Inventory Counting for Ecommerce Brands: How to Maintain Accuracy and Avoid Stockouts

Executive TLDR

Accurate inventory counting is essential for ecommerce brands to prevent stockouts, overstock, and costly order errors. Miscounts can lead to lost revenue, delayed shipments, and unhappy customers. This article breaks down practical approaches to inventory counting, from cycle counts to full audits, and explains how a centralized 3PL can make the process efficient and reliable.

We cover best practices, common mistakes, and actionable steps to implement a consistent counting process that supports scaling operations. You’ll learn how to leverage reporting, technology, and team training to keep inventory accurate in real time.

If you already know you need better inventory visibility, you can start the conversation here,
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Table of contents

• Why Accurate Inventory Counting Matters
• Story: How Lunara Beauty Improved Inventory Accuracy
• Different Inventory Counting Methods
• Best Practices for Regular Inventory Counting
• Leveraging Technology and Reports
• Training Your Team for Accuracy
• Monitoring and Adjusting Inventory Processes
• Inventory Counting FAQs

Why Accurate Inventory Counting Matters

Inventory inaccuracies can create a chain reaction that impacts fulfillment, customer experience, and financial reporting. Common pain points include:

• Stockouts that delay shipments and frustrate customers
• Excess inventory tying up cash flow and storage space
• Incorrect order fulfillment leading to returns and chargebacks
• Misleading reporting that affects purchasing and forecasting decisions

Understanding where errors occur and implementing a consistent counting strategy reduces these risks.

Story: How Aurora Glow Improved Inventory Accuracy

Before

Aurora Glow, a mid-size cosmetics brand, experienced frequent discrepancies between their online stock levels and warehouse inventory. Customers placed orders for items that were out of stock, resulting in cancellations, support tickets, and negative reviews.

Pain Points

• Stockouts during promotions, hurting sales and reputation
• Time-consuming manual adjustments to orders and inventory records
• Lack of reliable reporting to inform purchasing decisions

The Shift

By partnering with PFS, Aurora Glow implemented a combination of daily cycle counts for high-volume SKUs and full inventory audits quarterly. They integrated their ecommerce platform with real-time inventory reporting and trained the warehouse team to follow standardized counting procedures.

The result was improved inventory accuracy, fewer order errors, and the ability to confidently plan promotions and replenishment.

Different Inventory Counting Methods

Several approaches can help maintain inventory accuracy:

• Full Inventory Counts: Counting all items at once, typically done quarterly or annually.
• Cycle Counting: Counting a subset of SKUs on a regular schedule to identify discrepancies quickly.
• Spot Checks: Random checks for high-value or frequently moved items to prevent unnoticed errors.
• ABC Analysis: Prioritize counts based on SKU velocity and value – A items are counted more frequently than B or C items.

Combining methods often provides the best balance between accuracy and operational efficiency.

Best Practices for Regular Inventory Counting

• Establish a routine schedule for counts and audits
• Use standardized labeling and storage locations for easy tracking
• Document discrepancies immediately and investigate root causes
• Ensure counts are conducted by trained, dedicated staff
• Integrate counting results into forecasting and purchasing decisions

Internal link: See our warehousing and storage solutions for optimized organization that simplifies counting.

Leveraging Technology and Reports

Inventory management software and integrations allow ecommerce brands to:

• Update stock in real time across multiple sales channels
• Track SKU movements and lot numbers
• Generate reports for cycle counts, spot checks, and audits
• Identify discrepancies quickly and automate alerts

Internal link: Learn about our real time information dashboards for actionable inventory insights.

Training Your Team for Accuracy

• Develop clear standard operating procedures for counting
• Train staff on scanning, labeling, and storage protocols
• Conduct refresher training and cross-checks to maintain consistency
• Foster accountability through performance metrics

Monitoring and Adjusting Inventory Processes

• Review inventory accuracy KPIs regularly
• Investigate recurring discrepancies and adjust procedures
• Adjust cycle count frequencies based on SKU velocity
• Leverage analytics to inform purchasing, storage, and fulfillment strategies

Inventory Counting FAQs

How often should I count my inventory?

High-volume SKUs should be counted daily or weekly through cycle counts. Full counts can be done quarterly or annually.

What is the difference between stocktaking and cycle counting?

Stocktaking is a complete inventory count at a specific point in time, while cycle counting regularly counts subsets of inventory for ongoing accuracy.

How can I prevent recurring inventory discrepancies?

Use standardized procedures, train staff, leverage technology, and monitor KPIs to identify and correct errors quickly.

Should I integrate inventory software with my ecommerce platform?

Yes, real-time integration reduces errors, synchronizes stock across channels, and improves forecasting and reporting.

Can a 3PL help improve inventory accuracy?

Absolutely. A 3PL with robust warehousing processes, trained staff, and integrated reporting can streamline inventory counting and reduce errors.