The process of tracking, ordering, and optimizing stock levels to meet demand without overstocking.
Inventory management encompasses all the processes, systems, and decisions involved in maintaining optimal stock levels: how much inventory to hold, when to reorder, how to track it across locations, and how to minimize carrying costs while avoiding stockouts. For brands using 3PLs, inventory management spans both the brand side (deciding when to replenish) and the 3PL side (accurately tracking what's in the warehouse).
Key inventory management metrics: inventory turnover (how often your full stock cycles in a period), days of inventory on hand (how many days of sales your current stock covers), stockout rate (how often items are unavailable for orders), and shrinkage (inventory lost to damage, theft, or error).
Common inventory management strategies: just-in-time (JIT) — ordering only what you need close to when you need it; and safety stock — maintaining a buffer above expected demand to protect against supply chain delays. eCommerce brands typically maintain 30-60 days of inventory at their 3PL, depending on their supply chain lead times.
Monthly at minimum; weekly for high-velocity brands. Your WMS dashboard should show real-time inventory, but discrepancies accumulate over time from receiving errors, pick errors, and damage. A monthly physical count comparison to WMS records catches issues before they become serious.
Cycle counting is a continuous inventory audit practice where the warehouse counts a portion of inventory each day or week — rather than doing one annual full count (which requires shutting down operations). Top 3PLs use cycle counting to maintain near-perfect inventory accuracy without operational disruption.
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