory management practices and keep up with the changing landscape.

A comprehensive, multichannel inventory management solution, like ChannelGrabber, can help eCommerce retailers with all aspects of inventory management. ChannelGrabber provides a fully-integrated system for listing stock and managing it across all outlets, including online marketplaces, and brick-and-mortar stores and warehouses. It also provides tools for forecasting, stock synchronization, and data analytics to help your company streamline, and become more efficient and effective.

Learn more about inventory management


  1. http://www.waspbarcode.com/small-business-report
  2. http://www.freestylesolutions.com/wp-content/uploads/2015/03/Customer-Experience-Freestyle-Solutions.pdf
  3. https://www.statista.com/statistics/780763/inventory-management-investments-retailers-manufacturers/