Having products out of stock is disappointing for both parties. The customer doesn’t get what they came to your store for, and you lose out on sales and customer loyalty.
As a retailer, it’s key to know how much stock you need to meet customer demand and when to reorder specific items.
That’s the role of a cloud-based inventory management system. It replaces messy spreadsheets, inaccurate stock reporting, and those chaotic dashes around your stockroom.
This post will highlight how a cloud-based inventory management system works, its benefits, and the top software available.
What is a cloud-based inventory management system?
A cloud-based inventory management system lets businesses track their stock online. Instead of keeping records on paper or a single computer, the system stores all your inventory information on servers in the cloud.
You can access real-time data showing which products are in stock, running low, or on order from any device connected to the web—be it your phone, tablet, or laptop. Cloud-based inventory management makes it convenient to manage inventory on the go.
📚Learn: Inventory Management: Everything You Need to Know (2024)
How cloud-based inventory systems work
Cloud-based inventory management systems simplify how retail businesses handle stock. Here’s a snapshot of how they work:
- Data storage on the cloud: Remote servers store your inventory data so it’s accessible online. You can check your inventory from anywhere without needing to be at your store or office.
- Real-time updates: Whenever someone buys a product, returns an item, or new stock arrives, the system updates immediately. Real-time updates keep your stock levels accurate, so you always know what you have.
- Integration with other tools: Cloud systems connect with other tools you use, like point-of-sale systems, online marketplaces, and shipping services. These integrations streamline retail operations, making selling products and fulfilling orders easier.
- Automated ordering: When stock levels get low, the system alerts you or even places orders with suppliers. This ensures popular products don’t run out and customers are happy.
- Easy access from multiple devices: Whether you use a smartphone, tablet, or computer, you can log in and manage your inventory. This flexibility is great for business owners who are always on the go.
📚Learn: Automated Inventory Management Systems: Key Features and Benefits
Benefits of cloud-based inventory management
Beyond giving you a reason to wave your messy spreadsheets goodbye, there are several key benefits of using cloud-based inventory management systems:
Real-time data access
Whether you're checking stock levels or updating product quantities, inventory data updates in real time so you never miss a beat.
With accurate, up-to-the-minute data, you avoid the hassle of stockouts. The system alerts you when it’s time to reorder, ensuring you always have what your customers want.
Lower costs
Cloud-based systems help you avoid overstocking or understocking, cutting down on unnecessary orders or lost sales. Plus, you’ll eliminate the need for manual inventory management, so you can use your time for more valuable tasks.
Accurate forecasting
Cloud-based systems analyze past sales data and inventory trends to help you predict future demand more accurately. This valuable data allows you to plan better and invest more wisely in your stock.
Fulfill orders faster
A streamlined inventory system means quicker order processing and higher customer satisfaction. With everything you need to know about your stock levels and where items are located, you can get orders out the door faster and keep your customers happy.
💡 PRO TIP: Shopify POS comes with tools to help you control and manage your inventory. Forecast demand, set low stock alerts, create purchase orders, know which items are selling or sitting on shelves, count inventory, and more.
Features to look for in a cloud-based inventory management system
With so many cloud-based inventory software options available, it can be hard to know where to begin.
Whichever inventory management software you choose, make sure it has these eight key features:
Real-time inventory tracking
Stay on top of your stock levels 24/7 with real-time updates. This feature ensures you always know exactly what you have and what needs restocking, so you can make informed stocking decisions.
Demand forecasting
Predict future stock needs with ease. By analyzing past sales data, this tool helps you forecast demand, letting you plan your inventory more effectively and avoid overstocking or running out of key items.
Multi-location inventory management
Manage your stock across multiple locations easily. Whether you store products in different warehouses or on multiple sales floors, this feature lets you track all your inventory from one central platform.
Stock alerts
Get alerts when your stock levels are low, so you can reorder in time to maintain a steady flow of sales without interruption.
Sales channel compatibility
Make sure your cloud-based system syncs across all your different sales channels. Whether you sell from a physical shop, online store, or Facebook, your software must let you manage inventory from one place.
Preorders
Encouraging customers to preorder items is a great way of generating buzz around upcoming launches. A preorder feature lets your business take orders for items before they’re in stock.
Preorders help you evaluate customer demand so you can manage supply and forecast sales.
Returns management
Choose a cloud-based system that helps you simplify the returns process. Your system must automatically update inventory levels when items are returned, ensuring your stock numbers are always current and correct.
When your returns process is hassle-free, your customers will be happier too.
Inventory reporting
Detailed inventory reports help you understand your inventory performance, identify trends, and make informed decisions.
Look for software that shares analytics about your best-selling products, slow-moving items, and ordering.
💡 PRO TIP: Having trouble knowing how much stock to order from a vendor? Merchants using Shopify POS can forecast demand with the Stocky app, which uses historical sales data to suggest which products and quantities to reorder.
The best cloud-based inventory management software
Not sure which cloud inventory management software is best for your business? Here are five user-friendly platforms:
1. Stocky
Stocky is the go-to inventory management solution for Shopify merchants. It directly integrates with Shopify’s ecosystem, making it a great choice for merchants looking for an easy upgrade from spreadsheets to smooth management.
Key features:
- Create and track purchase orders directly within the system
- Update stock levels quickly to reflect returns, damages, and other changes
- Predict future sales and optimize stock levels
- Store supplier information in one place for easier reordering
- Receive alerts when it’s time to restock certain items
2. Thrive by Shopventory
Thrive by Shopventory excels at offering accurate and detailed data. It features an extensive array of reporting tools that show every aspect of your inventory's journey. With just a quick look, see how many items are available, compare this season's performance to last year's, and evaluate the profitability of specific product ranges.
The system also enhances operational efficiency through its automation capabilities. It automatically generates purchase orders based on current stock levels and easily balances inventory across multiple locations. Plus, with its mobile app, you can use barcode scanning to check stock levels right from your smartphone, making inventory management more accessible than ever.
Key features:
- Sync inventory across various sales channels
- Gain insights into your inventory’s performance with detailed reports that help you make data-driven decisions
- Manage product bundles or kits, adjusting inventory components accurately
- Monitor the profitability of each product to optimize your pricing and promotions
- Set custom thresholds to receive alerts when it’s time to reorder items
Jara Moser, head of marketing at Thrive, explains how the platform helps merchants make better stocking decisions.
“Our platform provides a lot of reporting data around product sales velocity, which helps merchants make buying and pricing decisions. We also help with things like tracking supply chain timings so they don't run out of stock before they can get replacement goods received.”
3. ShipHero
ShipHero stands out for its ability to sync inventory perfectly across all channels. It provides real-time updates on stock levels, sellouts, and restocking, so you’re fully prepared, even during the busiest times.
ShipHero also has some warehouse management features. These include multi-warehouse order allocation, kitting, tracking of lots, and expiration codes. Plus, its automation tools streamline recurring tasks, making daily operations smoother.
Key features:
- Efficiently manage orders from multiple channels in one central platform
- Control your warehouse operations
- Ship multiple orders at once to save time and reduce costs
- Use barcode scanning for faster order fulfillment
- Simplify the returns process with tools that update inventory in real-time
- Access comprehensive reports to monitor performance, track shipments, and analyze inventory levels
4. Veeqo
Veeqo lets retailers manage, fulfill, and report on orders from one platform. It’s a top choice for businesses that want to manage multiple channels in one central place.
Key features:
- Automatically sync inventory levels across Amazon, eBay, Shopify, and other channels
- Manage shipping directly from Veeqo
- Streamline order processing from start to finish
- Optimize your warehouse operations with tools for speedy picking and packing
- Access powerful reporting tools to track sales performance and forecast future inventory needs
- Manage your inventory and orders on the go with Veeqo’s mobile app
5. Zoho Inventory
Zoho Inventory simplifies managing inventory and fulfilling orders for retailers already using Zoho’s broader tool suite. It's perfect for those who need solid functionality and ease of use.
Key features:
- Integrates with Zoho CRM and Zoho Books
- Automatically updates stock levels when sales are made
- Manage multiple warehouses
- Optimize inventory distribution based on demand and location
- Track shipments directly from your inventory management system
Choosing the best system for your business
The right cloud software does more than give you a reason to delete that messy spreadsheet. It optimizes your inventory management process to save time and prevent frustrating stockouts.
Choosing the right cloud-based inventory management system can differentiate between happy customers or chaotic manual inventory control that struggles to keep up with demand.
Cloud-based inventory management FAQ
What are the benefits of using a cloud-based solution for inventory management?
- Accessibility: With an internet connection, you can access your inventory data from anywhere. Whether you're at home, in the office, or on the go, your inventory information is just a few clicks away.
- Cost efficiency: Cloud-based systems usually have lower upfront costs than traditional software. You typically pay a monthly fee instead of a large one-time purchase, and you don’t need to invest in hardware like servers.
- Real-time updates: Your inventory levels update in real time, which helps prevent overstocking or running out of items. This means you can match customer demand.
- Scalability: As your business grows, a cloud-based system can easily grow with you. You can add more storage and features, or even integrate with other tools without significant disruptions or costs.
What is the best program to keep track of inventory?
For Shopify merchants, Stocky is the top choice. It integrates seamlessly with your Shopify store, making it easy to manage purchase orders, forecast demand, and track stock levels directly from your Shopify dashboard.
Is ERP an inventory management system?
What are the four types of inventory management systems?
- Perpetual inventory system: This system keeps a continuous track of inventory levels, updating in real-time as items are bought and sold. It provides up-to-date inventory information at any moment, which is great for businesses that need precise stock details.
- Periodic inventory system: Unlike perpetual systems, periodic inventory systems update inventory levels at specific intervals, such as weekly or monthly. This system is simpler and may be used by smaller businesses that don't require real-time data.
- Barcode systems: These use barcodes to manage inventory more efficiently. Scanning barcodes to track stock movement helps in reducing errors and speeding up inventory audits.
- RFID systems: Radio Frequency Identification (RFID) systems use tags to track inventory. These tags can be scanned from a distance, making it easier to manage large volumes of stock and automate tracking processes.
