5 inventory management best practices that help you avoid overselling

As your business grows, your inventory will as well. Effective and streamlined inventory management will become increasingly important as you serve more customers. If you oversell your products, you’ll soon find yourself with shortages … and disappointed customers.

The solution is careful inventory management — a task both demanding and necessary. You might have thousands of products to keep tabs on in multiple locations. You may be selling them simultaneously, both online and in person. To keep track of all this, you need a full-surround, real-time view of your inventory.

Here are five best practices to help you avoid overselling so you can keep your customers smiling.

Why overselling is so detrimental to business

Providing customers with what they want, when they want it is the cornerstone of a successful business. Without that baseline ability, your business will be dead in the water. For this reason, you must avoid overselling. Make this idea your business’s north star, especially in growth phases.

 Be explicit about making this your goal because overselling can happen easily if you let your guard down. It may happen because of miscounting, sloppy recordkeeping, lack of automatic alerts for restocking, or misalignment between your brick-and-mortar Point-of-Sale (POS) system and your eCommerce platform. 

Analyze how quickly your items sell

Having your finger on the pulse of your product sales is essential to avoid overselling. Using metrics and reporting such as velocity, forecasting, and replenishment help you see clearly how fast each product is selling and predict when it’s time to restock.

Analyzing your sales can also mean identifying the items that generate the most revenue and how fast they sell. It’s likely that 20 percent of your inventory makes up 80 percent of your revenue, so you should pay extra attention to that 20 percent, especially if those products sell quickly. You can focus on stocking more of those items while keeping the other aspects of your inventory leaner.

Sync inventory when selling on multiple platforms or locations

Many companies today are selling through multiple channels, including eCommerce and brick-and-mortar stores. All your channels should be connected. For example, your inventory from the Square POS in your store needs to automatically sync with your Shopify store, and vice versa. Real-time syncing allows your system to track inventory changes minute-to-minute across both systems.

Inventory management tools that sync your POS and eCommerce platforms can help companies implement available-to-promise (ATP) supply chain management. ATP is a type of inventory analysis that helps businesses forecast how much inventory of certain types they should have on hand at any time for any particular channel. It’s a way to stay lean without overpromising and is particularly useful for businesses that sell through multiple channels.

Set up low-stock alerts

The tools you use for inventory management should provide you with alerts indicating that your stock is running low. Failing to set up such notifications is a major error and will likely result in disappointed customers. 

Alerts help you see ahead of time what inventory needs replenishment, so you have time to get more stock on the shelves before it’s all out. Inventory analysis that forecasts how fast items sell can help you know when you’ll need to receive such alerts.

Gain a holistic view of your inventory

One of the biggest problems with selling through multiple channels is the potential to sell the same product to two different people, one right after the other. This can happen when the system you’re using isn’t maintaining a single source of truth about what is in stock.

It’s vital to have one source of truth that all of your inventory syncs to — whether that be your eCommerce platform or your POS system. Inventory management solutions like SKU IQ allow you to choose which source should be the ultimate arbiter of your available inventory.


It’s a tricky business ensuring that your inventory is properly accounted for and ready to satisfy your customers. Doing so requires some comprehensive tech tools and a few core principles.

If you prioritize having enough stock, you’ll see the logic of analyzing your inventory movement patterns, syncing up your sales platforms and systems, setting alerts to help you manage to restock, and establishing a single source of truth for your inventory-management process.

Following those guidelines will help you develop and maintain a strong and growing base of satisfied and loyal customers.

Experience effortless inventory management! Connect SKU IQ today and start syncing your Point-of-Sale with your eCommerce account.

Sign up, it’s FREE!

Experience effortless inventory management! Connect SKU IQ today and start syncing your Point-of-Sale with your eCommerce account.

Sign up, it’s FREE!