Out-of-stock situations, dead stock, and endless shuffling in Excel: these are the daily frustrations of many webshop owners. Getting a grip on your inventory often seems like a matter of working harder, but it is primarily about the right processes and tools. In this article, you will find concrete webshop inventory management tips that you can apply immediately, from basic principles to KPIs that really matter.
Why inventory management is so difficult for webshops
Inventory management for an online store is fundamentally different from that for a physical store. You often sell through multiple channels simultaneously, demand fluctuates due to seasons and promotions, and your customer expects a product to be available the moment they click “order”.
Demand forecasting is therefore uncertain. A TikTok trend, a promotional week, or simply the start of summer can double or halve demand for a product within days. Those who order based solely on intuition will be disappointed sooner or later.
Adding to this is the fact that selling through multiple channel points—such as your own webshop, Bol.com, Amazon, and perhaps a physical store—makes synchronization complex. If your inventory is not updated in real time across all those channels, you are selling products that are no longer available.
The hidden costs of poor inventory management
The direct costs of faulty inventory management are visible: a lost sale generates no revenue. But the hidden costs are often greater. Consider:
- Additional storage costs for slow-selling inventory taking up space.
- Time your team spends on manual counting and correcting
- Reputational damage when customers cancel an order because a product turns out to be unavailable
- Forced discounts to get rid of dead stock
Common mistakes for growing webshops
Growing webshops often run into the same pitfalls. They continue working with Excel spreadsheets maintained by a single person, meaning there is no real-time insight as volume increases. Furthermore, inventory is often still updated manually after every sale, instead of being linked to a system. This leads to outdated figures, duplicate entries, and ultimately to overselling or missed orders.
Basic principles of good inventory management for your webshop
Before you get started with tips and tools, it is important to have a clear understanding of a number of basic concepts.
There is a difference between physical stock (what is actually on the shelf), available stock (what you can still sell), and reserved stock (products that have already been ordered but have not yet been shipped). Many inventory problems arise because webshops use these three terms interchangeably.
In addition, a fixed counting rhythm is indispensable. Cyclical counting, in which you count a portion of your assortment at fixed times, provides insight much faster than a full annual inventory. With the latter, discrepancies are sometimes only discovered after months.
Additionally, work with minimum and maximum stock levels per SKU. This way, you know exactly when to reorder and avoid tying up too much capital in excess inventory.
What is ABC analysis and how do you apply it?
The ABC analysis divides your assortment into three groups based on revenue contribution:
| Categories | Share in SKUs | Share of revenue | Method |
|---|---|---|---|
| A | Up to 20% | Up to 80% | Count weekly, monitor closely |
| B | Up to 30% | Up to 15% | Count monthly |
| C | Up to 50% | Up to 5% | Quarterly or annual check-up |
With this classification, you prevent spending as much time on a slow-moving book as on your bestseller.
Tip: Start the ABC analysis simply with your sales data from the past 12 months. You don't need to set up a complicated model; an export from your sales system and sorting by revenue is sufficient.
Calculating safety stock: a simple rule of thumb
A simple rule of thumb for your safety stock is:
Safety stock = (maximum daily sales x maximum lead time) − (average daily sales x average lead time)
This is not an exact science, but it gives you a realistic buffer against peaks in demand or delays at your supplier.
Practical inventory management tips for daily operations
The basic principles are the theory, but the real difference lies in the daily execution.
Work with fixed picking locations and clear SKU labeling. If employees constantly have to search for where a product is located, it not only wastes time but also leads to errors during counting and picking.
Perform weekly cycle counts on your top 20% bestsellers (your A-products from the ABC analysis). This prevents you from missing your most popular products because you only count annually.
Set up automatic reorder points with your suppliers so that orders are placed as soon as your stock drops below a predetermined level. Additionally, link your inventory management directly to your sales channels so that every sale automatically updates your stock instead of someone having to do this manually.
Finally, always take your suppliers' lead time into account when ordering. A supplier who needs six weeks requires a very different schedule than a supplier who delivers within three days.
Cycle counting: how often and how do you do it properly?
A practical schedule for cycle counting:
- Count A-products weekly
- Count B-products monthly
- Count C products quarterly
- Document discrepancies immediately and investigate the cause (incorrectly picked, theft, incorrect entry).
- Adjust your system immediately, do not wait until the next counting round.
Calculate reorder point based on lead time and sales velocity
You calculate the reorder point with a simple formula:
Reorder point = (average daily sales x lead time in days) + safety stock
For example, if you sell an average of 10 units of a product per day, and your supplier has a lead time of 14 days, you place a new order as soon as your stock reaches around 140 units (plus your safety margin).
Inventory management during peak periods and seasons
Peak moments such as Black Friday, Sinterklaas, or the start of the summer sales require a different approach than your regular inventory management.
Plan ahead using historical sales data from last year. What were your bestsellers during the previous peak, and how much faster did you sell then compared to an average week? Based on that, build up buffer stock in a timely manner, not just a week in advance.
Communicate proactively with your suppliers regarding expected volumes. Many suppliers also experience peak demand themselves and want to know well in advance what you expect to order.
Warning: do not wait until the week before Black Friday to order extra stock. Many suppliers already have sold-out batches or longer delivery times by then due to the high volume of orders.
Monitor daily rather than weekly during peak periods. Sales speeds can vary significantly from day to day during such periods, and you want to be able to adjust in time if a product sells out faster than expected.
Plan inventory for Black Friday and other peak times
A practical step-by-step plan:
- Analyze sales data from the same period last year
- Determine the expected uplift in sales per SKU
- Order buffer stock at least 6 to 8 weeks in advance
- Coordinate delivery times with suppliers
- Set up daily monitoring during the action period itself
Inventory management for multi-channel sales
If you sell through multiple channels, the risk of overselling is real. If your inventory is not synchronized in real time between your webshop, marketplaces, and potentially a physical store, you are selling products that are no longer available. This leads to canceled orders and dissatisfied customers.
The solution is to work with one central inventory source, also known as a single source of truth. From this single point, your inventory is passed on to all channels, instead of each channel maintaining its own separate records.
Additionally, distribute your inventory smartly across channels based on sales performance. A product that sells particularly well on a marketplace deserves more inventory space there than on a channel where it barely moves.
How do you prevent overselling on marketplaces?
Tip: Set a small safety margin on each channel (for example, 5-10% of your inventory) that is not visible to sales. This prevents a timing discrepancy between synchronizations from immediately leading to a lost sale.
Also pay attention to differences in fulfillment between marketplaces and your own webshop. Some marketplaces require you to use their own fulfillment service, which means that part of your inventory is physically located somewhere other than in your own warehouse.
The role of software in inventory management
At some point, every growing webshop runs up against the limitations of Excel. Signs that you are ready for a system include: inaccurate inventory figures, employees overwriting each other's work, and increasingly more time spent on manual checks instead of sales.
A warehouse management system adds real-time insight, automates synchronization between channels, and significantly reduces manual work. Instead of someone manually updating an Excel sheet after every sale, your inventory is adjusted automatically and in real time across all your sales channels.
Lyra WMS is an example of a system that centralizes inventory across channels, so you are no longer dependent on separate spreadsheets or manual connections. You can find more about the possibilities on the Lyra WMS features page.
Excel versus a WMS: when to switch?
| Context | Excel suffices | WMS is needed |
|---|---|---|
| Number of orders per day | Less than 20 | More than 20-50 |
| Number of sales channels | 1 | 2 or more |
| Number of SKUs | Less than 100 | More than 100 |
| Team that manages inventory | 1 person | Multiple people |
Checklist for choosing inventory management software
When choosing inventory software, pay attention to:
- Real-time integration with all your sales channels
- Support for cyclic counting and barcode scanning
- Automatic reorder points and notifications
- Insight into KPIs such as inventory turnover and fill rate
- Scalability as your assortment and order volume grow
Inventory Management KPIs You Need to Track
Without the right figures, you are steering blindly. These KPIs provide immediate insight into the health of your inventory management.
The most important inventory KPIs at a glance
Inventory turnover shows how often your inventory is sold and replenished within a specific period. You calculate this by dividing the cost of goods sold by the average inventory value. A low turnover indicates overstock, while a turnover that is too high may indicate insufficient buffer.
Fill rate indicates what percentage of orders could be delivered directly from stock. A fill rate below 95% is often a signal that you have to turn away customers too often.
The dead stock percentage shows what portion of your inventory has not been sold for a long time. This helps you identify obsolete stock in a timely manner and take action, for example through a promotion or markdown.
The lost sales percentage is a direct measure of lost revenue: the percentage of orders that could not be delivered due to insufficient stock.
Frequently asked questions
What is the difference between inventory management and warehouse management?
Inventory management focuses specifically on the quantities and availability of products: how much you have in stock, what is available for sale, and when you need to reorder. Warehouse management encompasses the broader process within the warehouse, such as receiving goods, storage locations, picking, packing, and shipping. Therefore, inventory management is a part of warehouse management, but not the same thing.
How much stock should I keep as an online shop?
This depends on your sales velocity, your suppliers' lead time, and the service level you want to offer. A simple formula to start with is: safety stock = (maximum daily sales x maximum lead time) minus (average daily sales x average lead time). This way, you build a buffer against unexpected peaks or delays without tying up unnecessary capital.
Which software is suitable for inventory management of a webshop?
That depends heavily on your order volume and the number of channels through which you sell. For a small number of orders and a single sales channel, a simple inventory module within your webshop platform may suffice. As soon as you serve multiple channels, process more than a few dozen orders per day, or work with multiple employees, a full-fledged WMS is usually the logical next step.
How do I prevent lost sales in my webshop?
The most important measures are real-time inventory insight across all your channels, clear reorder points per SKU, and a well-calculated safety stock. By having these three elements in order, you prevent selling out of stock or discovering too late that you need to reorder.
How often should I count my inventory?
This depends on the type of product. Cyclical counting, where you count your bestsellers weekly for example, provides insight into deviations much faster than a full annual inventory. For slow-selling products, a quarterly or annual check suffices, while ideally you should check fast-selling bestsellers weekly.
Would you like to know how to handle this in your warehouse? Schedule a no-obligation discovery call and we'll go through it together.
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