Inventory Management Software:
Comparison of the 10 Best Inventory Management Systems for E-Commerce Retailers in 2025

Thanks to exponentially growing technological progress, it is now possible to automate repetitive processes in numerous areas of our lives. For your online business, this automation can lead to significant cost savings, reduce potential errors when exporting and transferring data, and even become a core competency that can be used as a competitive advantage.

As soon as your online shop or online marketplace evolves and grows, more and more additional requirements and challenges regarding its operation arise. In succession, the degree of complexity and the size of the webshop determine the difficulty from a management perspective. Large online retailers like Amazon or eBay cannot respond to their customers’ demands without multi-layered internal processes and automation. They could collapse in a short time if their key competitive advantages – the automated cost structures and the fast supply management chain – are compromised.

To operate as effectively and efficiently as possible in internal processes and coordination, so-called ERP systems are used. ERP stands for Enterprise Resource Planning, software for centralizing various business processes and workflows across several areas along the supply management chain. Through its automation, time- and cost-efficient management is enabled.

A related term is also inventory management system, with the difference between the two lying in the scope of functionality. While an inventory management system focuses on disposition and logistics processes, an ERP system has multiple interfaces with other company areas such as controlling or human resources and is therefore a more comprehensive complete solution.

For understanding, it is first worthwhile to see how an inventory management system actually works. In broad terms, the goal is a smooth process for all order transactions on the website – from the order to the delivery. Such a system first automates the processes that occur during a purchase on your online shop – after the purchase is received, a confirmation is sent to the customer. In the next step, a delivery note and the invoice are sent, etc. This information is then passed on to the next stage along the supply chain.

At the same time, such software monitors the stock levels and enables efficient utilization of the warehouse. With an inventory management system, you are kept up to date and can check the availability of specific products at any time. Just-in-time deliveries and other cost- and time-reduction potentials are in the foreground, which have a decisive influence on the net result. The inventory management system facilitates the exchange of information and can also provide valuable key figures, statistics, and data that can then be used for strategic optimization.

COMPARISON OF THE BEST INVENTORY MANAGEMENT SYSTEMS

Online Shop Integration

An inventory management system must first be integrated with your existing online shop. A key requirement when choosing this system is its technical compatibility with your online shop system. Sometimes third-party systems (the so-called middleware) or special interfaces are necessary for integration. For retailers who have not yet decided on a shop system, it might also be advisable to consider the choice of an inventory management system at this point. Some all-in-one solutions are also available on the market, although their flexibility may be somewhat limited.

There are two types of ERP modules – an on-premise infrastructure or a cloud-based solution. In the first case, as the name suggests, it is about a local, standalone system structure on your own server with more control, but higher costs and complexity in setup.

In the second case, however, the integrated data is hosted on a server by a third party, making integration easier and overall less problematic. Cloud-based solutions make the use of an ERP or inventory management system accessible for smaller businesses due to their low setup costs as well as the division and predictability of future expenses, while the on-premise variant requires a higher initial investment and is more suitable for larger companies.

Just like when choosing a suitable shop system, there is no one-size-fits-all solution. Rather, this decision is determined by your own future goals and company structures. Small businesses and startups can do without an inventory management system in the initial phase, but in the long term, they should plan to integrate one. At the same time, there are naturally some providers that consistently earn a high level of trust. This is no coincidence. We will take a closer look at these systems. Many of these providers have developed a complete solution in the form of an ERP system, which is of course well suited for the purposes of inventory management.

Note: If you are interested in online shop development or the development of an online platform or web portal, please take a look at our offer.

The Best Inventory Management Systems for E-Commerce Retailers

JTL WaWi

Not surprisingly, JTL ranks at the very top of all inventory management systems in our list – especially in the German market, JTL has established itself as one of the most popular providers for small and medium-sized online retailers, shops, and marketplaces. The system encompasses all common processes that occur in online trade related to inventory management.

JTL strives every year to add value to its software products and improve them, as well as to respond to market challenges. There is regularly an annual JTL trade fair where the news about their new products is presented. For the WaWi software, numerous improvements are explained in several areas such as article management, shipping, information management, statistics, warehousing, payment processing, to name a few. Especially for logistics processes, JTL has tried to implement significant improvements. The in-depth approach, long-standing experience, and a high number of satisfied customers are proof of their dedication. The software can be seamlessly integrated with some of the leading shop systems in Germany like WooCommerce, Prestashop, Oxid, and Shopware with the help of the JTL Connector. Additional interfaces to Amazon and eBay are also available at attractive prices. JTL WaWi is even free in its remarkably deep functionality – highly recommended!

Plentymarkets

Another provider, which like JTL focuses on online trade and is regarded as one of the market leaders in Germany, is called Plentymarkets. Their ERP software and subscription plans are very flexible and adaptable with regard to the size of the company and are suitable for both small and larger companies. They offer an all-in-one solution; the online shop system is fully integrated with the inventory management system. Like JTL, Plentymarkets supports you in all essential areas around inventory management and automation for a good price and also offers interfaces for integration with Amazon and eBay. The omni-channel sales can be controlled seamlessly – over 40 marketplaces can be accessed and managed through one central system. A 30-day trial period ensures that you can gain initial experience with operating the software.

A special advantage of Plentymarkets is the large community, which, like open-source based online shop systems, is a very extensive source for problem solving and troubleshooting. In an open community, improvement potentials are recognized and exploited more quickly by users. The numerous online resources in the form of manuals, videos, webinars, etc. can answer many questions. The only disadvantage would be the rather complex operation and setup, which is associated with additional costs for specialists.

Pixi

A third German provider with a complete ERP solution and multichannel integration is Pixi. Pixi is an important provider among the already mentioned inventory management systems and shows no functional shortcomings compared to the others. A widespread network of partner service providers offers numerous possibilities for connecting to interfaces as well as a mature interface architecture. Pixi claims an even deeper expertise in connecting to third-party systems than the other competitors. However, they are not willing to quote a flat rate for the license costs – this must be arranged individually and can vary greatly depending on the scope of the project.

We recommend Pixi for rather more complex projects, where the long-term goals are known, a high value is placed on interface integration, and sufficient financial resources are available.

Faktura XP

Another provider from Germany, which has been dealing with database applications, inventory management systems, and ERP software for more than 18 years, is called Faktura XP. Since its launch 10 years ago, the Faktura XP inventory management software has been very popular on the German market and is constantly being further developed and improved. Extensive experience is certainly a significant advantage that is important when choosing an inventory management system.

All important functionalities around e-commerce are included in Faktura XP. In addition to the numerous active and passive interfaces (a complete list can be found on the Faktura XP website), the license prices are also transparent and overall affordable. The company’s development teams possess deep expertise in programming and adapting existing systems and are also available for additional services such as the individual creation of an application, for example on an hourly basis. A transition from an existing inventory management system to Faktura XP should run smoothly and be as simple as importing the data. Throughout the integration process, the development teams are available for questions and assistance.

A particular advantage of Faktura XP is the possibility to rent software packages instead of buying them. This could be a breath of fresh air for smaller companies and beginners with a limited budget.

Sage 100

The software giant Sage is one of the major providers on our list and is known worldwide with its various products in the ERP sector for companies of all sizes. The key words associated with Sage are deep customization possibilities (even industry-specific!) and high user-friendliness. Thanks to a large customer base, Sage has optimized its user experience and created flexible pricing plans for everyone depending on size and needs. The accessible know-how area is another product of this experience, containing valuable information, instructions, and guides. In this context, the quality of customer service should also be mentioned, which is very highly appreciated by customers – patience and professionalism are of essential importance when dealing with software products. Globalization, internationalization, and omni-channeling are not foreign terms to the provider, which is not surprising given its high worldwide popularity.

After an individual consultation, in which many variables regarding your business are discussed, Sage takes your needs and goals into account and offers you a corresponding and concrete solution – that is, no more and no less than what you need. Sage 100 is the module that is targeted at small to medium-sized companies and should be of interest in your search for an inventory management system. Starting at just 22 Euros per month, you get the inventory management function. Sage 100 can be supplemented with additional functionalities as needed and thus become a complete ERP solution. A free 30-day trial allows for an extensive test of the software.

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Target Group

For Small and Medium-Sized Online Shops

Target Group

For small and medium-sized online shops with a higher available budget

Target Group

For relatively complex shops that place great importance on interface integration

Target Group

For all online shops – especially for small companies with strict cost structures

Target Group

“Sage 100” is very well suited for small to medium-sized online shops

Target Group

“SAP Business One” is aimed at medium-sized online shops

Introduction

The inventory management system is responsible for managing inventory and stock. It can also support the processing of orders and deliveries and alert you to bottlenecks. However, many people wonder whether such software is necessary. In addition, there is a large selection of inventory management systems on the market, so the decision is not very simple. In this report, we have taken a very close look at the topic of inventory management. We show you everything you need to know about the system, what to pay attention to, and which alternatives for an inventory management system exist. In this way, you can not only assess whether the software is necessary for your shop, but also know what to look out for when purchasing the right inventory management system for your needs.

The Essentials in Brief

Inventory management systems are indispensable in any sales company. Whether it is retail or an online shop: Whenever products or goods are involved in large quantities and need to be managed, it is essential that these are managed with appropriate software. Otherwise, the time and administrative effort is far too great, and problems or serious errors can occur. Only smaller stores or companies that do not keep their own stock should forgo a good inventory management system.

What It’s About: Inventory Management Systems

In this test report, our experts have dealt extensively with the topic of inventory management systems. We show you the different possibilities and variants and explain whether and when an inventory management system is necessary for your company. Finally, you will learn about the most important features of inventory management software as well as its most significant advantages and disadvantages. This gives you the opportunity to make an informed purchasing decision and choose a new inventory management system that meets your wishes and requirements and can perform the necessary tasks.

Why is an Inventory Management System Important?

Especially in larger shops and in stores that maintain an extensive inventory, it is often difficult to keep track of and manage the goods. It is easy to lose sight of how many of the respective items are still available, what needs to be reordered in what quantity, etc. This is where an inventory management system can help. The software takes over the management of the warehouse and inventory for you. It alerts you when something needs to be reordered, when there are bottlenecks, etc. In addition, the inventory management system is often directly linked to the shop. Customers can therefore see when an item is sold out. Moreover, the software can automatically manage the stock based on sales. For example, when an item is sold and delivered, it is automatically deducted from the inventory. While small shops and even medium-sized stores can often do without the help of inventory management software, larger e-commerce businesses cannot do without the acquisition of an inventory management system.

When is an Inventory Management System Needed?

An inventory management system is required for any larger shop that maintains its own inventory. It does not matter whether it is an online shop or a traditional store, such as a retail outlet. Managing larger quantities of inventory quickly becomes confusing and time-consuming. Using an inventory management system is the only way to entrust this task to professional software that is specifically designed for it. This way, you have control over your warehouse and inventory at all times, know what is missing, and can react to shortages early. Only for small to medium-sized shops with little inventory or for online shops that do not keep their own items is it advisable to forgo the acquisition of an inventory management software.

How Does an Inventory Management System Work?

An inventory management system controls and manages the goods both in the store and in any warehouse. The software monitors the inventory, records additions and subtractions for items and orders. The exact functions of the software depend on the respective model and any additional options. However, the core task remains the same: the inventory management software takes care of managing and optimizing your stock.

The system accomplishes this task by connecting to shop software as well as other hardware. In addition, user operation is important. Normally, you must first familiarize the software with your items. Once this is done, it is possible, depending on the software, to manage the stock individually. For example, when new goods are delivered, they are scanned via barcode with a scanner. The inventory management system then automatically adds the item to the stock or – in the case of an unknown product – asks for further information. In the same way, outflows are recorded. After a successful order (possibly only after shipping), the item is automatically deducted from the inventory.

Advantages and Disadvantages of an Inventory Management System

All products and software, despite their many potential advantages, also have several disadvantages. The inventory management system is no exception. Before deciding to purchase an inventory management software, you should become familiar with these advantages and disadvantages. Only then can you avoid later surprises and ensure that the inventory management system you choose meets your wishes and requirements.

The Advantages of an Inventory Management System

The advantages of inventory management software are obvious. The most important advantages are:

• Easy management of the warehouse and inventory
• Ability to connect to many hardware and software components
• Significant savings in time and administrative effort
• Highly automated
• Often additional areas of application

Easy Management of the Warehouse and Inventory

As the name implies, the primary task of the inventory management software is to manage the warehouse and inventory. The entire inventory process is handled through the software. This makes the task significantly more pleasant and less time-consuming for you. This way, you can fully concentrate on your business and the truly important things.

Ability to Connect to Many Hardware and Software Components

Almost all inventory management systems allow for connection to hardware and software components. Examples include online shops, handheld and barcode scanners, cameras, etc. This creates a complete network that works hand in hand in managing inventory.

Significant Savings in Time and Administrative Effort

Inventory management can quickly become very time-consuming and complex. Appropriate inventory management software provides relief by taking over a large part of the tasks and automating them. The result is enormous savings in time and administrative effort, as well as a much better and more reliable inventory management process.

Highly Automated

A good inventory management system operates in a highly automated manner. It can monitor and record orders, incoming and outgoing goods, cancellations, and returns. It can also detect when an item is no longer in stock or when the quantity falls below a set threshold. In these cases, the system issues an alert. Additionally, the inventory management system can automatically generate reports with information about inventory, stock levels, sales, etc.

Often Additional Areas of Application

Often, the inventory management software works in conjunction with other programs or takes on additional tasks. It is not uncommon, for example, for the inventory management system to be integrated with systems for warehouse management and control of delivery and shipping. Depending on the manufacturer, there are even inventory management systems that are modular and can be expanded with additional components such as marketing and CRM. Some of the better e-commerce shop systems even come with an integrated inventory management system. Other shop systems offer corresponding modules for an additional fee.

The Disadvantages of Inventory Management Software

Despite all the advantages, the inventory management system, of course, also has some disadvantages. It is important that you are familiar with these so that you know what you are getting into and what problems you might face. While many disadvantages are specific to certain software and cannot be mentioned here, there are also some general disadvantages of inventory management software that we would like to present to you in more detail.

• Often numerous additional components are required
• Additional software and systems are needed
• Sometimes high costs

Often Numerous Additional Components are Required

For the inventory management system to function correctly, various additional components are often required. This includes software as well as hardware such as barcode or QR scanners and APIs and interfaces. This not only creates additional costs, but a complete inventory management system is also a very complex and extensive network.

Sometimes High Costs

A good and complete inventory management system is not exactly cheap. In some cases, you may have to expect higher additional costs. The inventory management system is worth these expenses, but in general, the software is only needed by larger companies. You should check in advance whether you can forgo an inventory management system (at least for the time being) if you need to save costs.

Additional Software and Systems are Needed

Inventory management software usually only takes care of exactly that: managing inventory and stock. This means that, to function correctly and to be able to use all the features of the system, additional software and systems are often required. Examples include CRM and accounting software, systems for order and delivery management, etc.

Areas of Application for Inventory Management Systems

Inventory management systems are used in a wide variety of applications and possibilities. Some of the best-known are:

• Online Shops
• Retail and department stores
• Enterprise companies
• Larger companies that maintain their own goods or articles

An inventory management system is always found where companies offer and sell goods or products in larger quantities. In other words, anywhere where goods, inventory, and warehousing need to be controlled and managed. For this reason, the software is primarily found in larger and medium-sized companies that sell items to their customers. Smaller companies and businesses that do not store their own goods and products can, on the other hand, do without the software.

The inventory management system takes care of the complete management of the goods. The exact functions and areas of application depend on the manufacturer, the model, and the desired modules. However, the software is always capable of monitoring how many items are in stock in the warehouse or inventory. In addition, incoming and outgoing goods are controlled and recorded. For this task, inventory management systems work together with many other components and modules as well as with various API interfaces. In general, an inventory management system can trace the complete history of a product – from delivery and warehousing to shipping. In addition, it manages returns and cancellations. Some inventory management programs are capable of making stock levels and delivery times accessible to the customer via the online shop’s website.

Examples of Inventory Management Systems

Below you will find some examples of how inventory management systems are used. These are intended to show you where the benefits of such software lie and which tasks the system can take over for you.

• Commission billing for sellers
• Project management
• Time management for staff and projects
• Financial management
• Data exchange
• Controlling

In addition, there may be further functions available. Which possibilities and functions the inventory management software exactly offers depends on the desired model and the respective manufacturer. Therefore, you should already familiarize yourself with the various systems, their possibilities, and your own requirements for the system in advance. Only in this way can you make an optimal purchasing decision.

The Different Types of Inventory Management Systems

Inventory management systems come in various types and designs. The most important are:

• Combo systems
• Standalone inventory management systems
• Integrated systems

Combo Systems

Combo systems are inventory management systems that can also take on additional tasks and functions. Examples include programs that additionally come with CRM software, SMS functions, or other components that are an integral part of the software. Many e-commerce solutions offer such combo systems, which provide you with all the important programs from a single source. Combo systems are usually somewhat more expensive but often offer a complete package. For this reason, this variant is particularly interesting for new companies and startups.

Standalone Inventory Management Systems

Standalone inventory management systems refer to software that operates independently and on its own. A standalone system takes over the tasks of inventory management independently. It is installed in addition to existing software and functions completely independently. However, connecting to other components and communicating with key elements such as the shop system is possible. For this purpose, interfaces, the so-called APIs, are used. They enable communication and interaction between the inventory management system and other components of the online shop.

Integrated Inventory Management Systems

Integrated inventory management systems refer to software that is an integral part of a larger whole. For example, some online shop systems include a basic inventory management system, while other shop system manufacturers offer corresponding add-on modules. These modules integrate seamlessly into the overall software. However, they do not function independently. If you already use a shop system that offers such modules, this is probably the best choice. The reason is that such modules integrate perfectly into the existing software and allow for native communication with the other modules.

Alternatives to Inventory Management Systems

The inventory management system itself is indispensable for the management and monitoring of your goods and is irreplaceable in this area. However, not every shop needs an inventory management system. Especially small to medium-sized online shops with only a few items or a manageable number of customers can do without the software. The same applies to shops that do not store goods themselves but instead obtain them from a third party upon a customer’s purchase.

The Most Important Features of an Inventory Management System

As the name suggests, the inventory management system is used for managing goods and inventory as well as the warehouse. This is the minimum task that the system should fulfill. However, a good inventory management system can often do much more. Some examples include:

• Integration with CRM and accounting software
• Integration with e-commerce software
• Clear display of inventory
• Alerts and warnings for low stock or sold-out items

Integration with CRM and Accounting Software

A good inventory management system can be easily integrated with CRM and accounting software and works as a single unit with such programs. This makes order processing and shop management significantly easier.

Integration with E-Commerce Software

Many inventory management systems can be integrated with e-commerce software. Here, the software helps to manage inventory and warehouse stock in the online shop and takes sales into account. If an item is not available, this is displayed to the customer.

Clear Display and Management of Inventory

The primary purpose of inventory management is to manage the inventory and warehouse. This also applies to online shops. Many inventory management systems also enable the management of orders or deliveries. The system alerts you to pending deliveries and gives indications when delays occur, etc.

Alerts and Warnings for Low Stock or Sold-Out Items

A good inventory management system alerts you as an administrator or manager to problems with the stock. If an item is sold out or only available in small quantities, it issues a notification or an alert to draw attention to the situation. Some of these systems even allow you to display the stock level to the customer. For example, a visitor to your online shop can see that an item is sold out.

The range of inventory management systems is large. Here we have only presented the most important features. If you are looking for an inventory management system, you will find many possibilities and functions. Often, the software integrates into an online shop or is a combination of several products in one. Therefore, before purchasing, you should thoroughly inform yourself.

Important Questions About the Inventory Management System

Below you will find some of the frequently asked questions regarding inventory management systems along with their answers. We hope that our experts can answer most of your questions on this topic.

Do I Need an Inventory Management System?

If you do not own a small online shop with a few, manageable items or if you do not keep your own goods and products for shipping, an inventory management system is highly recommended! Otherwise, the work becomes very time-consuming and serious errors can occur.

Can an Inventory Management System Replace Inventory and Warehouse Management?

That depends on the software and your requirements. Some inventory management programs come with integrated warehouse and inventory management. However, most systems offer only basic functionality. If very simple inventory and warehouse management is sufficient for you, then such systems are often adequate. However, if you require complex functions and an elaborate management of warehouse and inventory – for example, at multiple locations – then software or an inventory management system that offers these functions is required. The basic inventory management systems cannot take over these tasks.

Will My Online Shop Work with the Desired Inventory Management System?

Most online shops offer the possibility of using inventory management systems. However, there may be restrictions regarding which systems are supported. Additionally, there are differences in the effort required for integration. It is easiest if your shop system or its developer offers its own inventory management module. If this is not the case, then you should inquire with the manufacturer about which programs are supported and which one is recommended.

Do All Online Shops Also Support Inventory Management Systems?

Most shop systems support the use of inventory management systems, but not all. There are also differences in communication and in the possibilities for integration. While some shop systems offer full integration of certain inventory management software, with other programs you may still have to handle some tasks yourself. It is important that an appropriate API interface is available, which the software uses for communication. We recommend that you check with the manufacturer whether and, if so, which inventory management systems can be used for your shop system.

In this context, you should also ensure that the inventory management system is compatible with any other existing software, such as CRM, warehouse management, etc. If in doubt, you might consider switching company-wide to a new solution that integrates all the necessary software.

Conclusion

QUOTES

• An inventory management system is usually an absolute must in all larger shops!
• Inventory management systems are not necessarily inexpensive to purchase. However, they are almost always worth the money.
• Only startups and small companies, as well as those businesses that do not maintain their own stock, should forgo an inventory management system.
• There are open, closed, and integrated inventory management systems. All have their own advantages and disadvantages and are particularly suited for different areas.
• Many inventory management systems can be integrated into an online shop.
• Some online shop providers offer modular solutions. In these cases, there is almost always also an inventory management module available.
• For online shop systems, integrated inventory management modules are the best option. They not only offer the most functions but also ensure smooth integration and communication.