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How to manage inventory balance in online retail?

Sep 24, 2025

Effective inventory management is a cornerstone of e-commerce success, as it directly impacts customer experience, cash flow, and profitability. Up-to-date inventory ensures customers receive their orders within the promised timeframe, strengthening trust and customer loyalty.

Finnish online retailers face several challenges in inventory management. One of the biggest is multi-channel sales – products are often sold not only through the online store but also in brick-and-mortar stores, marketplaces, or on social media platforms. Without an efficient system, inventory levels are not updated in real-time across all channels, which can lead to double-bookings or lost sales.

Another significant challenge is seasonal fluctuations and their prediction. In the Finnish market, seasonal variations are considerable, and without accurate historical data and advanced forecasting models, inventory levels may become too low or unnecessarily high.

Poor inventory management also impacts cash flow. Excess inventory ties up capital, while insufficient inventory leads to lost sales. Finding the right balance is critical, especially for e-commerce businesses in their growth phase.

How to automate inventory balance updates across multiple sales channels?

Automatic inventory updates across different sales channels are best achieved using a centralized inventory management system. Such a system synchronizes inventory data in real-time across all sales channels, preventing double-bookings and ensuring up-to-date availability information for customers.

Online stores operating on the Shopify platform benefit from numerous ready-made integration options. Shopify's own inventory system updates automatically when orders are placed directly through the online store. To integrate other channels, such as marketplaces or social media shops, applications like Stocky, Katana, or ERP systems can be used.

The most significant benefits of automation are:

  • Reduction in errors as manual work is eliminated.
  • Real-time stock status across all sales channels.
  • Freeing up human resources for more strategic tasks.
  • Automatic alerts when products are running low.

When implementing integration, it's best to first map out the sales channels in use and their specific requirements. After that, choose a system that supports all these channels and scales with business growth.

What tools are best suited for managing inventory in a smaller online store?

The most suitable inventory management tools for smaller online stores are cost-effective, easy to use, and scalable. It's often advisable to start with the online store platform's own inventory management features before investing in separate systems.

The Shopify platform has built-in features that are well-suited to the needs of small and medium-sized online stores:

  • Managing Products and Variants
  • Monitoring inventory levels and setting up alerts
  • Basic reports on sales and inventory value.
  • Barcode scanning with a mobile app (Shopify POS)

Finnish online retailers often prefer more affordable third-party applications such as Inventorya, which integrates seamlessly with Shopify. Other popular options include TradeGecko, Zoho Inventory, and Stock Sync, which offer slightly more advanced features at a reasonable price.

When choosing a tool, it's worth considering not only the current needs of the online store but also future growth plans. The system should scale as sales grow and support the addition of new sales channels without significant additional costs.

How to improve inventory management as e-commerce grows?

As e-commerce grows, developing warehouse management requires scalable solutions and process optimization. The first step is to move from reactive to proactive operations: forecasting, planning, and automation become central.

Suitable operating models for the needs of growing online commerce include:

  • Utilizing data and analytics in demand forecasting.
  • ABC analysis for classifying products based on their sales volume and profit margin.
  • Building just-in-time supply chains with suppliers.
  • Considered outsourcing for warehousing and logistics services.

At the system level, it's worth considering a move to more comprehensive solutions, such as ERP systems, which integrate warehouse management as part of overall business management. A popular alternative is also a WMS (Warehouse Management System), which focuses specifically on optimizing warehouse operations.

Key steps in improving warehouse management include standardizing processes, training personnel, and setting clear metrics. By monitoring key performance indicators such as inventory turnover, lead times, and stockouts, operations can be continuously improved and timely responses to changes can be made.

Finally, as e-commerce grows, it's crucial to ensure flexible inventory management and the ability to adapt to changing needs. The challenges of omnichannel and internationalization require the system to be versatile and reliable in all situations.

Brancoy toimitusjohtaja Samuli Ala-Kasari mustassa hupparissa.

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