Inventory Management Software

This buyer’s guide for inventory management software intends to provide users, business owners, inventory managers, and software enthusiasts a complete all-in-one information source for buying the best inventory management software.

It covers all the significant aspects that business owners must know thoroughly and consider before purchasing an inventory management solution for one’s business needs. This guide enlightens the readers to make an informed decision about their technological needs regarding inventory management, which is the most valuable business asset.

Businesses, big or small, that deal with inventory must find ways to track their inventory. It could be through a periodic inventory system or a perpetual inventory system.

Inventory management is vital because:

• It helps companies meet varying product demands that are sometimes more extensive and at other times smaller than expected.
• It helps prevent unexpected delays in the supply chain of products.
• It mitigates the issue of the mismatch between the rate of demand and the rate of supply.
• With inventory management techniques and calculations, businesses can improve inventory turnover and make sure that the right amount of inventory is available at all times.
• Inventory management prevents the halting of base operations due to worn-out machinery issues through decoupling techniques.
• Effective inventory management ensures that your customers, vendors, or suppliers do not need to bear the brunt of unnecessary delays.
• It also alerts companies to buy material when it is cheap and informs when about any expected price rise in the future.
• It saves time and companies’ costs as efficient inventory management leads to reduced work hours and backlogs.
• It helps avoid losses due to dead stocks.

Poor and ineffective inventory management leads to a series of negative impacts on the business. The damages range from losing potential clients and missed sales to money lost due to the tied-up capital and high warehousing costs. The adverse impact of these issues can affect the long-term sustainability of the business. Here are the most common problems related to inventory management that companies need to fix.

Inventory Management Problems Faced by Companies and E-Retailers

Mispick of items from warehouse

When bulk orders are received, most e-commerce companies suffer due to the wrong item getting picked from the warehouse.

Overstocking (unreasonably high inventory)

Sometimes miscalculation leads to unnecessarily high inventory stocks. It becomes challenging to manage the excess stocks, and the business suffers as there is no space for the new products in the warehouses.

Under stocking (unreasonably low inventory)

The same errors that cause companies to overstock can cause them to understock too. In this case, companies are not able to fulfill orders, ship due to products, deliver on time, or even commit in full capacity for the supply of their finished goods to customers.

Failure to track inventory properly in the warehouse

This issue crops up when the inventory is not appropriately placed in the warehouse. The organized warehouses are in a position to track their inventory quicker than the unorganized ones.

Failure to track inventory during the logistic process

Companies not using technologies such as RFID, GPS, barcodes, etc., often fail to track the exact position and location of their stocks during the logistics process.

Hassles on peak load days

When the demand for particular stocks is unusually high, maybe due to an event or hefty discount offered on that product that makes it attractive for buyers, the warehouse sees a rush that often creates chaos for the warehouse employees.

Backorders

Backorders are the worst issue that companies face when they run out of stocks, and a backorder log is created that causes an increase in distresses customer calls at the customer support center.

Dropshipping

For a dropshipping business, suppliers manage the inventory numbers. Companies still need to keep a record of the inventory that lies with each supplier. Accuracy in inventory records needs attention here.

Inventory Management Problems Faced by Customers

Delayed Shipments

Customers often complain that the items that were ordered by them did not reach them on time. The issues are mainly due to the poor handling of the inventory on the part of the vendor.

Complicated Return Process

Goods returned by customers are again part of the inventory. The return process for goods ordered and delivered once is a very complicated one, especially when businesses do not use any inventory tracking software to make things easy.

Receiving wrong items

Customers who order online often face this scenario. They end up receiving items they didn’t order. Wrong orders get delivered to them due to poor inventory control of the vendor.

Not being able to order

Technical glitches in the order process often frustrate the customer who is unable to order online due to technical glitches in the order form or other technical issues with the e-commerce portal.

Accuracy is the need of the hour for modern businesses. In manual inventory management, the scale at which they transit their inventory through various levels and locations becomes a severe challenge. Technical assistance is needed to enhance their inventory management capabilities and achieve improved supplier and customer relationships.

With reliable inventory system software, businesses save costs on redundant stocks, dead stocks, or excessive stocks as the inventory control software would prevent all these conditions from happening. It will increase productivity and decrease employee costs by saving time due to automation. The speed and accuracy of the whole inventory value chain will increase, storage costs will fall, and businesses will experience a rise in profits and operational performance.

Businesses leverage different inventory management techniques and systems according to their needs and pain-points. For example, businesses commonly leverage scannable barcodes or stock-keeping units (SKUs) for better inventory tracking system. The just-in-time technique by Toyota helps in inventory space conservation and ABC analysis used to enhance profitability through inventory categorization. Whatever be the way a business manages its inventory, the inventory tracking system can help find inaccuracies and inefficiencies in their models, processes, and the overall inventory system.

Inventory management or inventory control software is an application or software suite that assists organizations in ordering, managing, tracking, storing, organizing, optimizing, and selling their inventory, including raw material, in-process goods, and finished goods. It provides a central platform to manage and monitor inventory. Based on demand and supply data, it helps forecast the demand for stocks and generate reports.

Research suggests that the global inventory management software market size crossed USD 3 billion in 2019 and is expected to grow up to USD 5 billion by 2026, at a CAGR of over 5%. Organizations that were reluctant to switch from their legacy systems are now changing their policies. They are investing in the software to manage the complete inventory process. This transformation and the growing popularity and acceptance of eCommerce will be a game-changer for the inventory system software industry.

Effective inventory management can help solve numerous stock management problems that businesses routinely deal with to manage inventories. Below are some examples of effective inventory management in different sectors.

Examples of Efficient Inventory Management in Various Industries

Warehouse inventory management

A company shifts its warehouse to a place near the dockyard to significantly reduce the inventory transportation time and cost. The company also decides to elevate the warehouse (located in a flood-prone area) to save the inventory from constant flood conditions that lead to inventory spoilage.

Manufacturing inventory management

A manufacturing company lowers the production of a particular product after monitoring the analytics and reports generated by its manufacturing inventory software and finds that the product is not selling as much as its counterparts.

Ecommerce inventory management

Real estate inventory management

Retail inventory management

A software-based inventory tracking system can manage all the above. So, let’s see what the benefits of software inventory tools are.

Top Benefits of Inventory Management Software for Your Company

Automation

Inventory tracking software provides stock management process automation and eliminates human error in manual work when dealing with large volumes of data. Automation improves speed and efficiency and thus saves precious time for businesses.

Simplified repetitive tasks

Software-based inventory management makes the operations easy by managing the routine, repetitive tasks itself, and companies can pay more attention to complex tasks.

Inventory optimization

Inventory should neither be less nor in excess. Maintaining this right balance and ensuring that the right amount of stock is available when needed is called inventory optimization.

Quick and easy updates

With a software application to manage inventory, updates become quick and easy. Real-time updates help businesses make faster decisions on ordering stocks.

Efficiency and productivity

As an inventory management system saves process time, it enhances efficiency and productivity.

Reduce costs and enhanced profits

Simplified and efficient inventory management prevents delays and inventory wastage, thus reducing overall costs for the business. Streamlined operations support business growth and result in higher profits.

Forecasting to improve inventory turnover ratio

Better demand forecasting through inventory management application helps improve the inventory turnover ratio that directly impacts profit margins on sales.

Better customer service

Moreover, inventory software makes the inventory data instantly accessible and helps businesses provide quicker status updates to customers. Besides, faster order processing results in happy customers.

Every inventory system software offers different sets of features, but the must-have features are:

Real-time inventory synchronization

This feature allows real-time updates of all the inventory-related transactions. When the customer orders a product from your website, the software will update it in all necessary places in real-time. It helps in avoiding double-ordering of the same product. The software needs to synchronize with the logistics database so that any change in inventory location gets updated in all relevant records.

Automation of all e-commerce activities related to inventory

This feature provides time-based inbuilt and custom triggers that automatically take care of the order and shipment process. Various functions, such as splitting an order, confirmation, and follow-up emails to customers, order tags, etc., get automatically executed.

Warehouse management

Features for warehouse inventory control will optimize the inventory holding costs. Automated features will reduce the load on the warehouse. This feature provides low inventory alerts, import, and export product information, automated stock picking using the FIFO principle, and warehouse and inventory reports. It also allows users to add and manage more than one warehouse.

Integration with other platforms and web-based services

This software integrates with other popular channels such as Amazon and other cloud-based or web-based services.

Security and Backups

Inventory control software must provide a secure environment for all transactions. It must offer automated routine backup of data on the cloud that is accessible to users remotely.

Scalability

Most of the software is good to use unless they have to deal with multiple orders simultaneously. Software that can handle numerous orders on various channels and devices is required. So, as your business grows and your customer base grows, the software should also scale past its limits.

Accessible on all devices

Today businesses run 24*7. To catch up with the need of the hour, business people work on their desktops, laptops, tablets, or even mobile phones to deliver their customers a seamless experience. Inventory system software should be able to work on all devices, and it should have a mobile-friendly light version.

User-friendly

The software should be user-friendly, intuitive, and easy to navigate. It should not annoy the user with its unnecessary complexity.

Reliable customer support

Inventory tracking software has multiple features and might require users to contact the vendors for technical support. Reliable, prompt, and helpful customer support is a must feature for inventory control software.

Product deactivation

This will deactivate a product that is not available with the seller or is temporarily out of stock. This feature prevents the scenario of placing an order by a customer for a product that is out of stock.

Bulk changes in the price

This feature allows sellers to change the prices of multiple listed items on their e-commerce site with just one click.

Order management

Purchase order form, returns, payments, invoice generation, order editing, pricing, and backorders

Product identification

The inventory management system paired with the barcode scanner, RFID, and other wireless equipment help in identifying the products and maintain accuracy. A perfect barcode inventory system with the right combination of software and hardware can eliminate issues arising due to mismanagement of the inventory in the organization.

Product categorization

Product categorization means that the software creates multiple labels.

Multi-location management

This feature provides real-time updates of your inventory and synchronizes all information from your multiple warehouses. 

Grouping of Inventory

It is easy to find, manage, and locate inventory if it is categorized and classified in groups. This feature helps in finding similar traits in stocks and then groups them under one label.

Online/Offline Sync

If you are offline and some client places an order for your stock, this feature allows you to accept that order offline. When you come back online again, the order is updated on your server.

Demand Forecasting

The software should be able to forecast the demand for all products individually based on the available historical data, current business, and future prospectus.

Supplier Management

This feature enables users to manage their suppliers. It provides a list of all suppliers in one click. It records all the transactions that you are done with particular suppliers. It keeps track of the nearest and cheapest available supplier for your next refill of inventory.

Analytics and Reporting

The software should provide a detailed analysis of the inventory metrics and present varied reports about all important aspects of the inventory.

Inventory control software is a one-time investment that you would do to let your business scale in a positive trajectory. The article has already discussed inventory management and the technological needs of the process. Besides, before you finalize a software solution for your business’ inventory management, you need to ensure certain things. Let’s see what these are.

Key Factors to Consider in an Inventory System Software

Feasibility

Software is feasible for your business if it proves profitable against the cost incurred. Before buying the software, you must analyze and compare the software’s price with the profitability you can expect with its deployment.

Suitability for your industry

To make the best choice, you must confirm the suitability of a particular inventory solution for your industry and business through reviews, ratings, and feedback of the software from other customers of the same industry. The software vendor must also possess prior experience in your specific industry.

Features

All inventory management solutions provide a different set of features, and the same size does not fit all! So, it is crucial to ensure that the inventory management solution you choose provides all the necessary inventory management tools needed for your business’s smooth functioning.

Third-party integrations

The software must allow integration with all the necessary software systems or platforms that your business uses, such as your existing ERP system or popular eCommerce platforms like Shopify, Magento, or Amazon.

Customizability and scalability

The software should allow scalability to support your business growth. It should also be customizable to your specific business needs.

Customer support and user training

Like every other complex software solution, the inventory software vendor must offer user training and prompt customer support as needed. You can find this out through online reviews and feedback or by directly discussing it with the vendor.

The costs of inventory management program or software depend on a large number of factors such as:

• Whether it is a cloud-based system or not
• Features it offers
• Number of users and admins it allows
• The quality of service offered
• The user interface and user experience of the software
• The profitability the software can generate for clients when deployed

These variations can change the software’s approximate costs and estimations by 100% to 200% or 500%. The SaaS inventory management products may range from low cost to too costly ones depending upon the scalability and number of orders it can process.

The advanced and complete features enabled software will cost you around $250 per month on an average. We have come to this figure by analyzing the average costs of the top inventory management software listed on the GoodFirms page.  For example, Tradegecko costs around $199 (orders limited to 1000 per month) for a full-plan inventory control software for small businesses, Orderhive’s business growth plan would cost you about $269 (for unlimited orders), and Zoho Inventory’s professional plan will cost you around $ 206 per month (online orders limited to 30K per month).

Free and open-source inventory management tools can prove to be a game-changer for your business. It is free to use, so you don’t have to worry about your budget and any extra costs before deploying it for your inventory management needs. With no investment, the Return on Investment will always be positive. Many free and open-source inventory software solutions provide the same services and features as the paid ones. With an open-source alternative, you can also customize features and add plugins when needed.

As cloud inventory system software is not dependent on hardware requirements, it is easily scalable. Cloud-based management is more trustworthy than on-premise software. It can do real-time and remote inventory management. The cost of cloud-based inventory software is comparatively lower than the on-premise ones.

GoodFirms researches all software with a focus on the quality, reliability, and ability of the software. With above 30K unbiased reviews from verified customers and a listing of over 60000 services and software, GoodFirms stands as the most reliable source that provides readers with a list of top inventory control software.

GoodFirms has listed the top inventory system software after carefully analyzing their features and prices. It further categorizes them based on their features. We provide various filters for you to find a sorted inventory management software list based on pricing models, deployment criteria, devices supported, support available, business size type, and available resources. GoodFirms’ insights will prove helpful to you as these are based on information from industry leaders worldwide, rigorous analysis, and the shared reviews of the users.