How to Grow Dropshipping Businesses with Stock Tracking Systems

How to Grow Dropshipping Businesses with Stock Tracking Systems

The entire dimension of international business has been transformed in this decade. After the global pandemic, the dependence on the online business has become a common thing in the entire world. In this scenario, dropshipping has become the most profitable genre of business.

One of the key points to gaining success in dropshipping is managing its inventory. That is why a genuine, comprehensive, and easy-to-use stock tracking system is needed for managing the inventory.

Read the following guide to master the process of starting a successful dropshipping business with a stock monitoring system.

Why Start Dropshipping & Why Inventory Management Matters

If you are keen to know about every important aspect of the dropshipping business, you are on the right page. Before starting to understand the significance of a stock monitoring system in the dropshipping business, it is needed to understand why it is important to start dropshipping.

Many benefits come with dropshipping, including low initial costs, flexibility, and the capacity to carry a large selection of goods without requiring physical inventory. Dropshipping companies have a lot of room to develop as more and more customers shop online.

But to realize this potential, business owners have to overcome obstacles like inventory control. As per the last update of December 2023, around 27% of businesses have adopted dropshipping sales as their primary work model. On the other hand, $85 billion of sales has been done through dropshipping around the world. This means it is one of the most lucrative businesses of this time.

So why inventory management matters in dropshipping? A successful dropshipping venture should have a strong inventory management system. Since the entire form of the industry is dependent on a prosperous inventory, it is important to have a close look at stock levels and product performance. In the case of getting a timely order fulfillment these two aspects are highly important.

Without a proper stock tracking system, dropshipping business risks stockouts, delayed shipments, overstocking, and ultimately, dissatisfied customers. Here the role of a tracking system comes into play.

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What Is a Stock Tracking System & How Does It Work

A stock monitoring system is a set of technologies, tools, and processes to monitor the inventory of a dropshipping business. The system involves activities like tracking the inventory level, monitoring the product movement, and optimizing the order fulfillment process. Stock tracking can help dropshippers to make significant decisions for their business. The entire market size of the global inventory management market was $1.98 billion in 2022. By 2030, it will grow up to $4.05 billion which is 9.6 %.

So what's its work process? Continue to read to know.

Inventory Database

In the world of inventory management, the inventory database works as the nerve center of a dropshipping business. This database contains all information about product-keeping units (SKUs), quantities available, and various other pertinent data points. This type of backbone can help the entire inventory to become comprehensively organized and accessible.

Order Management

Managing inventories effectively requires integration with order processing systems. This aspect makes sure that incoming orders and inventory levels are coordinated smoothly. Businesses can track orders in real-time, instantaneously update stock levels upon order submission or fulfillment, and keep precise records of inventory movements by linking order management systems with the inventory database. By streamlining the order fulfillment process, this synchronization maximizes inventory turnover and reduces the chance of stock-outs or overstocking.

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Barcode Scanning

In the case of tracking stocks, barcode scanning has come up like a revolution.  By providing unique barcodes to each product or SKU, businesses can effortlessly scan and track items as they move through the supply chain. Barcode scanners capture data quickly and accurately, eliminating manual data entry errors and expediting the inventory management process. Whether receiving new shipments, fulfilling orders, or conducting periodic stock audits, barcode scanning ensures precision and efficiency in tracking inventory levels.

Forecasting Tools

Predicting future demand is crucial in the ever-changing world of e-commerce to maintain ideal inventory levels and steer clear of expensive stockouts or overstocking. Advanced algorithms in forecasting tools examine a wide range of data, including historical sales data, market trends, seasonal variations, and even external variables like consumer behavior or economic indicators. Dropshipping companies can use predictive analytics to predict changes in demand, spot new patterns, and modify inventory levels as necessary.

Types of Stock Tracking Systems

Stock monitoring systems can be broadly categorized into two types: manual and automated.

Manual Stock Tracking Systems

Manual stock tracking involves the use of spreadsheets, paper records, or basic inventory management software to monitor stock levels and update inventory manually. While cost-effective and suitable for small-scale operations, manual systems are prone to human error and may become inefficient as businesses grow. For example, we can take the names of Stock books, Card systems, and Spreadsheets.

Automated Stock Tracking Systems

Automated stock tracking systems leverage technology such as barcode scanners, RFID tags, and advanced software solutions to automate inventory management processes. These systems offer real-time visibility into stock levels, streamline order processing, and enhance overall efficiency.

While initial implementation may require investment, the long-term benefits in terms of time and cost savings are significant. Barcode readers can be suggested as the best example of an Automated inventory management system.

How to Choose the Right Stock Tracking System

Choosing the right inventory management system for your dropshipping business is a critical decision that can significantly impact your operations and success. Consider these essential factors when assessing potential systems:

1. Scalability

As your dropshipping business grows, your stock monitoring system must be able to keep up with increasing inventory levels and order volumes. Ensure that the system you choose can scale alongside your business, accommodating expansions and adapting to changing demands without compromising efficiency or accuracy.

2. Integration

Seamless integration with your existing e-commerce platforms, order management systems, and other essential tools is paramount for efficient operations. Look for a stock monitoring system that offers easy integration capabilities, allowing data to flow seamlessly between systems and minimizing the risk of errors or discrepancies.

3. Customization

Every dropshipping business has unique needs and workflows. Look for an inventory management system that can be tailored to suit your specific requirements, whether it's customizing fields, reports, or workflows. A flexible system that can adapt to your business processes will enhance efficiency and productivity.

4. Cost

Evaluate the total cost of ownership, including upfront costs, ongoing fees, and the potential return on investment associated with each system. While it's essential to consider the financial aspect, prioritize value over price alone. Investing in a robust stock tracking system that meets your needs and delivers tangible benefits can yield significant long-term savings and growth opportunities.

5. Support and Trainings

Evaluate the vendor's support and training offerings. A comprehensive support system and thorough training resources can facilitate smooth implementation and usage of the stock monitoring system, ensuring that your team can maximize its capabilities effectively.

By carefully considering these factors and choosing a stock monitoring system that aligns with your dropshipping business's needs and goals, you can streamline operations, optimize inventory management, and position your business for sustainable growth and success in the competitive e-commerce landscape.

Benefits of the Right Stock Tracking System

Dropshipping companies can experience radical change with the implementation of an appropriate stock monitoring system, which provides several advantages that support their general expansion and success:

Enhanced Efficiency: A good inventory management system minimizes human error and simplifies operations by automating inventory management procedures. Order fulfillment can happen more quickly thanks to this automation, which does away with the need for labor-intensive human inventory updates and checks. Businesses that have more streamlined processes are better able to manage orders, which results in faster delivery times and happier customers.

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Real-Time Insights: Access to real-time inventory data is invaluable for making informed decisions in a fast-paced e-commerce environment. With the right stock monitoring system, businesses can monitor stock levels, track product movement, and analyze sales trends in real-time. This enables them to react promptly to changes in demand, minimize stock-outs, and optimize stock levels to meet customer needs effectively. Real-time insights also facilitate better inventory forecasting, helping businesses avoid overstocking or understocking situations.

Enhanced client Satisfaction: Providing outstanding client experiences requires prompt order processing and precise inventory information. Businesses can guarantee accurate and timely order fulfillment with a strong stock monitoring system in place, which will boost customer satisfaction and encourage repeat business. Clients value prompt and error-free order delivery, which promotes customer loyalty and good word-of-mouth recommendations.


Effective inventory management remains paramount for success in this competitive arena. A robust inventory management system is essential, enabling businesses to monitor stock levels, streamline order processing, and provide exceptional customer service.

By leveraging technologies like barcode scanning and forecasting tools, dropshipping companies can enhance efficiency, gain real-time insights, and ultimately boost client satisfaction. After reading the guide, hope you can choose the right stock tracking system to align with specific business needs and goals.

For further inquiries and to explore more about dropshipping business strategies, visit the DSers blog today.

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