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.
- A good multi-channel inventory management software is the secret ingredient to effective multi-channel selling. Some multi-channel inventory management software includes SellBrite, Ecomdash, and QuickBooks.
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.
Read on to find out what multi-channel inventory management is, its benefits, challenges, 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.
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.
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.
See also: Top Hacks to Improve Your Multi-Channel Inventory Management
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 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 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.
QuickBooks (formerly TradeGecko) is another powerful tool for multichannel inventory management. With their impressive features, you can effectively manage your orders, make payments, and get detailed insights all from one location. You can also integrate it with other online marketplaces like eBay and Amazon.
Their prices range from $9 per month to their Advanced plan for $60 per month. You also get a free trial for 30 days.
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.
