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Inventory Management for the New Year

Updated: May 16

Woman in warehouse with inventory.

Inventory management sounds so simple, doesn’t it? After all, it is just basic arithmetic. And yet it can drive small eCommerce fulfillment business owners crazy!


There is no time like a New Year to take a fresh look at how your Shopify fulfillment business is managing inventory and we have got you covered with a checklist of action items for the New Year as well as some helpful hints for avoiding discrepancies.


First, if you haven’t done a physical inventory count or asked your order fulfillment provider to do one, now is the time! Your accountant is going to want to know how much inventory you had at the end of the year.


It can be incredibly frustrating if you run into lots of discrepancies between your physical count and inventory system. Trying to figure out how things got so far off can quickly become an unending trail of uncertain transactions and missing records.


If you have a lot of discrepancies, it's critical to do some research and find out what has gone wrong so you can develop new processes for the New Year. Here are 5 common causes of inventory discrepancies for eCommerce fulfillment businesses:


  1. Returns are not properly returned to either the physical inventory location or inventory system. On that note, we also see that sometimes Shopify businesses restock items that were actually trashed or quarantined.

  2. Last-minute changes to orders may not get properly recorded in your inventory system. This is especially the case for Shopify fulfillment businesses that ship internationally and can’t modify those orders.

  3. Sometimes it is as simple as inaccurate receiving. The packing slip may say that you received 1,045, but if you don’t get an accurate physical count, you don’t know for sure.

  4. How is it possible that 3 people can count the same thing and come up with 3 different counts? I don’t know but it is more common than you would expect. If you truly want an accurate cycle count, it is best to have two people count separately, compare their results, and then recheck anything that didn’t match up.

  5. Speaking of cycle counts, it is essential that you don’t do a cycle count when you have inventory in limbo. Depending on the system you use, inventory may be deducted from the system but not yet removed from your physical inventory. It is a good idea to be sure no one is pulling inventory or packaging orders while cycle counts are going on.

We know that keeping an accurate inventory is just the beginning of the challenges small businesses face when it comes to inventory management. This is also a great time to do some planning for the coming year.


At Key Fulfillment, we encourage all our eCommerce fulfillment customers to set reorder points. That way we can send them an automated email when it is time to reorder. Along with that, it’s a great time to consider what your high-demand items are and review your supply chain to ensure that it will run smoothly in the coming year.


If you would like the formulas we recommend for setting reorder points and identifying your high-demand items, check us out on Instagram or Facebook or email us at and request them.

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