What is Inventory Management Software?
An inventory management system tracks the goods you sell from end-to-end in your supply chain. That means tracking from purchasing all the way to the point where a product reaches a customer.
Good inventory management software gives you a 360° view of that whole supply chain. Its functionality lets you see what stock you currently hold, what you have on sales order from your suppliers (or what is due to be produced if you have your own manufacturing base), and it lets you plan ahead according to the sales forecasts you have made.
It ensures you hold enough stock to cover what you expect to be sold in a given time period without carrying too much of an item that may take up costly warehouse space. Good software reduces or eliminates the chances of human error, and with integration to other systems (such as accounting software or POS—point of sale), it streamlines your workflow and increases efficiency.
Best Inventory Management Software for Ecommerce Store – BrightPearl
If you’re a fast scaling e-commerce & multichannel merchant then you need a software that can scale with your growth and won’t hold you back. Below is our top option for you.
The beauty of Brightpearl is that it is purely designed for e-commerce, multichannel retail and wholesale brands. This means the system is packed with dedicated features without unnecessary functionality encumbering your operations. It has robust inventory management functionality coupled with powerful inventory demand planning, ensuring real-time multichannel inventory updates and accurate demand forecasting. And it goes beyond a simple inventory management software. It’s a Retail Operating System that streamlines and automates all the core post-purchase operations from inventory and order management to logistics and accounting. It also offers hyper connectivity that allows you to curate a changing roster of leading-edge tools through its Plug & Play integrations, certified partner network and fast, open API, freeing you up to grow fearlessly.
Here are the 3 game-changing features that Brightpearl offers to bring your inventory management to the next level.
- Rules-based Automation Engine that allows you to create automation rules in a few clicks to fit your own needs. It automates all the critical but laborious tasks, including multichannel order processing, multi-location inventory allocation, partial fulfillment, dropshipping, order splitting, invoicing and more. So you don’t need to worry about growing order volumes. Brightpearl customers save 2 months a year on average.
- IntegratedInventory Planner Premium that gives you data-driven replenishment recommendations. It automates the demand forecasting based on your historical sales data, factoring in the seasonality, out of stock periods and promotions for optimized accuracy. So you can say no to time-consuming and error-prone manual forecasting in spreadsheets.
- Advanced reporting and business intelligence that gives you a 360-degree view of your business. Easily report on your sales channels, products, customers, suppliers as well as your marketing campaigns to gain a true understanding of your business performance.
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5 Best Online Inventory Management Software for Small Businesses
If you’re a smaller business with limited growth then the below 5 options are likely to fit your requirements.
Fishbowl calls itself the number one QuickBooks solution and may be ideal for manufacturing and warehousing businesses. It easily integrates with a number of leading business solutions and systems such as Amazon, QuickBooks, Salesforce, and others. You can not only track inventory with ease, but it monitors expiration dates to assist with stock rotation and avoid wastage.
Where you have fast moving stock, it’s simple to set up automatic reordering and tracking, so that you avoid both over and understocking items. Fishbowl makes it easy to organize complicated manufacturing tasks that cover every stage. It also recognizes that business needs can be very diverse, so makes it easy to customize fields so the software fits your business.
While Fishbowl has its positives, it does come with some drawbacks that may make you consider Brightpearl instead. The Fishbowl app runs on your own servers (compared to Brightpearl being cloud-based) so you will be responsible for maintaining the backend. It also has a rather clunky interface and reporting options are limited.
Veeqo is an e-commerce management platform designed by an e-commerce seller who found other solutions either too complicated or too basic for his needs. It offers seamless integration with a variety of marketplaces as well as shippers and common e-commerce tools. It lets you optimize your fulfilment needs while offering easy to analyze reports.
Some of the main features offered by Veeqo include advanced inventory management and tracking across more than 17 channels and any of your locations, as well as a dynamic forecasting system so you can avoid over and understock scenarios. It offers advanced automation solutions and can optimize your warehousing.
There are a few major disadvantages with Veeqo, however. As you would expect from a relatively new product, there are some technical issues at times, and their DevOps team is not very good at communications or resolving those problems. Another hurdle, and one you do not have with Brightpearl, is that you need to manually link products and supplier codes, something that businesses with multiple SKUs will shy away from. Finally, Veeqo doesn’t integrate with major accounting solutions like Xero and QuickBooks.
Linnworks focuses on reducing costs and bolstering profits by automating all essential processes so that businesses can scale quickly. Some of the main features include inventory management and order fulfillment for e-commerce businesses with integrations to Amazon & eBay.
Unfortunately users report experiencing downtime at peak periods along with clunky workflows that result in even longer processes than if they were completely manual.
Customers of Linnworks have also reported huge price hikes with no notice leading to unexpected cost increases. These downsides lead to only 18% of users recommending the software.
4. QuickBooks Commerce (previously Tradegecko)
Tradegecko (QuickBooks Commerce standalone product) is currently undergoing sunsetting outside the US, and they stopped accepting new customers on June 9th, 2021. The system will be fully retired in June, 2022 outside US and merge into QuickBooks offering in the US. Tradegecko offers a cloud-based platform that sits at the heart of business workflows. It can cover multiple locations and can integrate with systems like CRMs.
Unlike Brightpearl, Tradegecko struggles with more complex options such as back order management and dropshipping. With e-commerce a 24/7 global market, you may need support at any time of day (or night) and Tradegecko only offers that level of support to its Pro level customers, whereas Brightpearl offers it to everyone.
Another, crucial area where Tradegecko falls short is in its analytics capability. To operate at peak efficiency, you need a complete set of analytics and insights, so you can make informed strategic decisions. You get a full picture of every piece of data you need with Brightpearl while Tradegecko lacks that overview in some areas.
Ordoro acts as a centralized hub for all your inventory needs and you can integrate different channels into the app, including suppliers and marketplaces. With Ordoro, you can fulfil orders via Amazon or choose a third party dropshipper. The app lets you integrate multiple warehouse or storage locations no matter how big or how small.
Compared to Brightpearl, Ordoro is more suited to smaller businesses while Brightpearl is a more comprehensive solution for e-commerce retailers of any size, and especially those looking to scale. Ordoro also lacks some features that many online businesses may see as crucial, including CRM, and online payment integrations such as PayPal or Stripe.
Another major advantage Brightpearl has over Ordoro is that it offers a wider range of high-performance Plug & Play integrations and a fast, open API so you can slot any new tools into your tech stack quickly. Ordoro also lacks that 360° visibility that many businesses view as essential, especially if your business is fast moving and fast growing. Brightpearl offers a more flexible pricing system that is designed to adapt to your business growth.
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What does Inventory Management Software do?
Inventory management is all about what you need to sell your products. Whether buying from manufacturers, distributors, or suppliers, every retailer must ensure it has the product that it needs to sell to customers.
Inventory management ensures that a retail business never runs out of inventory. The best inventory management software will track inventory levels, orders, sales, and deliveries, while ensuring that all stock is at the right levels, in the right place, at the right time – and for the right cost.
Efficient inventory management software also helps you fulfil any orders more quickly while helping to forecast what your inventory needs will be in the future. It’s also an essential part of any plans to scale and expand your business as you become more successful.
Core Functions of Advanced Inventory Management Software
So, what are the core functions that a good inventory management software solution should have?
- Better stock control
Both under and overstocking can cause real problems. If you understock a product, then customers will be unhappy if they cannot buy it when they want. If you overstock, then you may be paying costly warehousing charges for stock that moves slowly. A good solution not only lets you track stock levels closely, you can set up automatic re-ordering when stock drops to a certain level.
- Easier management of inventory
You do not only gain more efficient control of your inventory, the process is also easier, which can lead to significant time and cost savings. It also helps automate your overall business processes and aids you in making informed decisions.
- Logistics planning
A good solution can identify patterns and allow you to plan on opening new warehouses closer to clusters of orders and to improve shipping routes.
You can’t make informed decisions without good data, and good inventory management software will deliver that in droves with easy to understand reports that give you a clear view of what is happening at every point of your supply chain, from ordering from suppliers to delivering to consumers or receiving returns.
One of the most important features. A good solution can keep track of unlimited SKUs so you know where your products are, and when they are expected to arrive at warehouses or other locations.
- Increased efficiency and productivity
By automating your inventory management and all those repetitive daily tasks you currently do manually, you can focus on other areas where you can improve and grow your business. A good solution will save you thousands of hours of manpower and can take over responsibility for tasks such as label printing, updating your system, and order fulfillment.
- Flexible solution
Your ideal solution will offer you multiple services, from managing work orders to managing listings and shippings. With added integrations, you should end up with an extremely streamlined workflow.
Benefits of Inventory Management Software
You now know most of the functions you should expect from a good solution, but what are the actual tangible benefits?
- Higher productivity rate
With a more streamlined workflow, more is getting done in less time, and that’s true across every aspect of your supply chain, including the processing of orders and tracking inventory. You can do everything from checking stock amounts to identifying big sellers, and also connect easily to different payment apps.
- Higher profits
With that streamlined workflow and more detailed insights, it’s now easier to make forecasts based on what stock sells well and what performs poorly. More accurate forecasts on supply and demand means bigger profit margins.
- Better processing
An efficient inventory management software solution saves you time by tracking all your stock so that you always know the status of any product. With automated re-ordering processes, you should never face understocking or overstocking again.
- Track dates
With more detailed overviews of your inventory, you can easily identify what is old stock and, more importantly, what stock is coming close to any expiry date. This can avoid wastage in the case of perishable products which in turn would cost you money.
Advanced softwares will have automation for many of the repetitive manual tasks, reducing the likelihood of human error and boosting efficiency. It also frees up your staff’s time to focus on other tasks.
- Improved CX
By controlling your stock better, you are helping to ensure that customers get products when they want them (or are advised that they will be available within a precise timeframe). Happier customers means more loyal customers which means increased CLV (customer lifetime value).
- Expense tracking
Good solutions are not only about tracking the actual products, but also about tracking all associated expenses including shipping costs, taxes, sales, and value of current stock. This makes it easier for your accounting department to produce detailed financial reports and forecasts.
When Will You Need Inventory Management Software?
You may be asking yourself: “Do I really need an inventory management solution?” If you answer “yes” to most or all of the following questions, then the answer is that you do.
- Do you experience frequent stock-outs?
Stock-outs can be bad for business, especially if you’re a smaller online retailer with a limited range of products. It’s not only a case of losing a sale, being unable to provide customers with what they need can damage the reputation of your brand.
- Do you find managing orders difficult?
You want to maintain good customer experience, that can involve frequent updates to customers to let them know what is happening with their order. If you’re scaling your business rapidly, and especially if you’re selling on multiple platforms like Amazon, eBay, and Etsy, as well as through your own site, this becomes more and more of a time-consuming task.
- Is manual stocktaking using up a lot of your staff’s time?
If you’re trying to manage your inventory manually, it can take up a lot of time; time that could be better spent on other tasks. Manual stocktaking is not only time consuming, it is very prone to human error.
- Is your inventory management getting complicated?
If you’re a startup or a fairly small e-commerce business, then basic spreadsheets such as Excel may suffice for your needs at that point. If, however, you’re scaling your business up and adding more products, multi-channel inventory management becomes more complex and you will find it harder to keep track of inventory and other factors.
- Do you have too much info in different places?
If your business is growing, you may have multiple datasets stored in different programs or in different files. That means you can never get a clear overview of what exactly is going on in your business, unlike the ability you would have with a single dashboard from a good inventory management system.
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Industries That Need Inventory Management Software
Using an inventory management solution is not only about the size of your business, but also the type.
This was always going to be top of the list. But there are also significant differences between online retailing and other industries that can benefit from a good inventory management solution. Outside of the e-commerce giants like Amazon, many e-commerce vendors do not hold physical stock unless they also have a physical store and keep products on-premises.
Businesses will often use third-party providers for both warehousing and dropshipping. It may even be the case that they are so small that they keep products at home (for example, in their garage or shed).
You also need to consider your marketplace. If you are offering your goods globally, then you need to consider fulfilling orders within a certain timeframe. With e-commerce, unless you are really (really) small, then inventory management software is an essential, especially if you plan to scale upwards at any point.
- Consumer goods
When it comes to companies selling household goods such as furniture, they face one especially major challenge when it comes to their inventory: Warehousing. As many of these items, such as wardrobes or sofas, are bulky, warehousing costs can be very high, so it is crucial to manage your inventory well.
They may also face additional seasonal fluctuations such as demand for garden furniture in the summer or for Christmas decorations at the end of the year. Ensuring there are the right levels of stock to meet regular weekly needs, as well as seasonal patterns, can mean huge differences in revenue and profit levels.
Even with less bulky goods, long range forecasting can be difficult as trends and tastes can change overnight. Utilizing inventory management software can help maintain that balance needed between sufficient stock and too much or too little.
Where the issue with consumer goods is often the size of the items, the problem with inventory management in electronic goods often lies in the costs. These are often high value items and when a customer decides to make a purchase, they usually want it immediately. If a product is out of stock at that point, they may well go elsewhere.
This is the industry where overstocking or understocking could cost the company the most in financial terms. It is also an industry where a lot of innovation is seen, with either new products or upgrades of older ones. This makes all elements of inventory management even more important here.
A good solution will not only monitor current and planned inventory, it also helps you with financial management (crucial with high value items), location tracking of shipped orders (along with automated updating for the customer via a tracking app or automatically sent emails), CRM, and monitoring of market trends.
Each and every business that deals with food, from supermarkets to restaurants, needs an efficient inventory management system. The food industry is also perhaps unique in having several factors affecting that need.
As with other industries, managing your inventory is crucial to avoid understocking or overstocking. In a restaurant, running out of ingredients for popular dishes can lead to unsatisfied customers. And being overstocked on ingredients for dishes there is little call for means wastage and loss of money.
Another crucial reason for good inventory management in the food industry is the question of expiry dates on perishable food. Having too many items in stock past their use-by date is again going to lose you money or even worse, accidentally using expired ingredients could lead to health issues (food poisoning) for customers, which could end up costing you a lot more than the few dollars the item cost.
How to Choose The Best Inventory Management Software
So, you’ve read a lot of details of inventory management solutions and decided that now is the time for your business to invest in one. Great! How do you then move forward and choose the one that is best for you? There are a number of things you should be thinking about.
The first thing to do is to identify your primary and secondary needs. What tasks do you most want to transfer to a software solution? Of course, everything revolves around your inventory. After all, that inventory represents your most valuable assets and is what creates revenue. Therefore, any solution needs to offer you good inventory management and tracking options.
Once you have made a list (in order of priority) of your needs, you then need to look at what features each solution offers and how they relate to those needs. At this stage, it is also worth considering what integrations the solutions offer. You may look at one that offers almost everything you need, but lacks one feature: Then you see that you can integrate a tool that fulfils that need. Many solutions will offer multiple integrations with their product, so be sure to examine that section of their website carefully. Making sure those integrations are built/supported in-house can make sure that you don’t have issues down the line with faulty integrations and poor customer support.
7 Questions to Ask Inventory Management Software Providers
You have now reached the stage where you’ve waded through dozens of providers and have whittled your list down to a smaller number. At this point, you want more details, and part of that process is asking the providers specific questions. But which are the most vital to ask?
- Does your solution provide real-time monitoring?
Your business is not static, it is fluid and ever-changing. Having any changes to inventory levels and other factors updated in real time is crucial to your online store. If you sell five units of product A, you want that change in inventory updated instantly across every place you’re selling products.
- Will your solution operate across multiple locations?
If you’re a larger e-commerce business, you may well be operating several warehouses. You need a solution that not only tracks changes in real-time, but does it over every location. A good solution should allow you to see inventory both by location and as a total, allowing for any required transfers between warehouses.
- Does your solution allow me to utilize and digitize inventory controls?
You don’t just want inventory tracking, you want a solution that covers all areas of controlling your inventory. That can mean having the ability to set up automatic purchases and reorders as well as allowing for tools such as EDI (Electronic Data Interchange).
- How good is your solution’s forecasting abilities?
It doesn’t matter how you sell your products, forecasting demand is crucial for any business moving forwards. A solution that tracks and analyzes patterns of demand lets you plan ahead, especially taking seasonal fluctuations into account.
- What integrations does your product offer?
There are now countless tools on the market that assist with everything from CRM to payment processing. Finding a solution that offers multiple integrations with such tools not only helps improve your business now, it can also help when you choose to scale or expand.
- Does your software centralize the data it monitors and collects?
The last thing you want is to jump between tools and apps to see any relevant data. This can be particularly true for your customer service or support teams who want to be able to find the info they need in one place.
- Does your product help improve the customer journey?
Your customers should always be your priority. Good solutions help businesses help both themselves and their customers. Whether B2B or B2C, customers should have an accurate picture of the availability of products. It should also help with payment options such as sending and settling of invoices.
Features Comparison Among the Best Inventory Management Software
Depending on your business needs, there may be some specialized features you need. You can either investigate whether the provider offers them directly or research if you can integrate a tool to meet those needs. However, there are some common features you should be looking for as a minimum:
Integrations Comparison Among the Best Inventory Management Software
Software that offers multiple integrations can help you customize a solution when you have specialized needs, or can help you with different e-commerce providers. Always look at what prospective providers offer you.
Why Brightpearl is The Best Advanced Inventory Management Software
So why choose Brightpearl? There are numerous reasons why it should be your first choice for inventory management and much more. It’s a Retail Operating System that streamlines and automates inventory control and inventory demand planning, but goes beyond that.
Firstly, it’s specifically designed for retail, particularly e-commerce, and is omnichannel friendly. That’s unlike some enterprise resource planning (ERP) systems that can seem like a decent choice for inventory management but prove to be a nightmare in reality because it’s nearly impossible for ERPs to quickly deploy updates or connect to new apps without costly and lengthy customizations.
Secondly, with Brightpearl’s rules-based automation, you can save time to focus your attention on your growth strategies. And the real-time inventory insights and in-depth reporting means that you get instant insights into how your online store is performing and any issues are quickly identified.
Last but not least, Brightpearl also offers the best customer services on the market, including expert-led implementation and onboarding training, 24/7 support and ongoing business consulting. All services are carried out by friendly in-house experts who are true retail savvy.
In a nutshell, Brightpearl is the single source of truth for your business by bringing all your operations and data into 1 system. Everything is brought into a single easy-to-use platform.
The growth of e-commerce is inescapable. It’s forecast that online retail sales will reach $908.73 billion in 2021, and that is just in the US. If revenue does reach that level, that will be a 13.7% growth on 2020 sales. However, as the market grows, so does competitiveness, and a business that wants to keep an edge on their competitors needs to have the ideal box of tools.
As e-commerce itself grows, so does the use of automation in various areas of the sector. From segmenting your customer base for marketing purposes through personalizing the customer journey, and right up to automated order fulfilment, if you haven’t already implemented some automation strategies, it is time to seriously consider it.
Inventory management is perhaps the area where automation is most important. Both your products and your customers are the very lifeblood of your business, and bringing them together efficiently is key to your online store being successful. If a customer is unhappy with products being out of stock, they will simply look at another business to give their custom to.
Losing customers through stockouts or understocking does not just mean lost sales; it can be damaging to your brand’s reputation if people see you as being unable to provide what they want. While manual inventory management may work well for small businesses or startups, when that business begins to scale, then manual management becomes clunky and inefficient.
Choosing the right inventory management software to meet the needs of your business is a crucial decision. With such a wide range of features, the integrations you need, and automation that is unrivaled, Brightpearl is the ideal choice for any business operating in the e-commerce sector.
Knowing that many of your inventory-related processes are automated and efficiently operated by Brightpearl means that you have the confidence to focus on other areas of your business. Areas like looking at opportunities to expand and grow, adding new products or product ranges, and increasing your profits. Brightpearl can take your business to the next level.