For many small and medium-sized businesses (SMBs), finding inventory equilibrium amidst market chaos may be akin to finding a needle in a haystack. But finding this balance between stock and demand is critical, especially for SMBs who are often working against headwinds to protect profit margins. Since the start of the year, businesses across industries have been trudging through the continuation of unprecedented times. Marked by fluctuating tariff policies and trade wars, skyrocketing costs, and supply chain disruptions, today’s marketplace is a volatile space, and smart, proactive approaches to navigating this uncertainty are required.
A recent report from the National Federation of Independent Businesses (NFIB) highlighted that managing inventory is a key concern for the majority of small businesses in the U.S., as is managing higher costs. In fact, according to data from Katana Cloud Inventory, 89% of manufacturers reported increased costs due to tariffs earlier in the year. Since then, many SMBs have tried to get ahead of the tariff-induced supply chain disruptions by intentionally overstocking. While it may have worked as a short-term fix, inventory is now dwindling, and consumer demand is continuing to fluctuate. This has left many SMBs asking the question: How can I manage my inventory for the long haul? The answer is utilizing advanced tools for integrated inventory management.
Finding the sweet spot for inventory
Inventory management tools are no longer just for Big Box retailers or large enterprise businesses. Today, there are cloud-based inventory management systems that are tailor-made for SMBs to help them get their products to customers faster, regardless of company size or industry. These tools are crucial for navigating today’s challenging marketplace, as they can help keep the business from overstocking, which eats up cash and increases risk, and understocking, which could lead to missed orders and unhappy customers.
With inventory management tools, business owners get a real-time view of inventory across every sales channel and location so that they can make better, data-driven decisions. For SMBs with an omnichannel strategy or multiple manufacturing or warehouse facilities, this holistic oversight can be a game-changer. Stock imbalances and delays can feel unavoidable without the right tools to track movements and fulfillment.
Take Peace Collective, an apparel manufacturer that uses an on-demand manufacturing model. It was impossible for the team to track and fulfill orders using spreadsheets, pens, and paper. With integrated inventory management tools, they could access the data that they needed to keep operations running smoothly.
Another benefit of inventory management software is centralized data. Historical data can be used to predict future demand and also help differentiate between low and high demand items so that businesses can proactively manage procurement. With smart replenishment strategies, businesses can automate reordering and set stock safety levels to avoid running out of in-demand items. Connected inventory management takes the guesswork out of many business-critical decisions, helping to not only safeguard profits but also optimize workflows.
Integrated inventory management for operational continuity
Inventory is at the heart of many businesses, from retail to manufacturing, so using inventory management software as a single source of truth often makes the most sense. With a tool that allows businesses to integrate applications that they already use day-to-day, such as Intuit QuickBooks, Shopify, or HubSpot, they can unify processes for a cohesive experience across the board. There’s an immediate advantage to building a custom tech stack that’s tailored to the unique needs of the business, rather than trying to fit operations into an off-the-shelf system.
Seamless connectivity across procurement, sales, accounting, and customer management further enhances the value of the data that allows for informed decision making. For example, businesses can instantly adjust pricing or shift to a new supplier in response to tariff-related cost changes. This constant flow of data helps keep operations running smoothly across platforms while also reducing lag time and minimizing errors. When new challenges arise or the business seeks to scale, connected technologies can help maintain workflows and protect profits.
In the face of uncertainty, put proactive approaches into action
While integrated inventory management tools allow SMBs to streamline operations, optimize workflows, and stay agile, navigating continued market uncertainty often requires smart, proactive approaches to stay afloat. For example, relying on one supplier can leave SMBs in the lurch when their supply chain comes to a halt. With a robust inventory management system, you can practice holistic supplier management in real time—tracking and comparing supplier performance and cost, negotiating with alternative suppliers using historical data and quickly onboarding new suppliers to keep your business moving.
Fickle consumer behavior also requires proactive demand forecasting to manage inventory. Data from Katana also showed that consumers have been purchasing more, with a 7% increase from May to June in sales order volume. That’s a big jump to manage without the help of technology to streamline data. Or consider when products go viral, like the recent Labubu Doll craze that’s taken over shopping carts. Data from an integrated platform could help sellers track and manage sales in real time so that customers aren’t receiving out-of-stock notices once they click add to cart. With an integrated inventory management system, SMBs can analyze past sales, orders, and market trends to make more accurate procurement predictions.
In short, when buyer behavior shifts on a dime, SMBs can rely on their tech stack to help them match the real-time shift in demand. When planning for sales or seasonal demand, data-driven decisions can help SMBs adjust prices based on expected spikes or slowdowns. This is critical ahead of the 2025 holiday sales season, which is sure to bring peaks and valleys for SMBs who typically rely on a strong fourth quarter. A robust inventory management platform enables business owners to quickly and accurately capture changes, allowing them to plan accordingly. By investing in connected inventory management tools and practicing proactive strategies, SMBs can turn uncertainty into opportunity.
Ben Hussey is the co-CEO of Katana Cloud Inventory, an inventory management platform that helps companies manage over $3 billion in sales annually. Ben has led many successful sales and revenue teams, helping businesses enhance their e-commerce, manufacturing, inventory, and order management capabilities while delivering amazing customer experiences.
In addition to these roles, Ben spent a decade working for a large telecommunications company, leading commerce initiatives of varying sizes and types—from initiation to delivery and run-time. He’s passionate about the impact software can have on a business and working with high-performing teams to deliver results.
Photo courtesy Aakash Dhage for Unsplash+
