Inventory management, stock control, order processing… exciting right?

So I know this will not set the hearts racing of the growing entrepreneur, and let’s be honest, this is not a traffic magnet topic for Google, so why talk about it?

Because it is SUCH an IMPORTANT factor for any online business and the sooner you get it right the quicker you will grow.

This is our second episode of the “Starting Ecommerce” series and we’ll go through some of the basics of inventory management and why they are important as you grow your business.

What’s in this episode?

  • SKUs what they are & why they’re important
  • Product identifiers and item specifics
  • Picking locations
  • Self-fulfilled vs 3rd party fulfilment
  • Stock control


So what is a SKU? SKU stands for Stock Keeping Unit but to you and me, it is a unique ID for that item. (Think James Bond and 007)

I have seen many people use their suppliers code, item barcodes or even worse, letting Amazon pre-generate a SKU for them.

It may not seem important at first but as you expand your sales through multiple channels you will need to link these to your inventory. The SKU is this link.

Your SKUs should be unique to your company and follow a format that makes logical sense to your business.

Example: AC-CS-140

I have a range of items from Acme Co, they supply me with Card Sleeves in many different designs. From the SKU above I can tell the manufacturer of the product, what category it belongs too and the allocated item number for that product. AC-CS-140 (Supplier-Category-Item Number).

If your items have different colours, sizes and styles you will want to consider diversifying your SKU layout to accommodate these attributes.

Example: AC-MS-XL-R

Using the example above we can tell by the SKU that we have an extra large, red men’s shirt from Acme Co (Supplier-Category-Size-Colour).

However you decide to write your SKUs, there are some good practices to take note of:

  • Keep it uniform – keep the SKU structures and lengths the same
  • Start with a letter – Spreadsheet software is notorious for removing 0’s and re-formating numbers
  • Don’t rely on the SKU for picking – this is what picking locations are for

Product identifiers and item specifics

GTINS, ASINS, EANs, MPNs are just some of the terms you will here as you start selling online. In recent years both product identifiers and item specifics have become such a large part of ecommerce. Though it may seem a little daunting, I have written an explanation of what they are and why you need to use them.

GTIN – Barcodes

A GTIN is basically a product barcode and can come in a variety of styles, here are some of the popular ones you will come across:

  • EAN: European Barcode
  • UPC: American Barcode
  • ISBN: Barcode for books

Other identifiers

There are also some other identifiers that popular marketplaces use:

  • ASIN: Amazon’s own internal product identifier
  • MPN or  Mfr Part Number: This is the manufacturers part number

Typically when listing new items, you will need to provide a barcode and the MPN.

Item specifics

So what do we mean by item specifics? These are the details and attributes of the product, and depending on what product you are selling they can vary accordingly.

For example, in clothing you will have:

  • Size
  • Colour
  • Material
  • Gender

If you are selling Toys then you have certain specifics such as:

  • Recommended age
  • Batteries required
  • Brand

Items specifics are not just important for the consumer but they are crucial parts in the major marketplaces search engines and filtering. They also play an important part in both SEO for Google and a core part of your Google Shopping Feed.

As voice search becomes more mainstream with the introduction of Alexa, Siri and Google Home, items specifics will be a uniform way of the consumer filtering their options when interacting via voice.

Picking locations

Most starts up will be running their businesses from a spare room or a garage. If that sounds like you then you probably have a mental map in your head of where every product is located.

Power to you but when you begin to expand, move to a new premises and hire staff, do you really want to be asked on every order where a product is?

Picking locations allow you to optimise the way you pick orders by taking the knowledge out of your head and putting it in front of the person picking the order.

To get the most out of pick locations, you will not want to pick orders individually but rather in batches. By using pick lists this stops the need to going back and forth to the same place in the warehouse multiple times.

Reducing the number of steps in your warehouse is key, once you have accumulated enough orders you will have the data to see what your popular products are, organise your warehouse and move these products close to your packing station.

Some Top Tips

  • Keep picking locations simple
  • Move fast moving lines close to packing area
  • Print pick lists sorted by Pick Location

Margin is key in ecommerce and this is the one area where you have the majority of control to optimise and reduce costs by simply inputting processes.

Self-fulfilled vs 3rd party fulfilment

When it comes to fulfilment in Ecommerce the world is your oyster, buy oyster can be expensive. There are several routes you can take to fulfilling orders.

The first one is that you can fulfil your orders from your premises, another popular option is to outsource the fulfilment to a specialist 3rd party company that will hold your stock and ship your items for a charge.

There is even the opportunity to dropship your orders directly from your supplier or if you sell on Amazon you can use Amazon’s own fulfilment service called FBA (fulfilment by Amazon).

Self-fulfilled or Merchant fulfilled

Self-fulfilled fulfilment is where you store the products, pick the products, pack the order and choose which courier they go with.

Pros: You have complete control of the order lifecycle, from the order coming in, to how it’s packed, to which courier it is shipped with.

You have the opportunity to implement processes to drive down costs and increase the overall efficiency.

Cons: Overheads of having a physical location and the fact that you usually have to purchase stock before you can sell it.

3rd party fulfilment centres

3rd party fulfilment centres are businesses that have been set up to dispatch other companies orders. You send the 3rd party fulfilment centre your products and they take care of the whole warehouse process, from storing to shipping.

Pros: You don’t need to pick, pack or ship the order. You don’t need to worry about hiring warehouse staff or even getting a warehouse.

Cons: You will be charged for the storage of your products, packing of the orders and the cost of shipping. You also have limited control in that process.


Dropshipping is where you list/advertise your suppliers products, when you make a sale you send your orders to your supplier who will deliver it directly to your customers.

Pros: Only pay for the stock you have sold, no need for large overheads.

Cons: Margins are tighter, competition is higher and you have to trust your supplier with your reputation.


FBA is fulfilment by Amazon, in a nutshell it is a 3rd party fulfilment centre but with added extras.

Pros: If you are selling on Amazon, then your products will be Prime eligible. It has also been known to help you win the buy box on listings.

Cons: Amazon charges for this service and some sellers don’t feel too comfortable having Amazon control of their stock. (Remember Amazon is also a retailer as well as a marketplace.)

Extra Bonus Point: If you are using FBA you can use it not just to fulfil your Amazon orders but also orders from eBay and your Website. Don’t believe me? Read More Here

Stock control

Trust me, when you start selling online, you really don’t want to oversell. It is so important to keep your stock levels up to date.

Some of you may only be selling on one channel, maybe your website or a marketplace like Amazon or eBay. But even if you are just selling on one channel right now you will have events that will affect the stock levels outside of the channels domain.

Think about it, do you believe you will never ever get a return? or give out a sample? or perhaps to open a box to find several faulty products… So even if you are starting out on one platform, having somewhere you can store your stock levels is crucial.

So to start off with create yourself a spreadsheet or even look at software to do this with (I can recommend some here).  But essentially make sure you keep your stock records up to date and run regular mini stock takes.


I hope you have found this episode insightful, exciting, no, important yes! I’ve worked with so many established online businesses and honestly, this is such a common paint point when growing. By tackling it early on will ultimately save you time, stress and money on admin tidy up your data.

So if you are a new online seller and have any questions or need advice, please comment below. If your an established seller feeling the pain, let us know. Good luck!