How do I track inventory for my online store?
Your e-commerce platform tracks what sold. Your accounting software needs to track what those sales cost you. The two systems need to talk to each other, or you’re doing manual data entry that will eventually fall behind.
Most online store owners start by connecting their sales channel to QuickBooks or Xero. Shopify, Amazon, WooCommerce, and others have direct integrations or use apps to sync orders. This gets revenue recorded automatically. But revenue is only half the picture.
Proper inventory accounting requires tracking your cost of goods sold. When you sell a product for $50, you need to know what that item cost you to buy or make. That cost moves from inventory on your balance sheet to COGS on your income statement at the time of sale. Without this, your profit numbers are meaningless.
Pick an inventory valuation method and stick with it. FIFO assumes you sell oldest inventory first. Weighted average smooths out price fluctuations across all units. Either works for most online stores. What doesn’t work is changing methods randomly or tracking inconsistently.
For multi-channel sellers, inventory sync becomes critical. If you sell on Amazon, your own website, and wholesale, all three channels pull from the same inventory pool. A tool like Cin7, Ordoro, or even basic inventory features in QuickBooks can prevent overselling by keeping counts accurate across platforms.
Don’t forget landed costs if you import products. The price you pay your supplier isn’t your true cost. Add shipping, customs duties, and broker fees to get the actual cost per unit. Underestimating landed costs means overestimating margins on every sale.
Physical counts still matter even when software tracks everything. Run a count quarterly at minimum, monthly if you have high volume. Discrepancies happen from damaged goods, returns processed incorrectly, or simple receiving errors. The count keeps your system honest.
The challenge with e-commerce inventory isn’t the concept. It’s getting all the pieces connected and working together. Your sales channels, inventory management, and accounting software need to sync reliably. When they don’t, you end up with Scottsdale bookkeeping that looks fine on the surface but doesn’t actually tell you which products make money.
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