If you’re running an e-commerce business, your products are the heart of your operation. You can’t fulfill orders without knowing what’s in stock. That’s where inventory tracking comes in.
With the Philippine e-commerce market projected to reach USD 75.59 billion by 2033, keeping track of your stock can make the difference between meeting customer demands and losing sales.
It’s not limited to counting boxes. It’s about keeping control. Knowing what you have, what’s selling, what’s running low, and what’s sitting too long.
If you’ve ever dealt with missing stock or overselling, you already know how damaging poor tracking can be. The good news is you don’t need to overcomplicate it. With the right steps and a few smart habits, you can keep your stock in order and your customers happy.
Read this blog to understand how to track inventory, what it means, and how it matters for your business. Let’s first understand what tracking inventory means.
What Is Inventory Tracking?
Inventory tracking is the process of knowing what’s in your stock, where it is, and how it’s moving. It involves monitoring stock levels, orders, sales, and deliveries.
It tells you which products are available to sell, which ones are stuck on shelves, and which ones need reordering. Accurate tracking ensures products are available when customers need them, preventing lost sales due to stockouts. It also helps you avoid mistakes like selling items you don’t have or letting your bestsellers run out.
Moreover, it helps avoid overstocking, which can tie up capital and increase storage costs. Notably, overstocking costs businesses approximately $1.1 trillion annually.
When done right, inventory tracking gives you a clear view of your supply chain. No guessing. No last-minute scrambles. If you’re still unsure why your business needs it, let’s take a deeper look at why it matters.
Why It Matters More Than You Think
Every sale you make relies on one thing: product availability. If you can’t deliver, customers won’t wait.
Without proper tracking, it’s easy to lose sight of what’s moving and what isn’t. You might tie up cash in slow-moving stock. Or worse, miss out on sales because you didn’t know you were running low.
It also affects returns, fulfillment, and customer trust. Additionally, in a market where 57% of Filipino internet users reported purchasing products or services online weekly as of the third quarter of 2023, maintaining optimal inventory levels is essential to meet consumer demand. Get it right, and you’ll have fewer delays, better planning, and fewer surprises.
Are you convinced to track your business’s inventory? Want to know where to start? Let’s look at the step-by-step process.
The Basic Steps You Should Follow
You don’t need a complex setup to get started. What you need is consistency. Tracking inventory might sound like something reserved for big retailers with massive warehouses, but it’s just as important for small and medium businesses. If you’re consistent with how you record, review, and respond to stock movement, you’ll stay in control even as you grow.
Here’s how to get your system in place:
1. Start with a Clean Inventory List
Build a list that includes all products with essential details such as SKU, product name, description, quantity, and storage location. Create a simple spreadsheet or use a basic inventory app.
Use clear categories. Make sure each product has a unique ID. Keep track of incoming and outgoing stock daily.
2. Set Reorder Points
Figure out the minimum number of each product you should always have in stock. Once you dip below that, it’s time to restock. This step helps you avoid two major problems: overordering and running out of bestsellers.
3. Use an Inventory Management System
You don’t have to invest in expensive software right away, but using digital tools can make life easier. Inventory partners like Inspire Solutions and apps like Zoho Inventory or TradeGecko (now QuickBooks Commerce) offer plans that are perfect for businesses just stepping up from spreadsheets. With partners like Inspire Solutions, you can get timely insights to optimize your stock.
4. Count Stock Regularly
Even if you use a system, things can go off track. Do routine physical counts to check if your actual stock matches your records. You can go full inventory once a month or do cycle counts. This means that you count a portion of your stock regularly without shutting everything down.
5. Label and Organize Everything
Clear labeling and consistent shelf placement reduce picking errors and save time. If you run a growing warehouse, barcode scanning can be a game-changer. Proper organization reduces retrieval times, minimizes errors, and supports efficient order fulfillment.
6. Train Your Team
It doesn’t matter how solid your system is if no one follows it. Make sure your team knows how to log inventory movements, identify issues, and flag stock problems early.
7. Optimise Warehouse Layout
Design the warehouse layout to minimize travel time and maximize space utilization. Place high-demand items in easily accessible locations and consider the use of vertical space to store products efficiently.
Once you’ve established the basic steps for inventory management, the next thing to consider is how you’ll actually track your stock. Let’s take a look at the most common methods and how each can work for your business.
Methods of Inventory Tracking
The way you track your inventory plays a big role in how reliable your numbers are and how easily you can spot a problem before it hits the customer.
Most businesses rely on two core methods. Each has its place, depending on your stage of the journey. Let’s take a look at both of these methods:
1. Manual Tracking
If you’re running a small operation or just starting out, you might still be using spreadsheets or written logs. This method keeps your costs low and gives you full control over how you record your stock. But it comes with risks.
Manual tracking often relies on memory and habits. One missed entry can throw off your entire count. Over time, these errors build up.
If you’re sticking with spreadsheets, make sure they’re structured. Your columns should include the item name, SKU, quantity on hand, reorder point, supplier, cost per unit, and selling price. Always update them as soon as stock moves. Don’t leave it for later.
Also, do frequent stock checks. Either weekly or monthly, depending on your sales volume. This helps catch errors before they grow into bigger problems.
2. Automated Systems
As your stock volume increases, manual tracking becomes harder to trust. This is where automation steps in.
Inventory management software does more than just count stock. It connects the dots across your sales channels, warehouse, and suppliers. When someone places an order, the system updates your inventory instantly. No more scrambling to check if you’re about to run out of your top-selling item.
The numbers back it up. Studies show that SMEs adopting IoT-integrated automated inventory systems report a 25% to 35% improvement in inventory accuracy and a 35% to 45% drop in stockout incidents.
Cloud-based systems are especially useful if you’re selling across multiple locations or platforms. You can see all your inventory in one place, on your phone, your laptop, wherever you need it.
Which method should you choose?
If you’re handling a small product range and low order volume, a manual system might work for now. But the moment you find yourself second-guessing your stock levels or spending too much time fixing errors, it’s worth switching.
Good tracking starts with a reliable system. Whether it’s a spreadsheet or software, what matters is accuracy and regular updates.
As your business grows, relying solely on manual methods may start to slow you down. This is where technology can step in to make things smoother.
How Tech Can Make Tracking Easier?
Using technology can make managing your inventory much easier. Cloud-based software lets you track inventory in real-time, cuts down on mistakes, and works well with other parts of your business. Let’s look at how you can use tech in inventory tracking in more detail:
1. Use Inventory Management Software
If you’re still using spreadsheets, you’re doing too much work. A good inventory system saves time by tracking stock, setting reorder points, and syncing everything across your sales channels. It also gives you alerts when items are low or overdue.
Whether you sell online, in-store, or both, one dashboard gives you the full picture.
2. Go Cloud-Based for Flexibility
Cloud platforms let you manage your inventory from anywhere. You can update stock, check deliveries, and approve orders from your phone. It also keeps your team in sync across locations.
3. Automate with Smart Devices
Automated systems using IoT sensors are changing how small and medium businesses handle stock. Real-world data shows:
These systems track your stock in real-time and can reorder items automatically. That means fewer mistakes, less manual work, and better stock control. Using these tools can make a real difference in how your business runs. Let’s take a look at the benefits of managing your inventory more efficiently.
Benefits of Efficient Inventory Management
If you’ve ever dealt with stockouts or piles of unsold items, you already know how inventory can quietly shape your business. Getting it right isn’t just about numbers. It affects your cash flow, customer experience, and even the mood in your warehouse.
1. Improved Customer Satisfaction
When you have what your customer wants, when they want it, you’re already ahead. Reliable inventory tracking means fewer awkward phone calls about delays and more repeat orders. You build trust without having to chase it. Customers remember how smooth the buying process felt, and that’s what brings them back.
2. Cost Savings
Too much stock? You’re paying for space, handling, and risk. Too little? You’re missing sales. Striking that balance cuts unnecessary costs. It keeps your inventory tight without making your shelves empty. You’re not stuck writing off expired products or discounting outdated stock.
3. Data-Driven Decisions
You can’t grow on guesswork. A clear view of your inventory gives you numbers that matter. What’s moving fast? What’s gathering dust? That information helps you decide what to order, when to mark things down, or when to push certain items in promotions.
While you can simplify tracking inventory with these steps and automation tools, it does not come easy. There are challenges involved. Let’s look at them.
Common Challenges to Watch Out For
The benefits sound great, but there’s a catch. Inventory tracking isn’t always smooth. If you’re trying to keep up with growing orders, supplier delays, or multiple selling channels, it can feel like a full-time job on its own.
1. Multichannel Complexity
Selling across different platforms means your stock can get out of sync quickly. One channel says you’ve got ten units left, the other thinks it’s three. That’s where mistakes start. To keep it together, your system needs to reflect every sale and return in real-time. Otherwise, you end up selling what you no longer have or ordering more than you need.
2. Resource Intensive
Putting the right system in place takes effort. It’s not just about buying software. Your team needs time to learn it. You need to make sure the data going in is accurate. That setup phase can slow things down at first. But without it, your tracking stays patchy and frustrating.
To tackle these challenges, it’s important to take a step-by-step approach. Here are a few practical tips to help you stay on top of your inventory.
Tips to Stay on Top of Your Inventory
Fixing your tracking doesn’t mean flipping everything overnight. It’s more about making steady changes that actually stick. Start with what you already have. Build from there.
1. Choose the Right Tools
Pick a system that works for your current size and setup. You don’t need something complicated if your business is still growing. But it should have room to grow with you. Make sure it works well with the platforms you already use, whether that’s your online shop, your accounting software, or your order fulfillment process.
2. Train Your Team
Even the best system won’t help if no one knows how to use it properly. Everyone who handles stock needs to understand how the tracking works. And more importantly, why it matters. That way, they’re not just clicking buttons. They’re helping keep your inventory clean and accurate.
3. Analyse Inventory Data
Check your numbers regularly, not just when there’s a problem. You’ll start spotting patterns, what’s selling fast, what’s being returned, and what’s been sitting too long. That kind of insight gives you the chance to make changes before things go sideways. You don’t need perfect data. You just need data that helps you decide what to do next.
Final Thoughts
Tracking inventory might seem like a back-office task. But it drives almost every part of your business. It helps you avoid missed sales, late deliveries, and overspending on stock you don’t need. It also makes your business easier to scale.
As you keep building your e-commerce journey, you’ll soon realize just how much the right supply chain management can make a difference.
Ready to take your inventory management to the next level? Inspire Solutions offers an integrated ecosystem of services, including warehousing and fulfillment, drop shipping, and AI-powered customer service tools like InspireBots, all designed to help you scale your e-commerce business effortlessly.
Get in touch with us today for a free consultation on how we can help you enhance your inventory management, streamline your supply chain, and empower your business to thrive in a competitive market. Whether you’re just starting out or looking to optimize your operations, we have the tools and expertise to support your growth.
Reach out today and explore our services to see how Inspire Solutions can make a difference for your e-commerce business.
