Switch to Safe and Secure Inventory Through Automation

The coronavirus pandemic (COVID-19) upended a lot of business and disrupted supply chains all over the world. Despite the uncertainty, eCommerce continued to grow. A survey from eMarketer reveals even with the disruptions, eCommerce sales in the U.S. posted YoY revenue increases of 68% as of mid-April and expect to show overall gains of 18% by the end of the year.

A good inventory management system can be the key difference between your business growth or failure. Any eCommerce seller must walk a fine line between overstock and stockouts but keeping an eye on inventory becomes more and more difficult as your business grows. 

Best Practices for Inventory Management

  • Maximize Inventory Turnover

Inventory turnover calculates how many times specific goods have been sold and reordered during a given period. It’s a ratio of  Cost of Goods Sold (COGS) by average inventory.

COGS = (Beginning Inventory Cost+Purchases Cost) – Ending Inventory

Inventory Turnover Rate (r) = Cost of Goods Sold / Average Inventory

Inventory Turnover Period = Inventory Turnover Rate (r) / 365.

  • Know Your Item Values
    To maximize turnover, you must know what inventory to prioritize. Not all products are created equal.

Highlighted above, inventory management places products into three categories based on their value to your business. It’s an adaptation of the Pareto principle: 80% of all effects come from just 20% of causes.

  • Items of high value (70%) and small in number (10%)
  • Items of moderate value (20%) and moderate in number (20%)
  • Items of small value (10%) and large in number (70%)
  • Forecast  Your Demand

Negotiate reduced minimum order quantities with suppliers in order to deter long-term risks of holding too much inventory and racking up debt. As a result, smaller and more frequent orders enable your company to have flexibility when variations in demand occur. If demand patterns change, you’ll be okay because smaller inventory quantities can accommodate change, rather than huge piles hoarding valuable space in your warehouse.

Today, however, automated demand forecasting is available to businesses of all sizes, thanks to intelligent inventory management systems. Further syncing your inventory with your accounting or eCommerce platform will help you to enable updated accurate reports. 

Frequent Inventory Challenges

  • Reduce Overselling

Overselling occurs when you sell more than your stock levels. If you are overselling, you risk losing a sale or delaying product delivery, which can damage your relationship with your customer. Even though some of the marketplace platforms like Amazon will not tolerate overselling and you can lose your ability to sell on their platform. The most common causes of overselling have been pointed out as inaccurate inventory calculations mostly because of manual inventory management or managing over spreadsheets.

Sync your inventory and push that accurate count to your various marketplaces with an inventory management system that integrates with your channels. Then, pull your orders into one central location.  Never oversell again!

“58% of online shoppers find it important to have the ability to view a retailer’s inventory status online when searching/selecting products”-
UPS Pulseshopper Review
  • Prevent ‘Out of Stock’ into ‘In-Stock’

A sudden spike in demand might lead you towards ‘Stock-Out’ situations. Accurate Safety Stock analysis is the solution for your business. Safety stock is the buffer quantity of an item in an inventory which eliminates your chances of ending up in “out of stock” situations. For example, you have an item such as  “Belgium Glass Vase,” where your maximum daily sales is 20 and your maximum lead time (total time required to replenish that item) is 6 days, with an average daily usage of 5 and an average lead time of 2 days. Your safety stock is 110.

Prevent stockouts with the forecasting features and reorder reports of an inventory management system. Forecasting will help to identify trends, like how quickly certain products are selling. Reorder reports remind you to reorder products so you’re always able to have quantities listed.

Over 70% of online shoppers would search for an item elsewhere if it was unavailable, rather than wait any length of time for it to come back in stock”


-Symphony IRI Group

If you’re in need of a strong eCommerce-facing Warehouse Management software then SkuVault is your answer. Skuvault calculates safety stock for your inventory by accumulating your Standard Deviation of Lead Time,  Demand Average, and Service Level Factor.  To know your buffer stock you need to consider three metrics:

  • Standard Deviation of  Lead Time: From the difference between your expected time (constant) and actual time, you can calculate your variance time. To determine the standard deviation, add up all of the variances and divide them by the number of samples counted portions. Finally, add that amount to your constant expected time.

  • Demand Average: Calculate your average demand by the total volume of orders given versus the number of days (total orders placed divided by the total number of days).

  • Service Level Factor: Deciding on the correct service level for a certain product is basically balancing inventory costs vs. the cost of a stock out. According to the Journal of Public Administration Romania, the Retail Industry Average for service level is 90% which can vary up to 95%, depending upon your business model. Thus, the Service Factor for 90% is around 1.28 ≃1.3.

[Image: Standard Service Factor Distribution] 

Applications like Skuvault assist you with their Replenishment Report functionality, which allows your team to generate a detailed report to inform you of inventory levels. You’ll have instant access helping you to make smarter and faster-purchasing decisions. 

25% of business costs are spent on inventory management.34%  said that they shipped an order late because they inadvertently sold a product that wasn’t in stock.Source:://www.waspbarcode.com/small-business-report.

Switch to Automation

Automating your inventory with accounting or eCommerce platforms will help you to reduce your lead time by syncing products, orders and vendors. Suppliers would be updated with vendors of inventory automatically, saving valuable time by avoiding manual entry. Further, the purchase order that is generated in accounting can be transferred to inventory, continuing to save time by reducing your lead time. 

Statista reports: “More than 43% of eCommerce operators report plans to invest or upgrade their Warehouse Automation to remain competitive.”

Make the Most Out of Your Inventory

  • Get Real-Time Financial Data

Every transaction across your sales and inventory channels is synced immediately, providing you with an accurate view of your business financials in real-time. When all of your customers, vendors, items and stock quantities are synced within your accounting application, you will always receive an accurate financial report of your business.

  • Less Order Cycle Time

The total amount of time from receiving an order through fulfilling it is known as the “order cycle time.”  Once you receive the order through your eCommerce or accounting channels,  you can automatically get updates on stock levels and process for shipment accordingly.  According to industry research, any B2B eCommerce solution can cut cycle time down from seven days to two by automating their inventory process, resulting in receiving their key products sooner.

Tradegecko says Australian shipping company Catch.com reduced their number of pickers by automating their storage processes, which cut their order cycle time in half.

Commonly Used Integration

Tracking your inventory is one of the most complex and difficult automation to execute. As the numbers of Sales and Purchase Orders increases, it becomes much more challenging to track inventory items’ movements and stock-on-hand updates. We have often observed that in such cases,  your accounting software serves as the master database. 

  • Sync Your Orders

Syncing your inventory will allow you to automate order processing. Once you receive an order through your eCommerce or accounting platform, your Sales Order integration (and its line item integration data flow) retrieves data from the Sales Module in Accounting and integrates it with the Sales Module of SkuVault, as a Sales Order and its line items respectively. You can check your inventory immediately and either process that order or,  if you have to initiate a purchase order, have it noted on your accounting system at the same time. 

A typical bi-directional mapping between your accounting like Quickbooks and SkuVault tracking inventory can be illustrated below:

You can also leverage the seamless integration offered by DBSync to provide greater visibility into ordering and fulfillment, billing, invoicing, and payment collections without the need for duplicate import/export or transforming information. We are excited to empower our mutual customers with greater transparency, reduced errors during fulfillment, and in handling returns, which ultimately enables them to deliver a seamless, accurate, transparent and efficient ordering experience for end customers.

Work with DBSync

  • Better ROI

In general, customers report as much as 87% slower fulfillment, 90% out of stocks, and 83% mis-ships in their shopping experience. Eliminating these errors cuts your costs and can significantly improve your margins. As seen below, DbSync customers have reported an increase in growth over a short period of time: 

“We have been using DBSync to integrate Skuvault and QuickBooks Desktop. With DBSync we have seen an improvement of business ROI by 20% in just a few months” 


-Edward Yoo, Sports World Inc.
Retailers worldwide lose a staggering $1.75 trillion annually due to the cost of overstocks, out-of-stocks, and needless returns.

Inventory distortion costs retailers nearly $158 for every man, woman, and child on the planet.[Source: understandingeCommerce.com]

  • Fast & Secured Integration 

Our pre-built templates assist you in connecting your accounting, ERP, and/or CRM systems within minutes. Our in-built scheduling and queuing of data flow make sure that critical business objects like Customer, Items, Invoices, and Orders are not duplicated and integrity is maintained. 

  • Hybrid Environment

DbSync is able to integrate your on-premise and cloud applications. For example, if you use the Skuvault cloud application and the Quickbooks Desktop version, we can integrate them for a more efficient and effective experience.  

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