What Is an Inventory Management System?

An inventory management system (IMS) is software designed to reduce logistics complexity, prevent overselling, and ensure inventory accuracy.

If you’re running an ecommerce or wholesale business, controlling inventory isn’t optional — it’s essential. Yet, according to a recent survey by fluentcommerce, 58% of retailers and direct to consumer (D2C) brands have less than 80% inventory accuracy— and it’s easy to see why.  

Multichannel ecommerce sellers are responsible for maintaining accurate inventory everywhere, at all times, which is nearly impossible with manual or paper-based processes. So, what is an inventory management system? 

An inventory management system is software that gives you the tools to track, control, and optimize your stock across all your sales channels and warehouses. It helps you avoid overselling, underselling, or wasting time manually reconciling inventory across platforms. 

At its core, an IMS provides a high level of visibility and control in inventory management. A best-in-class solution gives you real-time insight into where your products are, what’s available to sell, and what needs to be replenished, plus key performance metrics to make the best decisions for your business. 

An inventory management systems helps you: 

• Sync inventory in real time across all channels 

• Automate stock updates and low inventory alerts 

• Forecast demand and reorder efficiently 

• Improve customer experience through faster and more accurate fulfillment 

When your inventory is accurate, your business can move faster — with fewer errors, fewer returns, and less time spent fixing problems. That accuracy flows into every part of your operation, from purchasing to fulfillment to customer support. 

Inventory management is a critical aspect of running a profitable ecommerce business because without it, you risk overselling, fulfillment delays, or tying up too much capital in unsold goods. That’s why purpose-built inventory management software is critical to scaling your operation. 

Ecommerce businesses face unique inventory management challenges: 

• You’re selling on multiple marketplaces with different order volumes and rules 

• Inventory lives in multiple locations — maybe even with 3PLs 

• Demand fluctuates constantly, and customer expectations are sky-high 

Without a centralized inventory system, businesses quickly hit a wall. We hear these stories all the time at Descartes when people start looking for solutions. Manual spreadsheets and disconnected tools might work at a small scale, but they can’t keep up with modern fulfillment expectations, especially when selling across multiple channels. 

Take Bambi Baby, for example. As a leading retailer in the juvenile products space, their business runs across multiple platforms — including their own Magento site and marketplaces like Amazon. Before implementing the Descartes inventory management system, they struggled to manage listings and inventory across systems. By centralizing their inventory, orders, and product content in one place, they dramatically reduced fulfillment errors and improved operational efficiency. Today, they move tens of thousands of SKUs with confidence, even during peak seasons. 

Or consider Golf Superstore, who moved from a retail-focused point-of-sale (POS) system to a true multichannel inventory platform. They needed a solution that could scale with growing demand, sync inventory in real time, and support their presence on Amazon, eBay, and their Shopify store. With Descartes, they now manage everything from purchasing to shipping in a single, streamlined system — and most importantly, they’re growing without adding headcount. 

When evaluating inventory management solutions, you really need to look at the features and use cases to know what will meet your business’ needs. Multichannel ecommerce sellers and mid-sized wholesalers or distributors need robust inventory management features like these to reduce complexity: 

When it comes to inventory visibility, you need a single source of truth. A modern solution that connects all your sales channels and warehouses so you can see inventory levels in real time — no matter where stock is sitting or orders are coming from. 

Whether you’re selling on marketplaces like Amazon and eBay or running a Shopify store, the software should automatically update your sales channels’ available inventory to prevent overselling and out-of-stock issues. 

Track supplier relationships, generate POs, and automate reordering based on thresholds you define. Historical data and forecasting tools help you buy smarter. See how to create purchase orders using an IMS. 

From bin-level tracking to barcode scanning and mobile picking, a good IMS includes the tools needed for accurate and efficient fulfillment. 

Learn how to create and sell product kits and bundles while managing underlying inventory accurately — no more manual adjustments or inventory mishaps. 

Some inventory reporting dashboards give you visibility into stock velocity, aging inventory, and demand forecasting to enable smarter decision making. Others provide a transparent view of inventory’s fiscal impact. Many dashboards and reports are customizable.

A strong IMS doesn’t just track inventory — it orchestrates your entire post-purchase flow: 

• Order management: Route and fulfill orders from all your channels in one place. 

• Shipping: Print labels, rate shop, and track deliveries across carriers. 

• Multichannel listings: Keep product listings consistent across marketplaces, with up-to-date pricing, descriptions, and availability. 

Descartes Sellercloud delivers all these capabilities in a unified platform, so sellers don’t have to juggle multiple systems or plug-ins. As we’ve seen with customers like Bambi Baby and Golf Superstore, this kind of integration becomes a game-changer as your catalog and order volumes grow. 

The market is full of options, but not all are built for the complexity of multichannel ecommerce. Choosing the right one starts with understanding your needs. 

Look for a platform that offers: 

• Native integrations with major marketplaces, 3PLs, and carts 

• Real-time inventory sync as orders come in 

• Configurable workflows and business rules 

• Support for multichannel listings and fulfillment 

• Built-in analytics to optimize performance 

Ultimately, the right system should reduce manual effort, improve accuracy, and scale with your business. Whether you’re shipping 100 orders a day or 10,000, your IMS needs to keep up — not slow you down. 

• An inventory management system helps ecommerce sellers track, control, and optimize stock across all channels. 

• Centralized visibility, multichannel syncing, automated reordering, and warehouse tools are essential. 

• Best-in-class platforms also support order management, shipping, and multichannel listing management. 

• Brands like Bambi Baby and Golf Superstore have scaled efficiently and improved inventory accuracy by centralizing operations. 

• The right solution aligns with your business complexity, not just your current size.