Inventory management is the work of knowing what you have, where it is, and when to order more. When it goes wrong, you either run out of products customers want or tie up cash in products nobody buys. For online sellers on several channels, it also decides whether you oversell.
Below are five common inventory management mistakes. For each one you'll find what goes wrong, how to fix it, and a short example with hypothetical numbers.
Mistake 1: Running inventory from a spreadsheet
A spreadsheet is fine when you have a few products and one store. Once you add channels, it becomes a copy of your stock that is always slightly out of date, because someone has to update it after every sale, return and delivery.
The fix: keep one live stock count that every channel reads from, and let sales, returns and deliveries update it automatically.
Example: you sell a lamp on Salla and noon. At 10:00 the sheet says 3 units. Two sell on Salla before lunch and one on noon at 13:00, but the sheet is only updated in the evening. If another noon order comes in at 15:00, you've sold a lamp you don't have.
Mistake 2: Updating each channel by hand
Even with an accurate count, typing it into every channel takes time and is easy to get wrong. A missed update on one channel is enough to oversell.
The fix: connect your channels so a sale on one updates the available quantity on all of them. Multi-channel tools such as SyncMe keep stock, orders and listings in sync across Salla, Zid, Shopify, noon, Amazon and other channels.
Example: you have 4 channels and 20 orders on a busy day. That's 20 sales, each needing 3 updates on the other channels, or 60 manual edits. Getting even one of them late is enough for an oversell.
Mistake 3: No reorder point
Without a clear trigger to reorder, you notice low stock when it's already too late, and the product is out of stock while you wait for the supplier.
The fix: set a reorder point for each important product. When stock drops to that level, you reorder.
The reorder point formula
| Term | Meaning |
|---|---|
| Average daily sales | How many units you sell on a normal day |
| Lead time | Days between placing an order and having the stock ready to sell |
| Safety stock | Extra units that cover busier days or a late delivery |
| Reorder point | (Average daily sales x Lead time) + Safety stock |
Example: a product sells 8 units a day on average across all channels, and your supplier takes 10 days. Demand during lead time is 8 x 10 = 80 units. With a safety stock of 30 units, your reorder point is 80 + 30 = 110. When stock falls to 110, you place the order.
Mistake 4: No safety stock
If your reorder point only covers average demand, any busier week or late delivery empties your shelves. Safety stock is the cushion that absorbs those surprises.
The fix: calculate safety stock from your own sales and supplier history. A simple, common formula is:
| Term | Meaning |
|---|---|
| Maximum daily sales | Your highest normal daily sales, ignoring one-off events |
| Maximum lead time | The longest your supplier has taken to deliver |
| Safety stock | (Maximum daily sales x Maximum lead time) - (Average daily sales x Average lead time) |
Example: the same product sells up to 11 units on busy days, and the supplier has taken up to 12 days. Safety stock is (11 x 12) - (8 x 10) = 132 - 80 = 52 units. Your reorder point becomes 80 + 52 = 132.
Safety stock in your warehouse is different from the small buffer you hold back from your channels to avoid overselling. You can use both. Our guide to preventing overselling covers the channel buffer.
Mistake 5: Ignoring slow-moving and dead stock
Products that don't sell take up space and money you could use for products that do. Because they are never urgent, they are easy to ignore.
The fix: review your products regularly by how long it has been since they last sold, and decide what to do with the slow ones: bundle them, promote them, or stop reordering them.
Example: you have 60 units of a phone case that hasn't sold in 3 months. Instead of reordering other colors, you bundle it with a best-selling charger and list the bundle on all channels.
Quick checklist
Related guides
FAQ
What is inventory management?
Inventory management means knowing what stock you have, where it is, and when to order more, so you don't run out of products customers want or hold too much of products that don't sell.
How do I calculate a reorder point?
Multiply your average daily sales by your supplier's lead time in days, then add your safety stock. When stock drops to that number, place a new order.
What is safety stock?
Safety stock is extra stock that covers busier days or late deliveries. A common formula is (maximum daily sales x maximum lead time) minus (average daily sales x average lead time).
Is a spreadsheet enough for inventory management?
It can work for a few products on one channel. With several channels, a spreadsheet is always a little out of date, which leads to stock errors and overselling.
How often should I review slow-moving stock?
Regularly, for example every month or quarter. Sort products by the date they last sold and decide what to do with those that haven't moved.
What is the difference between safety stock and an overselling buffer?
Safety stock is extra stock in your warehouse so you don't run out before a delivery arrives. An overselling buffer is a few units you don't show on your channels so a small delay doesn't cause a cancelled order.
