Originally published on October 12, 2022
Last updated on March 6, 2026
How to Change Your Inventory Management in 6 Easy Steps
When you are trying to run a business efficiently, a lack of helpful tools or outdated tools can make work stressful. While inventory and stock are not the most glamorous areas to manage, they are necessary to your business’s success. That’s why every business needs an efficient inventory management system, whether upgrading an existing system […]
When you are trying to run a business efficiently, a lack of helpful tools or outdated tools can make work stressful. While inventory and stock are not the most glamorous areas to manage, they are necessary to your business’s success.
That’s why every business needs an efficient inventory management system, whether upgrading an existing system or choosing a better inventory management option. Read through the following signs to determine when to update inventory management systems for your business.
9 Signs You Need to Upgrade Your Inventory Management System
If you’re wondering whether it’s time to change your inventory management system, review the following signs. Relating to any of the following means it’s probably time to change the way you do inventory management.
1. You Spend Too Much Time Consolidating Data
Your inventory expands with customer demand. However, a growing inventory also comes with an overwhelming amount of paperwork that can consume your time and energy.
2. You Frequently Have Out-of-Stock or Back-Ordered Items
Without proper inventory management, you don’t know how fast your products are selling and when to restock your inventory.
3. Your Business Is Growing Fast
A growing business means increased paperwork. If you manually manage your inventory or have an outdated inventory system, you have less of a chance of keeping up with your customer demand.
4. Your Current Software Company Is Going Out of Business
If your software provider is going out of business, your platform will shut down. Look into a new management software so you can transfer your information before you lose it.
5. You Track Your Inventory Manually
Manually tracking inventory takes time and energy that you could spend improving your social media presence, store management and customer service.
6. Your Money Is Stuck in Excess Inventory
Without meticulous management, you may order products based on rough estimates. These estimates put you at risk of losing money to more products than your customers need.
7. Productivity and Morale Are Decreasing
Traditional inventory management tools are outdated, making them more difficult and time-consuming to use. As a result, productivity will be low. When productivity is low and your inventory management tools are less than ideal for your needs, staff morale will decline quickly. Employees will have less drive and enthusiasm, which contributes to decreasing productivity.
8. You’re Experiencing Frequent Errors and Mistakes
Most traditional inventory management methods require significant amounts of manual work. When processes are completed manually, there is more room for human errors and mistakes. While human error will also be unavoidable to some degree, you may need to consider upgrading inventory management to have automated features if mistakes and errors occur frequently.
9. Suppliers, Partners and Competitors Have More Advanced Systems
If competitors and supply chain partners upgrade to more advanced inventory management tools, you may envy their capabilities or feel left behind. Updating your system can potentially increase your profitability and help you gain ground on your competitors.
How to Improve Your Inventory Management System
Improving your inventory management system helps your business grow. Making a few changes to your management system can result in major improvements across your supply chain. Here are four ways to improve your inventory management system:
Implement barcode tracking: A barcode system allows your business to efficiently and accurately track inventory. For example, rather than having employees manually count inventory shipments, utilize barcode scanners. This method reduces the risk of human error and is significantly more efficient and accurate. Scanners also immediately transfer inventory updates to your inventory management software, which eliminates another step for your employees.
Set minimum stock levels: Achieving the perfect inventory level for every product is nearly impossible. However, setting minimum stock levels is an effective step in the right direction. Doing so allows you to order new inventory before your current stock runs out. This method helps prevent your products from going completely out of stock. Set your minimum stock based on how often a certain product sells and how long it will take to receive new stock.
Clear obsolete inventory: Obsolete or slow-moving products take up valuable space in your inventory warehouses. Be careful not to overlook these products. The longer these products sit on your shelves, the more value they lose and the less space you will have for more important business components. Be proactive with your inventory so obsolete products don’t hurt you. For example, put obsolete products up for sale at a heavy discount to clear some space.
Choose the right inventory management software: You’ll come across several different inventory management software options, so choosing the right system for your business is crucial. For example, consider whether a system has the features you need, will be easy to use and can integrate with your sales systems so everything works together. Being able to test how the system will work for your business is also a great way to determine if the software is right for you.
Choosing New Inventory Management Software
Whether you track inventory manually or need new software, switching inventory management systems should make business easier. Today’s software systems are fast and can reduce the potential for human error. You also have more control over your inventory, and these systems can increase your profits over time.
Keep the following questions in mind when searching for a new software system:
What is my budget?
Do I need a basic or advanced system?
Is the software adaptable to my business now and its future growth?
How long will the software take to implement?
Does the company offer customer assistance?
Finale Inventory Has an Inventory Management Solution You Can Trust
Help grow your e-commerce business by using the proper tools for inventory management. Finale Inventory offers a cloud-based inventory management software for your business’s inventory needs. No matter your company’s size, our software can meet your demands quickly. Our plans are month-to-month with no paid long-term commitment. You even receive specialized training for your new software system when you sign up for a program.
“The core of maturity, that I see, is starting with a unified view of inventory. I’ve got to be able to accurately represent what do I have, make sure that I know where it’s located so I can get it to my customers quickly.”
— Troy Graham, Descartes
What is the first thing I should fix if I want to scale operations?
Start with a unified view of inventory. The core of maturity starts with being able to accurately represent what you do have and make sure that you know where it’s located to get it to customers quickly. Without a unified view across your warehouses, 3PLs, and vendors, you cannot make the best decisions because you don’t have the best information at hand.
With Inventory Visibility, Businesses Can Make Smarter Allocation Decisions
Once inventory is centralized, businesses can move from reactive updates to intentional allocation. They can decide how much inventory to expose to each channel, when to use buffers, which marketplaces need extra protection, and how seasonality or campaign performance influence availability.
Once I know what inventory I have, how should I decide where to make it available?
Inventory allocation should reflect where orders are coming from, where marketing is working, and which channels carry the most risk. Once you know what you have and where it is located, you can think more strategically using centralized inventory to make prioritization happen automatically. One fertilizer company lost a little over 5,000 orders in one weekend because someone manually uploaded the wrong available inventory to Amazon.
Better Inventory Data Improves Planning, Purchasing, and Growth Bets
Better visibility turns inventory data into a planning tool. With insight into sales velocity, inventory levels, vendors, and channel performance, businesses can make more informed replenishment decisions, avoid overbuying, and test new product lines or vendor-supplied inventory without taking on unnecessary risk.
“You have to have unified inventory to know how to price your products just at that basic level. I can’t price my products if I don’t know the true cost to get it.”
— Mike Bernico, Flxpoint
How does better inventory data help me make smarter buying decisions?
It lets you measure whether your plan is working before you commit more capital. A key question becomes: “Did my plan work? Am I overleveraged in one place or another?” Centralized systems can also help businesses test new product lines or vendor relationships by looking at sales velocity by channel, allowing them to take risks in a calculated and measured way.
Intelligent Order Routing Turns Inventory Complexity Into Automation
Once inventory and supplier data are reliable, businesses can automate fulfillment decisions. Orders can be routed based on cost, speed, margin, location, warehouse priority, vendor fallback, split-shipment rules, or customer expectations. This helps hybrid fulfillment scale because every order does not need a manual review.
How do I decide the best way to fulfill each order?
There is no single answer, which is why order routing needs to account for the context of each order. Intelligent order routing is not just sending an order to someone who has stock; it is taking each and every order and treating it like its own unique use case. Depending on the order, the business may prioritize speed, margin, an internal warehouse, vendor fallback, or preventing split shipments.
Supplier Inventory Sync Extends Inventory Beyond the Four Walls
For hybrid fulfillment to work, supplier inventory needs to become part of the operating model. Supplier sync does not always require advanced technology; it can happen through automated files, FTP, email, APIs, EDI, or ecommerce storefront integrations. The key is replacing manual updates with automated, reliable supplier data.
Can supplier inventory really be treated like part of my own inventory?
Yes, but the goal is not necessarily to force every supplier into a complex integration. Real-time supplier sync can be defined as any way to get an automated update from a supplier, such as Google Sheets, email, FTP, API, EDI, or ecommerce storefront connections. The key is that accurate supplier stock is foundational. If you don’t have an accurate view of what is in stock with your suppliers, you cannot tell your sales channel accurately what’s available.
Exception-Based Workflows Keep Humans Focused Where They Matter
Automation does not remove people from the process. Mature operations let technology handle the routine majority while humans focus on exceptions, such as high-value orders, fraud risk, compliance requirements, restricted products, export rules, or unusual fulfillment scenarios.
If my business has special cases, can automation still work?
Yes. The point is not to automate every possible decision; it is to automate the routine work and surface the exceptions. Businesses should not have to look at every single order. Instead, technology can highlight high-value orders, risky locations, or compliance requirements. The goal is to take care of the 80% of workflows that are obvious while still allowing human review when specific exceptions arise.
The Right Inventory Technology Should Fit the Business, Not Overwhelm It
Software decisions should be based on business fit, not popularity, feature volume, or broad “all-in-one” promises. Growing ecommerce businesses should identify their highest-impact bottleneck, prioritize what matters now, and choose technology that is right-sized but flexible enough to support future phases of growth.
How should I choose software without overbuying or picking the wrong system?
Start with your priorities, not the biggest feature list. Avoid an all-in-one system that claims to “do everything under the sun” and look for a “best of breed approach” with systems that can scale as you add channels or vendors. The practical advice is to stack rank what matters now, make sure the system can support future phases, and choose technology that fits your business rather than overwhelming it.
How to Scale Ecommerce Operations Beyond Spreadsheets
For many growing ecommerce businesses, Finale and Flxpoint work together as a practical answer to these challenges. Finale helps centralize and manage internal inventory, purchasing, warehouse operations, and stock visibility, while Flxpoint helps connect vendor inventory, automate supplier sync, and route orders across hybrid fulfillment networks. Together, they give businesses a best-of-breed way to improve inventory accuracy, reduce spreadsheet work, and scale fulfillment without forcing every process into a one-size-fits-all system.
Ecommerce Fulfillment Operations FAQ
What Is Ecommerce Fulfillment Operations?
Ecommerce fulfillment operations are the processes that move an online order from purchase to delivery. This includes managing inventory, syncing product availability across channels, routing orders to the right warehouse, 3PL, supplier, or vendor, and making sure the customer receives the right product on time. As discussed in the webinar, fulfillment is no longer limited to “what’s in my warehouse these days”; growing businesses may rely on internal warehouses, 3PLs, marketplace fulfillment services, and supplier inventory at the same time.
What Are Ecommerce Fulfillment Operation Examples?
Examples of ecommerce fulfillment operations include updating inventory across Shopify, Amazon, Walmart, and other sales channels; allocating inventory to specific marketplaces; sending orders to an internal warehouse, 3PL, or vendor; syncing supplier inventory through files, APIs, EDI, email, or FTP; replenishing warehouse stock based on sales velocity; and flagging exceptions such as high-value orders, compliance requirements, or restricted products. In the webinar, the speakers also discussed hybrid fulfillment examples where a business may fulfill some products from its own warehouse and use vendors as a fallback or extension of available inventory.
How Can I Track My Inventory at an Ecommerce Fulfillment Center?
The best way to track inventory at an ecommerce fulfillment center is to create a unified inventory view that shows what is available, where it is located, and how that inventory connects to each sales channel. That means tracking inventory across internal warehouses, fulfillment centers, 3PLs, marketplace fulfillment programs, and supplier locations instead of relying on disconnected spreadsheets. The webinar emphasized that businesses need to “accurately represent” what they have and know where it is located so they can get products to customers quickly.
How Can I Connect My Inventory to My Supplier?
You can connect supplier inventory through several methods, depending on what the supplier supports. The webinar discussed low-tech and advanced options, including automated Excel or CSV files, Google Sheets, email updates, FTP servers, APIs, EDI, and direct connections to ecommerce storefronts such as Shopify, BigCommerce, or Magento. The key is to ask suppliers how they share inventory today, then use a system that can automate that data flow instead of manually copying supplier inventory into spreadsheets.
What Is Ecommerce Order Routing?
Ecommerce order routing is the process of deciding where an order is fulfilled from after a customer buys. In a simple operation, every order may go to one warehouse. In a more complex or hybrid fulfillment model, the best fulfillment source may depend on inventory availability, shipping speed, cost, margin, customer location, warehouse priority, vendor fallback rules, or whether the order should be split. The webinar described intelligent order routing as treating each order like its own use case, so businesses can automate the best fulfillment decision without manually reviewing every order.
