No small business owner wants to sell and restock their items blindly. Maintaining inventory control is an important aspect of running any small business that sells products — which is where an inventory management system comes in. No matter the type of system you put in place, it’s essential for you to track inventory to increase efficiency and customer satisfaction.
Your business’s data can tell you a lot about how to manage your inventory. In this article, we explain what inventory management is, how to put a system in place, and the best options for inventory management software.
What Is Inventory Management?
Inventory management is a system of tracking what you have available to sell and what you have already sold. Whether you’re a retail business selling hundreds of different items or a mechanic that sells a few car cleaning products on top of the everyday services you offer, managing your inventory has many benefits. It tells you when to reorder, when to cut back on inventory, how well stocked your warehouse is, how quickly your stock is turning over, and more.
An inventory management system allows you to:
- Maintain inventory control to make sure you don’t run out of any products so you can fulfill all the orders that come in
- Ensure you don’t oversell a product
- Avoid overstocking products that may expire before they sell
- Look at data that informs you which products aren’t moving and that you can choose not to restock
- Forecast which products you will need to stock up on soon
- Circumvent shipping delays for your products by planning ahead
This system can be done manually on a spreadsheet or you can use software to automate the process. An inventory management system provides a more hands-off solution that does a lot of the work for you. It’s similar to how a small business would use accounting software to lessen the number of mundane tasks you have to complete on a daily basis.
Inventory software lets you keep track of your inventory from the platform itself instead of having to manually input every item sold from and added to your stock. If you have a lot of products that you sell, signing up for inventory management software can free up a lot of your valuable time as a small business owner.
Why Your Small Business Needs an Inventory Management System
There are many reasons to use a system to manage your inventory. An inventory management system is necessary for businesses that have stock to manage and use a lot of time handling it. A system automates or simplifies the process. Again, your system can be manual via a spreadsheet or it can be a tool offered by an external company.
It’s important to note that an inventory management system isn’t only specifically meant for retail businesses. Forming a system is also worth it for small business owners that sell services their clients trust as well as products (or are considering adding a few products to their offerings). For example, a hair stylist that sells their favorite products for clients to use at home or a yoga studio that sells mats and exercise bands will absolutely benefit from creating an inventory management system. Additional products can supplement and diversify your business’s income, and staying organized is a huge part of its effectiveness.
Perhaps most importantly, your customers will be happier with you if you maintain inventory control. No one likes ordering a product only to realize the business oversold and it’s no longer in stock. Keep your customer trust high by keeping a close and accurate record of your inventory.
When to Choose Inventory Management Software
If you have a lot of products to track, your workflows are complicated, or you’re looking to ramp up inventory spending, you may decide to go the software route. Inventory management software should let you:
- Plan and forecast inventory needs
- Use your business data for more effective inventory management
- Provide a solid customer service experience
- Get supply chain transparency to avoid disruptions
Inventory management tools provide a software solution for a mundane business task. You can add new inventory, edit current supplies, and review what you have in stock directly from inventory management software platforms. Your stock is reduced automatically when you add invoices to the software, taking away the burden of entering this change in stock manually. You’ll get real-time inventory updates so you can make quicker and more accurate decisions. An inventory forecasting feature is especially useful to help deal with current shipping and supply chain delays.
And adding new software to your business toolbox might be easier than you think: These software systems might be part of larger business services offerings that you already use. All-encompassing software options are known as enterprise resource management (ERP) inventory management software. Other software focuses solely on inventory management. The right one for you depends on your business needs, size, and budget.
Best Options for Inventory Management Software
There are a ton of choices for inventory management systems. We filtered through the companies that are currently offering systems you can subscribe to and found our favorites, which we highlighted below.
Take a look at these great inventory management software options to help you make a decision about how you want to manage your inventory.
FreshBooks is a business service platform that offers many useful tools like invoicing, time tracking, and inventory tracking. You simply click the Track Inventory button when you enter an item in FreshBooks. You can also add inventory information from integrations with Shopify, Squarespace, BarCloud, or 2Ship. So it gives you a single platform to track all your stock levels. FreshBooks also generates item sales reports for each product you sell so you can easily analyze their worth.
You’ll have to pay for a FreshBooks subscription to be able to access its inventory tracking feature, which costs anywhere from $15 per month to $50 per month. At the time of writing, it’s on sale for the first three months, and you can save more if you pay for an annual subscription.
2. Zoho Inventory
Zoho Inventory is a part of the larger Zoho business services software that allows business owners to fulfill many of their accounting, customer relationship management (CRM) marketing, and payment needs from a single location. Inventory is one part of the services offered by Zoho, as well as warehouse management and dropshipping. Businesses can complete sales orders and create purchase orders, as well as fulfill backorders, from Zoho Inventory. You can make unique serial numbers for each item using this software, as well as access batch tracking features.
There is a free Zoho Inventory plan, but if you need to send over 50 orders per month, pricing ranges from $59 per month when billed annually ($79 when billed monthly) to $239 per month when billed annually ($299 when billed monthly).
Veeqo is an ecommerce platform that offers both inventory management and order fulfillment tools. You can stay on top of your inventory and forecast to see when you need to replenish it. Veeqo integrates with over 20 shipping carriers and sales channels like Amazon, Shopify, and eBay for real-time updates. You can also create reports to track your inventory, sales, and fulfillment information easily and effectively.
If your business needs to both track its inventory and ship to customers, Veeqo might be a good option for you — although first make sure it’s in your budget. There’s a free trial, but after that you’ll pay between $10 and $45 per month for 50 orders. The cost increases from there as you bump up the number of orders you need to fulfill each month.
Sortly is an inventory management solution that is designed specifically to help you stay on top of your inventory levels. You can use either QR code or barcode scanning to make your inventory count much easier. There’s also an iOS and Android mobile app that allows you to manage your inventory on the go. If you have a team that tracks your inventory items, you can give other members access to your Sortly account.
There’s a 14-day free trial and a limited free plan, but if you want more advanced options you’ll pay between $49 and $119 per month. Paying annually saves you about 40% at the time of writing.
Inventory management for multi-channel businesses is one of the many solutions Brightpearl offers, along with a point of sale (POS) system, warehousing, fulfillment services, and more. Its built-in Inventory Planner is one of its key features, which can forecast and predict your inventory needs, as well as show you which stock keeping units (SKUs) you’re overstocked on. You can analyze each product’s data to see what’s performing well. Additionally, take a look at a Replenishment Report to reorder products as needed so you don’t run out when you have low stock. Use a barcode scanner to update inventory levels automatically as well. You can also see a bill of materials to track your raw material inventory.
Pricing is customized depending on your business, your industry, and your unique needs.
6. InFlow Inventory
Inflow Inventory makes inventory management easier — you can even adjust inventory levels from your mobile device. The company’s reorder points and notifications allow you to order in time to avoid stock-outs. You can generate barcodes and SKUs automatically using inFlow. Your inFlow account integrates with online marketplaces and services like Amazon, WooCommerce, Shopify, and QuickBooks.
There’s a 14-day free trial and then you’ll pay between $99 and $549 per month, depending on the size of business you run and how many team members there are. You can save around 20% by paying annually.
NetSuite’s order management solution could work well for a commerce business because of its wide array of tools. It offers a multichannel order management service that helps with customer sales, order pickup, and customer returns. You get the birds-eye view of your business’s global inventory supplies across all the different channels your business operates on so you’ll increase your efficiency.
You’ll buy an annual license fee for NetSuite that is based on three parts: a center platform, add-on modules, and the number of users, plus a set-up fee. Your license is adjustable and you can add on to it as your business grows.
Cin7 is inventory management software that allows you to track and control your inventory and more. Its core modules are Products, Purchases, Insights, Stock, Accounting, Production and CRM. Cin7 allows for things like barcode inventory tracking, bundling, dropshipping, and more. You’ll also have reporting capabilities to see accurate costs and plan your inventory. Other products on the Cin7 platform include order management, order fulfillment, and a POS system.
Pricing is higher than some of the other options — it falls between $299 and $999 per month for access to all of its core modules, so make sure it’s in your budget.
9. Lightspeed Retail
Lightspeed Retail focuses on bringing commerce tools to businesses in the retail, hospitality, and golfing industries. So if your business falls into one of these categories, it could be a good option for you. Lightspeed Retail provides a variety of business products, like point of sale systems, accounting, and hardware offers. Its inventory management solution works off a cloud-based system to help you keep track of your stock. You’ll develop unique serial numbers and the built-in barcode generator for your products that speed up the tracking process, and you can reorder inventory directly from Lightspeed Retail.
There’s a free trial and then pricing depends on your industry and how many features you need.
Megaventory has inventory management, order fulfillment, and manufacturing tracking tools built into its platform. You can track stock at multiple warehouses and locations as well as returns and supplier lead times. Another feature allows you to track your products over time to see the long-term picture of which products are working best for you. You can also create reports to see your inventory availability, value, and gross profit. There are integrations with companies like Zapier, WooCommerce, Shopify, and QuickBooks.
There’s a free trial and then Megaventory Pro costs $135 per month. You can save around 10% by paying annually. It also offers an enterprise plan that offers more features, but you’ll have to speak to the sales team for pricing.
Orderhive is another product from Cin7 that supports ecommerce businesses. The inventory control software lets you manage and track your inventory quickly and easily. You can use serial numbers on batches and lots of your inventory. You can create and print barcodes for your products to organize and track them. Your inventory levels will sync automatically across all your channels.
After a 15-day free trial, pricing falls between $95 and $500 per month, depending on the plan you choose. You can save money by paying annually.
All information about these productivity apps has been collected independently by Nav. This software is not currently available through Nav.
Questions to Ask When Buying Inventory Management Software
Deciding on an inventory management system is an important choice for your business. Here are several things you’ll want to ask yourself while you’re comparing options.
1. What type of business do you run?
The kind of business you run is a big factor in determining which inventory management software you go with. Ask yourself what stage and size your business is, and which industry you operate in. A new business or small business may not need to invest the cash into a software management system, especially if you only have a few products to track. It may make more sense to pay for software once your inventory pulls in over $100,000 because it gets much more complex or if you’re running a retail operation with lots of products. After that, an inventory management system can be very helpful in alleviating your stress and workload.
2. How much does it cost?
A system to manage your inventory needs to fit within your business’s budget. Overspending on any service isn’t going to help your bottom line. There are options that have free trials or free plans, but you’ll have to consider what you get in return for the free option. If you do decide that it’s worth spending money on to free up your time for bigger picture tasks and increase your efficiency, make sure you can afford to pay the monthly fee. The return on investment should be greater than what you pay.
3. How easy is it to use?
Inventory management software should streamline workflows rather than create more of a headache to use it. When you’re looking at your options, make sure the software you choose is simple to pick up and get going with. You don’t want to feel like you have to take a college class just to add a piece of software to your business lineup. Free trials can be really helpful here. The easier it is to use, the faster you’ll be able to train any team members to use it as well.
4. What features are included?
Functionality is one of the most important aspects of an inventory management system. Look at what’s included in your subscription and what perks it will bring to your small business. If you need advanced inventory features, make sure there’s an option within your budget. If forecasting is a big issue for you because you tend to run out of inventory because of lack of predictability, it’s important that your choice include that option. If you’re crazy busy and you need notifications, make sure you’ll get stock alerts when your supply is low. Think through whatever features are most important to you and ensure that the option you pick has them included.
5. Do you need integrations?
Many inventory management software options have ecommerce, accounting, or order management integrations at the ready. Often, inventory and sales systems go hand-in-hand, so it makes sense that you can connect your various platforms to be able to see everything in one place. If it’s important for you to be able to integrate with the other services you use, make sure your inventory management choice lets you.
6. How many people will need access?
Some of these systems have limits on the number of separate accounts you can create. If you have multiple team members who will need to access your inventory management system, make sure you’ll be able to give them access without skyrocketing your monthly fee. A cloud-based system is also important for anywhere access.
Choosing the Best Inventory Management System
Picking an inventory management system means choosing between a manual option like a spreadsheet and pre-built software. The one that’s right for your business depends first and foremost on how many products you have to manage. If you have only one or two products, a self-created system may work perfectly fine for you. Or you might look at some of the free software options in the choices we listed above to see if one might work better for you.
If you have a lot of products or very limited time, answer the questions above to help you decide which software makes the most sense for your business. There’s no right or wrong — there’s only right for you. While you’re in the process of optimizing your business systems, don’t forget to turn to Nav. Creating a free Nav.com account may help you gain control of your business’s success. Using your unique business details, we can point you to the funding options like business credit cards or small business loans that might be the next move in your winning business strategy.