Stock control in ecommerce is critical, yet many businesses fall victim to common misconceptions that can hurt their efficiency and profitability. Poor inventory management leads to cash flow issues, fulfillment delays, and lost sales, making it essential to adopt best practices that ensure a well-balanced stock strategy.
From overstocking to relying too much on manual processes, ecommerce companies need to recognize and correct these misunderstandings to stay competitive. Below, we address six of the most persistent myths surrounding stock control and explain how businesses can optimize their inventory practices for long-term success.
1. More Stock Is Always Better
Holding large amounts of inventory might seem like a smart strategy to prevent stockouts and meet demand quickly, but excessive stock creates significant risks. Products sitting in storage tie up capital that could be used for marketing, product development, or operational improvements. The longer an item stays on the shelf, the more its value depreciates due to shifting consumer trends, potential obsolescence, or spoilage (for perishable goods).
Storage costs also escalate with overstocking. Warehouses charge based on space usage, and excess inventory forces businesses to lease additional storage or reorganize existing space inefficiently. Moreover, items that don’t sell can lead to markdowns and liquidation efforts, cutting into profitability. Striking the right balance through demand forecasting and data-driven inventory planning prevents these financial burdens.
2. Manual Tracking Works Fine
Many small ecommerce businesses begin with spreadsheets and manual stock tracking, believing it’s sufficient. However, as order volume scales, so does the risk of human error. Manual processes often lead to discrepancies in stock levels, delayed restocks, and inaccurate order fulfillment, resulting in lost revenue and poor customer experiences.
Automated inventory management systems (IMS) integrate real-time stock tracking, order processing, and reporting, ensuring businesses maintain accurate inventory counts. These systems minimize stockouts by automating reordering processes and identifying slow-moving products before they become a liability. With the increasing complexity of multichannel selling, automation ensures consistency across warehouses and marketplaces, reducing overselling and missed sales opportunities.
3. Just-In-Time Always Saves Money
Just-in-time (JIT) inventory management reduces excess stock by replenishing products only when orders come in. While this strategy lowers holding costs and limits deadstock, it introduces vulnerabilities. Supply chain disruptions—such as raw material shortages, port congestion, or unexpected demand spikes—can delay restocks, causing backorders and dissatisfied customers.
JIT also depends on accurate demand forecasting and reliable suppliers. If a manufacturer experiences delays or increases lead times, ecommerce businesses may struggle to fulfill orders, leading to lost sales and damage to their reputation. A hybrid approach—balancing JIT with safety stock for high-demand products—helps mitigate these risks while maintaining cost efficiency.
4. Free Shipping Always Justifies Larger Stockpiles
Many ecommerce businesses assume that offering free shipping requires large inventory reserves to meet demand efficiently. While free shipping can boost conversions and encourage larger order values, maintaining excess inventory solely to justify this offering can backfire.
Bulk purchasing might reduce per-unit costs, but it doesn’t account for shifts in consumer behavior, seasonal fluctuations, or warehouse constraints. If demand drops, businesses are left with surplus stock that either takes up space or requires steep discounts to clear. Additionally, fulfillment partners often operate more efficiently with streamlined inventory levels rather than stockpiles that slow down order processing.
Instead of overstocking, businesses should analyze order patterns, optimize warehouse locations, and leverage data-driven demand forecasting to ensure free shipping remains cost-effective without excessive inventory investments.
5. Dropshipping Eliminates Stock Control Challenges
Dropshipping is often seen as a hassle-free way to avoid inventory management since third-party suppliers handle stock and fulfillment. While this model reduces the need for upfront inventory investments, it doesn’t eliminate stock control issues.
First, suppliers may run out of stock unexpectedly, leaving businesses unable to fulfill orders. Since merchants don’t have direct oversight of inventory levels, they rely on suppliers for updates, increasing the risk of overselling. Second, fulfillment times can vary significantly, especially if a supplier is overseas, leading to delayed shipments and customer dissatisfaction.
Additionally, dropshipping limits control over product quality and packaging. Businesses that rely on multiple suppliers may face inconsistent branding and variations in fulfillment speed. Implementing inventory tracking tools and maintaining a mix of dropshipping and in-house stock ensures better reliability and customer experience.
6. Stock Control Is Only About Avoiding Stockouts
Many ecommerce businesses focus solely on preventing stockouts, but effective stock control goes beyond replenishing inventory. It encompasses demand forecasting, supplier reliability, storage optimization, and fulfillment efficiency.
For example, businesses that sell seasonal products must plan for demand fluctuations by adjusting stock levels accordingly. Holding excess winter gear in summer or vice versa can lead to deadstock and unnecessary storage fees. Similarly, tracking product expiration dates is essential for perishable Consumer Packaged Goods (CPG) to prevent waste and compliance issues.
Stock control also impacts cash flow. Ordering too much ties up funds that could be used elsewhere, while understocking can lead to missed sales. Implementing an inventory management strategy that includes data analytics, safety stock buffers, and supplier diversification ensures a steady balance between supply and demand.
We’ve Got Stock Control Ecommerce Experts On Hand
Whether managing in-house inventory, balancing just-in-time ordering with safety stock, or integrating automation for multichannel sales, choosing the right fulfillment partner ensures seamless stock control. With real-time reporting, precise order accuracy, and warehouse efficiency, Shipfusion empowers ecommerce businesses to scale confidently without overburdening operations or capital.
Learn more about our solutions by contacting us today.
