An Overview Of Magento Inventory Management — Tips, Extensions, And Best Practices

Inventory is critical for any business, be it online or brick-and-mortar store. Moreover, when the world is online, you are more likely to own an online store along with the offline one.

But, managing tonnes of inventory entails numerous processes which can take up a huge amount of employee time. However, if your website is built on Magento, Magento inventory management is seamless because of the versatility of the platform.

So, Magento product store management becomes easy when you apply a few management techniques, which we will discuss further in this article. Magento uses the following inventory management techniques:

Methods of inventory management

• First in, first out (FIFO)

In this type of Magento store management, the stock that was received first is sold first. In many firms, this method is considered the most accurate and correct inventory management method because it matches the actual flow of products.

This method also minimizes the risk of product obsolescence.

• Just-in-time (JIT)

JIT is one of the most widely used inventory management techniques in which a product is made or stocked as consumers place an order. Here, companies do not store goods in their warehouse.

As a result, storage costs are reduced, and more space is available. However, businesses need to have insights into consumer behavior so that they can fulfill orders on time.

• ABC analysis

This method is also known as selective inventory management, where goods are assorted based on preset factors. So, it is ideal for businesses that have a diverse product line. They can sort their products according to the following:

• A: High-value products but with low quality
• B: Moderate value products with a moderate quantity
• C: Low-value products with a high quantity

This method also requires knowledge of the buying patterns of the clients.

• Setting stock par levels

In par level eCommerce store management technique, businesses keep a minimum level of all products so that they can cover up delays. This acts as a safety net for companies that serve diverse customers and sell varied products.

• Dropshipping

Dropshipping is a popular eCommerce model. Here, rather than maintaining a warehouse, business owners order products from third-party and directly sell to customers. As a result, manufacturers do not need to deal directly with customers, and drop-shippers need not maintain stock.

• Demand forecasting

Demand forecasting is a process that ensures accurate and effective inventory management. It creates long-term forecasts through data-intensive procedures that guide improvements and changes in inventory management.

Here, you will need past data. But, the forecast might be inaccurate sometimes because of market fluctuation, buyer preferences, and new products.

Magento inventory management extensions

• Multi-warehouse inventory from Amasty
• Inventory management from Magestore
• Multi-warehouse inventory from Aitoc
• Inventory management from Boostmyshop

In conclusion

Magento is an outstanding eCommerce channel that offers numerous benefits. Moreover, it provides various extension abilities and inbuilt systems to manage your inventory and ultimately satisfy customers.

However, installing extensions might require technical skills for which you can utilize Adobe commerce store management services.