Key takeaways:
- Multi-channel inventory management involves managing and controlling inventory across multiple sales channels such as ecommerce websites and online marketplaces.
- With effective multi-channel management, you can efficiently manage and fulfill orders across various channels, streamline workflows, minimize errors, improve accuracy, speed, and delivery, and ultimately improve your customers’ experience.
- Use a centralized system to maintain accurate stock levels across Amazon, Walmart, Shopify, and other sales channels, and keep inventory synchronized in real time to avoid selling products you do not have.
- Set reorder points, maintain safety stock, and use sales data, seasonality, promotions, and channel-specific trends to make smarter purchasing and allocation decisions.
- Shared networks such as Amazon Supply Chain Services and Walmart Multichannel Solutions can help streamline fulfillment and inventory allocation across channels.
- Track inventory accuracy, turnover, sell-through, stockouts, and order fill rates, and pick multi-channel inventory software that fits your channels. Some options include SellBrite and Ecomdash.
Today, many businesses sell their products across multiple channels like ecommerce websites, online marketplaces, and brick-and-mortar stores. Being wherever your customers are is a golden opportunity to increase your sales. However, managing your inventory and providing a seamless shopping experience for customers across all channels can be challenging.
Imagine you have 20 units of a product left. Your Shopify store sells five, Amazon sells eight, and Walmart sells six. If those orders do not update your inventory quickly enough, every channel may still show stock that no longer exists. Suddenly, you are dealing with overselling, cancelled orders, disappointed customers, and potentially weaker seller performance.
That is why multi-channel inventory management is about building a unified inventory system that gives your business one reliable view of stock, orders, warehouses, and fulfillment across every sales channel.
Read on to find out what multi-channel inventory management is, its benefits, challenges, proven strategies to prevent stockouts and overselling, the KPIs to track, and some of the best multi-channel inventory management software.
What is multi-channel inventory management?
Multi-channel inventory management involves the management and control of inventory across multiple sales channels such as ecommerce websites, online marketplaces, and so on.
Each sales channel has its own sales pattern, inventory demands, and order fulfillment requirements. So managing inventory across these sales channels can be challenging.
The goal of multi-channel inventory management is to streamline these processes and enable businesses to prevent stockouts, increase customer satisfaction, and ultimately drive sales.
Why is multi-channel inventory management important?
Good multi-channel inventory management plays a vital role in ecommerce success. Here are some benefits of effective multi-channel inventory management:
Ensures efficient order fulfillment
With effective multi-channel management, you can efficiently manage and fulfill orders across various channels. You can streamline workflows, minimize errors, improve accuracy, speed, and delivery, and ultimately improve your customers’ experience.
Automated inventory management
As an ecommerce business owner, you can agree that as you add new sales channels, managing your inventory across all channels becomes challenging. However, with good inventory management, you can automate the entire process and get real-time information to ensure your customers get their orders within the stated time frame.
Improves customer experience
There’s nothing worse than having willing customers place an order for inventory that is unavailable. Not only do you lose out on sales, but you also lose potential customers to your competitors.
With effective multi-channel inventory management, you can ensure inventory is available and improve your customer experience. Most multi-channel inventory software also helps to ensure timely delivery, track orders, and ensure product listings are correct. Ultimately, this can help improve your customers’ shopping experience.
Prevents stockouts and overselling
Selling the same item on multiple platforms (e.g., Amazon, Shopify, Walmart) without syncing inventory can result in selling more units than you actually have. This leads to canceled orders, unhappy customers, and platform penalties. Proper inventory management prevents this by updating stock levels in real-time.
Product listing management
It is not only challenging to manage inventory across multiple sales channels, but it is also difficult to manage all product listings. With good multi-channel inventory management software, you can automatically share product listings across all your sales channels.
Aids data-driven decisions
Various platforms offer analytics on bestsellers, seasonal trends, and channel-specific performance. These insights help you plan smarter and allocate inventory where it performs best.
Helps sales growth across platforms
Expanding to new marketplaces is easier when your inventory is managed centrally. You can list your products confidently on more platforms, knowing your stock is synced and accurate everywhere.
Makes fulfillment more efficient
A centralized inventory view can show which warehouse or fulfillment location has available stock and help you make better allocation decisions. Amazon's Multichannel Fulfillment, for example, uses one fulfillment network to fulfill orders from multiple sales channels rather than requiring separate inventory pools for each channel. Walmart's Multichannel Solutions similarly allows sellers to use WFS inventory for orders placed outside Walmart.
Challenges of multi-channel inventory management
Here are some common challenges that ecommerce multi-channel sellers face:
Running out of stock and overselling
Running out of stock and overselling is perhaps one of the most common challenges of multi-channel selling. Keeping track of inventory counts across multiple channels can be challenging. If you’ve placed an order for a product only to find out that the product wasn’t available, you would understand that this can create a negative impression for your customers and lead to missed sales opportunities.
Too much inventory
Another common challenge that comes with selling on multiple channels is stocking too much inventory. Demand forecasting becomes more complex, leading to wasted inventory spending and additional storage fees.
Inaccurate demand forecasting
Data insights are even more important when selling across multiple channels. However, getting quality and consistent data can be challenging due to varying reporting features, metrics, and formats.
Inconsistency across multiple channels
Customers want the same shopping experience across all your sales channels. Whether customers choose to shop on an online marketplace, your ecommerce website, or offline, they want a consistent shopping experience. Providing the same quality and consistency across all channels can get complex and requires a deep understanding of all business operations.
Best inventory management techniques
There are various inventory management techniques you can implement depending on your business needs. Here are some best techniques for multi-channel inventory management:
ABC analysis
The ABC analysis is a technique that identifies top-performing products based on revenue and volume. The classification will look like this:
- A - Products with low volume but high value
- B - Products with mid-volume and mid-value
- C - Products with high volume and low value
With this analysis, you can find out where the majority of your revenue comes from and work towards making those products more available. It also allows you to better organize your warehouse space, adjust pricing, and explore new product ideas.
First-in, first-out (FIFO)
First in First out (FIFO) is a common inventory technique especially used for perishable products. So, with the FIFO technique, when goods come into the warehouse first, they are added to the back of the shelf and picked last during fulfillment. This means that goods that have been in the warehouse the longest get sold first. The technique ensures that goods are properly rotated to avoid spoilage.
Economic Order Quantity (EOQ)
Economic Order Quantity (EOQ) is an inventory management technique that aims to find out the optimum inventory level to order and how often to order it. With this technique, you can order the right amount of inventory at the right time. You can reduce costs and avoid spending money on inventory you can’t sell.
Sales forecasting
With sales forecasting, you can look into the future and predict how you will sell your products. This is done by analyzing how you sold your stock the previous year, month, week, and more. You can easily do this using inventory management software.
Just-In-Time (JIT)
Just-In-Time (JIT) is an inventory replenishment strategy that allows you to order inventory when it is needed to reduce costs and wastage.
8 proven strategies to improve multi-channel inventory management
If you are serious about preventing stockouts and overselling, focus on building a reliable inventory operation. Here are eight strategies to put in place:
- Identify your core products
- Set reorder points and safety stock levels
- Forecast demand across channels
- Build a unified inventory system
- Use shared fulfillment and supply-chain networks
- Keep inventory updates as close to real time as possible
- Monitor channel-specific inventory performance
- Audit and optimize your inventory regularly
Identify your core products
Not every product deserves the same level of inventory attention. The 80/20 rule is useful here. A relatively small percentage of products often generates a large share of your sales. These high-volume products deserve closer monitoring because a stockout can have a much bigger impact on revenue. ABC analysis can help you identify them.
A products are your highest-value or fastest-moving products, B products have moderate importance, and C products contribute the least value or volume. Once you identify your A products, you can give them tighter stock monitoring, higher safety-stock levels, and more frequent replenishment reviews. This becomes especially important when the same SKU is selling across several channels.
Set reorder points and safety stock levels.
You should not wait until a product reaches zero before deciding to reorder it. Set a reorder point based on sales velocity, supplier lead time, and the amount of safety stock you need to cover unexpected demand or supply delays.
For example, if a product sells 20 units a day and your supplier needs 10 days to deliver, you already need to account for roughly 200 units of expected demand during that lead time. Your safety stock provides additional protection against demand spikes or shipping delays.
Your inventory system should alert you when stock approaches the reorder point. More advanced systems can also support automated replenishment.
Forecast demand across channels.
Multi-channel demand forecasting is different from forecasting sales for a single store. A product may sell slowly on your website but quickly on Amazon. A promotion on TikTok Shop could suddenly increase demand. Walmart sales may also behave differently during major shopping events.
Instead of looking at each channel in isolation, combine historical sales, current sales velocity, seasonality, promotions, lead times, and channel-specific trends. The goal is not to predict demand perfectly. It is to make better purchasing and allocation decisions before demand catches you off guard.
Build a unified inventory system.
This is the foundation of effective multi-channel inventory management. Rather than maintaining separate inventory counts for every marketplace, connect your sales channels, warehouses, fulfillment providers, and inventory management software so they work from a shared inventory picture. A good system should help you see available inventory, reserved inventory, incoming inventory, inventory by warehouse or location, orders and returns, reorder points, safety-stock levels, etc.
The important part is not simply having a dashboard. The systems behind the dashboard need to communicate with one another.
Shopify, for example, has expanded its native inventory management and analytics capabilities. Shopify's built-in inventory tools provide unified, real-time inventory visibility across locations, while its analytics can surface metrics such as sell-through rate, days of inventory remaining, and inventory value. Shopify's Analytics dashboard also brings sales and fulfillment metrics together across sales channels. That kind of native visibility can reduce the amount of manual reconciliation required to understand what is actually happening with your stock.
When comparing the best Shopify apps for inventory management, look beyond basic stock counting and consider whether the app supports real-time synchronization, multiple locations, purchase orders, forecasting, bundles, and connections to your other sales channels.
Use shared fulfillment and supply-chain networks.
You do not necessarily need a separate inventory pool for every sales channel. Shared fulfillment networks can help you make better use of the inventory you already have.
Amazon Supply Chain Services, which is evolving from Supply Chain by Amazon, provides transportation, storage, distribution, fulfillment, and delivery services while allowing sellers to track inventory across multiple sales channels through Seller Central. Amazon Multichannel Fulfillment can also use FBA inventory to fulfill orders from other sales channels.
If you are managing a large Amazon operation, it is also worth evaluating the best Amazon inventory management tools for US sellers based on the complexity of your business. The right solution should make it easier to monitor inventory across fulfillment locations, connect Amazon with other sales channels, automate replenishment, and maintain accurate available-to-sell quantities.
Walmart offers a similar approach through Multichannel Solutions, allowing eligible sellers to use WFS inventory to fulfill orders from channels beyond Walmart.com. Walmart says its solution can pool inventory rather than requiring sellers to separate stock by sales channel.
The advantage is flexibility. Instead of thinking, “This inventory belongs to Amazon” or “This inventory belongs to Shopify,” you can think in terms of available inventory that can be allocated to demand across your business, while still maintaining the stock buffers and channel requirements you need.
Keep inventory updates as close to real time as possible
This is one of the biggest changes in multi-channel ecommerce: inventory accuracy is now a speed problem. If a customer buys the last unit on Amazon, your Shopify store should not continue showing that unit as available for the next several hours.
The same applies when inventory is returned, damaged, transferred between warehouses, or received from a supplier.
Modern platforms expose real-time or near-real-time inventory information. Walmart, for example, says WFS inventory counts and statuses are displayed in real time, while its multichannel tools provide real-time visibility into inventory available for off-Walmart orders.
Delayed updates can also create performance problems. Walmart has made order-performance measures such as Late Shipment Rate accountable, while Amazon has long tied seller performance to metrics such as cancellation and order defect rates. Accurate inventory is therefore not just an operational convenience. It helps you avoid accepting orders that you cannot actually fulfill.
Monitor channel-specific inventory performance.
A unified inventory system gives you one view of your stock, but that does not mean every channel should be managed exactly the same way. Each marketplace has its own performance requirements and inventory signals.
For example, Walmart's current WFS inventory tools provide metrics such as daily in-stock sales rate, sell-through rate, inventory age, and unavailable-to-sell inventory. Walmart classifies WFS sell-through performance based on how quickly inventory moves, giving sellers another signal for deciding when to replenish, transfer, or reduce inventory.
This matters when allocating shared inventory. Suppose you have 1,000 units available across your business. You should not automatically divide those units equally between Amazon, Walmart, Shopify, and other channels. Instead, consider each channel's sales velocity, fulfillment requirements, lead time, promotions, and inventory health. Walmart's WFS tools, for instance, can highlight low inventory, surplus inventory, and opportunities to move seller-fulfilled products into WFS.
Audit and optimize your inventory regularly
Even the best inventory system can produce bad decisions if the underlying data is wrong.
Run regular cycle counts and compare your physical stock with your digital inventory. Review discrepancies, damaged units, returns, transfers, cancelled orders, and inventory sitting in fulfillment centers.
You should also look for slow-moving products, dead stock, unexpected stockouts, high-return products, fulfillment delays, inventory trapped in the wrong location, channels consuming inventory faster than expected, etc. Do not wait until a customer tells you an item is unavailable to discover that your inventory count is wrong.
Multi-channel inventory KPIs to track
Being able to measure your inventory performance is one sure way to improve it. You want to set the KPIs you want to monitor and use to measure your performance. Here are some multi-channel inventory management KPIs you want to consider:
- Inventory Turnover Rate: Your inventory turnover rate measures how quickly your products sell through within a period (typically a year). A good inventory turnover rate indicates that you are generating sales and moving through your inventory quickly. Here’s how to calculate your inventory turnover rate: Inventory Turnover Rate = Cost of Goods Sold/Average Inventory OR Sales / Average Inventory.
- Cost of Carrying: Cost of Carrying measures how much it costs to store your inventory every year as a percentage of your total inventory value. This gives you insight into the efficiency of your inventory management operations. It will help you identify storage costs for products that are obsolete, large, or delicate, and so on. Here’s how to calculate the Cost of Carrying: Cost of Carrying = (Inventory Storage Costs / Total Inventory Value) X 100%.
- Customer Order Fill Rate: With this metric, you can ensure your orders are delivered to your customers on time. With the customer order fill rate, you can measure your customer satisfaction and work to ensure you’re providing good customer service. Here’s how to calculate your Customer Order Fill Rate: Customer Order Fill Rate = Orders that are shipped in Full/Total Number of Orders.
- Inventory Accuracy: This metric measures your recorded inventory side by side with your actual inventory. Not having an accurate representation of your inventory can lead to higher costs, poor accuracy, and a decrease in customer satisfaction. With this metric, you can identify unreported damage, potential theft, and other discrepancies. Here’s how to calculate your Inventory Accuracy: (Items Counted / Items Counted in System) X 100%.
What to look out for in a multi-channel inventory management software
A good multi-channel inventory management software is the secret ingredient to effective multi-channel selling. So, choosing the best multi-channel inventory software for your business is critical to inventory management success.
Here are a few factors to consider when choosing inventory management software:
- Channel integrations
Make sure the software supports direct integrations with all your current and planned sales platforms, such as marketplaces (Amazon, eBay, Walmart, Etsy), ecommerce platforms, POS systems (for physical retail stores), fulfillment providers, etc.
- Centralized dashboard
A good multi-channel inventory software should have a unified, intuitive dashboard that allows you to view total and channel-specific inventory, track sales and order status, set reorder points and safety stock levels, and manage listings across platforms.
- Optimized inventory management
A good inventory management software should automatically adjust your product listings as stock is sold on each sales channel. Also, as stock levels are replenished, your inventory software should automatically be adjusted to the amount of stock available on your product listings.
- Automate purchase orders
A good inventory management software should automatically track purchase orders, generate orders, and manage the entire process when needed.
- Accurate inventory forecasting
You want to choose an inventory management software that offers fast and accurate inventory forecasting that enables you to anticipate the next demand surge and what products you need. With accurate forecasting, you can make the most out of peak seasons and trends, stock the right amount of inventory and avoid wastage.
- Scanning and barcoding
Fluctuating inventory quantities and inventory levels is one of the reasons barcoding and scanning have become important for managing inventories. It helps to track each inventory unit and its location. You may want to consider inventory management systems that come with scanning and barcoding features.
- Detailed analytics and reports
Detailed analytics and reports can provide valuable insights needed for better inventory management and business growth. When choosing an inventory management software, you may want to consider options that provide detailed analytics and reports not only for inventory management but for other business functions.
Best multi-channel inventory management software
Multichannel inventory management can only be effective with good inventory management software. Here are some multichannel inventory management software you could consider:
SellBrite
SellBrite is a prominent multichannel inventory management solution. With this software, you can effectively manage your inventory across multiple sales platforms. You can also create and sync product listings all from a single place.
With the inventory sync feature, you can automatically update your product listing quantities to fit your available inventory.
This versatile software also performs other functions, including product management, order management, and detailed analytics.
You can integrate SellBrite with online marketplaces like Amazon and eBay, Etsy, Walmart, and so on.
SellBrite has various pricing plans including their “Forever Free” plan which allows up to 30 orders per month and a plan that goes as high as $179 per month. Their most popular pricing plan is the “Pro 100” at $29 per month allowing 100 monthly orders.
Ecomdash
Ecomdash is a flexible inventory management software that allows you to determine your processes and inventory requirements. So, you can manage your products by serial number, SKU, or a specific product identification system.
With Ecomdash, you can reduce the risk of overselling thanks to their automated inventory sync. You can keep your customers updated with order status updates, and track order information. It also has order management features including printing pick lists, shipping labels, and packing slips all from one dashboard.
Ecomdash offers various pricing plans, from their free plan for 30 monthly orders to their Pro-350 plan for 10,000 monthly orders.
Your sales platforms may also include native tools. Shopify's built-in inventory tools, for example, provide real-time inventory visibility across locations. For Amazon-heavy businesses, see the best Amazon inventory management tools for US sellers.
Wrapping up
With the complexities that come with selling on multiple channels, effective inventory management is critical for ecommerce success. Optimizing your inventory and providing customers with a seamless shopping experience are underlying factors that increase sales and encourage repeat purchases. With effective inventory management across all sales channels, you can avoid running out of stock, mismanaging stock, and incurring unwanted costs.
If managing inventory across Amazon, Walmart, Shopify, and other channels is becoming difficult to handle internally, ePlaybooks' multichannel ecommerce management services can help you build more connected ecommerce operations.
