December 13, 2021

Inventory Analytics- A Central Process Of eCommerce Sales

It's no secret that eCommerce businesses are booming. What may be a secret, however, is the inner workings of these businesses- specifically, inventory analytics. Many business owners are under the false impression that this process is unnecessary or too complicated. In reality, though, inventory analytics is a critical part of any successful eCommerce operation. In this blog post, we'll break down what inventory analytics is and why it's so important for eCommerce businesses.

What Is Inventory Analysis? 

Inventory analysis is the observation of the existing inventory levels of each product sold by a business. The observation of existing inventory levels helps analyze the gap between supply and demand for the product. Therefore, inventory analysis helps the company fill the gaps between product stock, supply, and demand. The analysis process thus helps optimize buying and selling of products, but not every product of an eCommerce business witnesses high demand. Therefore, all the products do not require uniform inventory levels. Inventory analytics data helps in the micro-management of inventory to maximize revenue and profits from product sales. 

Inventory analytics is central to sales and marketing, with a profound impact on the profitability of the entire sales algorithm, in an extension of inventory analysis results linked with customer analytics and supply chain management. The process helps in inventory cost reduction to increase profits for the business. Inventory analysis is necessary for every eCommerce business because of its impact on sales, marketing, and profits. 

Benefits Of Accurate Inventory Analytics

Always Has Inventory At An Optimal Level

Stock analysis always keeps the seller in the know about the product stock level in the warehouse. Every eCommerce business deals with hundreds of thousands of products. Keeping track of each of these product stocks is a humongous task. Moreover, the estimation and classification of each of these product stocks according to demand is also time-consuming. However, advanced inventory analysis methods and tools resolve the challenges. Organized inventory data helps keep the right products in the right quantities in the warehouses. The entire process optimizes the product packaging and shipping process. Hence, product inventory analysis has a domino effect on shipping and sales. 

Accurate Forecast Of Product Stock

The use of inventory analysis from time to time helps inaccurate forecasts for product stock. The whole process of packaging and shipping keeps the stock mobile. On the other hand, the stock refilling according to demand also keeps the shipping process moving. Thus, both these processes are closely linked. Inventory analysis and forecasting are critical for a smooth sales and shipping process. With proper inventory analytics data, a seller looks at the previous demand graphs. This helps in accurately predicting future stocks to meet product demand in the market. Forecast of product levels helps in better sales and profits. The estimates also keep fresh stock so that the customer gets the product of excellent quality at all times. 

Less Stagnant Capital Investment In Inventory 

For eCommerce businesses, a majority of the capital goes into inventory. This is because the list is where the sales stem from. eCommerce businesses seldom create their products. These businesses stock up on products from producers and sell them to customers. Therefore, it is common for eCommerce businesses to have a lot of capital tied up to the inventory sector. While tied capital is necessary to a certain extent, it is equally important to maintain cash flow in the business. Proper inventory management and analysis help free the capital and keep it flowing in the operations. There is no excess inventory capital that sits at your warehouse. This allows the seller to distribute wealth better and optimize internal processes. 

Optimizes Supply Chain Management 

Earlier, we read that the inventory analysis examples also apply to supply chain management. In the supply chain of an eCommerce business, many stakeholders have their involvement. Inventory analysis helps in the direction of each stakeholder and their contribution. The process helps in the optimization of sourcing from suppliers. On the other hand, the method also allows the seller to eliminate inactive suppliers and reduce blockages in the supply chain—good inventory analytics help create the ambitious single-source supply model. Moreover, the analytics increase the transparency of the different parameters of the supply chain. This helps optimize the entire supply chain so that the revenue output from the chain reaches maximum levels. 


Inventory analysis is a process that helps businesses optimize supply and demand. It's an important part of the eCommerce business, but not every product has high demand rates. This inventory data can help micro-manage inventories for each individual product to meet your needs as well as customer expectations. Conveyr software manages all aspects of inventory management, so you don't have to worry about anything when it comes to managing your warehouse or stocking shelves with products.

Our newsletter

Get great curated articles every week.

Combine sections from Ollie's vast component library and create beautiful, detailed pages.