What Is Stock Control? Expert’s Guide for eCommerce Sellers
Product management is the key to success for an emerging or new online business. Now that online shopping is slowly becoming a trend, prompt fulfilment of customer demand is paramount. This is where order fulfillment and stock management come into play. It’s the force that will drive your online business, preventing customer frustration and boosting your bottom line. A lack of understanding about stock control can hamper e-commerce sellers’ reputations. Let us learn what is stock control and how it can help improve e-commerce business. What Is Stock Control? Stock control, also known as inventory control, is the simplest measure of stocks going in and out of your business. It means to have the right products, in the right quantities, at the right time, and with minimum storage costs. AAn efficient stock control system will allow you to track a product from when it enters your warehouse logistics process until it is supplied to the client. The consequences of not doing this well are significant – retailers lose an estimated $1.1 trillion globally due to poor inventory management and out-of-stock items alone. This highlights that a solid stock control strategy is essential for businesses, especially, e-commerce sellers. Key Elements of a Stock Control System The efficient stock control system contains several dependent variables, all critical in maintaining a healthy stock. These include: Inventory Tracking This is the basis of any stock movement. It is an elaborate way of keeping track of all the products you hold in stock, their whereabouts, quantity, and status. Several modem companies use stock control software with barcodes or RFID tags to automate this process. This enables real-time visibility and assists in evading human error. Also, real-time tracking enhances the efficiency of the given business. Demand Forecasting Demand forecasting is knowing what demand your customers will have for your product. Given shopping patterns during Black Friday, Cyber Monday, and the Australian holiday seasons, demand forecasting applies to Australian online shops. You can project demand through the study of past sales records, market trends, and upcoming promotions, and then have proper stock control procedures in place so you can fulfil orders with an accurate delivery lead time. Order Management This aspect focuses on how you handle customer orders. It’s the link between a customer’s purchase and the warehouse. An efficient stock control system automatically updates inventory levels when an order is placed, preventing overselling. Moreover, it can streamline the picking, packing, and shipping processes, ensuring orders are fulfilled quickly. Storage Management The best store operation involves positioning your warehouse to operate as well as possible. That includes placing higher-quality carts in easy-to-reach locations and utilising innovative storage layouts. This is a critical part of inventory management that reduces the picking time to a minimum and avoids the risk of damaged or misplaced inventory. Stock Valuation This element involves assigning a monetary value to your inventory. In Australia, the Australian Taxation Office (ATO) requires companies to report their value of “trading stock” for tax purposes. Stock control methods such as First-In, First-Out (FIFO) and the weighted average method are standard methods to value stock to facilitate proper financial reporting. Regular stocktake checks are essential for accuracy. Loss Prevention Loss prevention involves minimising inventory loss caused by damage, spoilage, or pilferage. Periodic audits and an effective stock control system will allow you to catch discrepancies and trace their cause quickly. A recent study from Griffith University revealed that Australian retailers are losing almost 2% of their annual turnover due to crime, amounting to $7.79 billion annually in losses. This statistic highlights the importance of robust stock control procedures in protecting a business’s bottom line. Benefits of Effective Stock Control An effective stock control system has many advantages, directly contributing to your online business success. These are as follows: Reduced Costs The most apparent benefit is minimising cost. You don’t incur warehousing fees, insurance, and risk of obsolescence for not storing so much. Second, an effective stock control system reduces the amount of expensive last-minute shipping to complete orders, a frequent problem for most businesses. According to the Australian Bureau of Statistics (ABS), efficient inventory management contributes to broader economic health, with business inventories rising 0.8% in the March 2025 quarter, indicating active and well-managed stock flow across the economy. Improved Customer Satisfaction Nothing is more frustrating for a customer than an item out of stock after clicking “buy.” Strong stock control ensures that your products are always available, leading to faster order fulfilment and happier customers. This builds trust and encourages repeat business. Enhanced Operational Efficiency When your stock is organised where it is and easy to track, your entire operation goes more smoothly. From a cleaner, more efficient pick and pack operation to timely, accurate reports, a well-designed stock control system avoids bottlenecks and allows your staff to focus on business development. Better Decision-Making A well-developed and executed stock control system informs you of valuable items. You can tell what is selling, what isn’t, and when you should reorder. It keeps you informed so you can make sound decisions about your merchandise, advertising, and buying, which puts you ahead of everyone else. Regulatory Compliance Australian businesses must follow good stock control practices to meet tax and accounting obligations. Keeping records of your trading stock ensures you comply and are prepared for an audit. Stock Control Methods Explained No one method fits every stock control. Different approaches will suit different businesses. These are as follows: Just-in-Time (JIT) This tactic involves buying merchandise only when needed to fill consumer orders. A perfect example of inventory management is a company placing a customer’s order and subsequently ordering from their supplier for immediate transportation. JIT eliminates storage charges and tied-up capital. Fixed-Order Quantity It is a basic technique where you buy a predetermined number of units of a commodity whenever your stock dips to a given level. For example, a company can buy 50 units of the most sought-after product whenever its stock is at 20 units. It can be easily