In today’s eCommerce landscape, multichannel marketing and multichannel selling have become the norm for modern retailers and businesses. However, with sales driven from various sources like marketplaces and social media comes the challenge of multichannel inventory management. Navigating through platforms to keep track of every order and item shipped out of your inventory can be time-consuming.
In this article, we will discover everything you need to know about multichannel eCommerce inventory management and how to simplify this inventory management process, including
- Benefits and challenges of multichannel inventory management
- 7 best practices for managing inventory across multiple channels effectively
- Top 5 multichannel inventory management software for your business
Without further ado, let’s get started!
Benefits and Challenges of Multichannel Inventory Management
Effectively managing inventory across various channels can bring numerous benefits. Yet, as a seller, it’s crucial to be ready for certain challenges. Let’s explore both the advantages and obstacles of multichannel inventory management.
3 benefits of effective multichannel inventory management
Implementing an effective multichannel inventory management system is a crucial eCommerce strategy, and it offers a range of advantages.
- Optimized order and inventory workload: By centralizing your inventory management, you can easily track, manage, and organize your orders and sales across channels in one single place instead of various separate platforms. This can streamline workflows and reduce a lot of time spent managing inventory. Moreover, good inventory management is key to efficient multichannel order management.
- Real-time stock visibility: An effective multichannel inventory management solution allows you to get up-to-minute insights into stock levels across all channels, preventing stockouts or overstocking and minimizing the risk of lost sales or excess carrying costs.
- Higher customer satisfaction: Timely order fulfillment, facilitated by automated supply chain processes, results in a seamless and reliable shopping experience. Happier customers are more likely to return and recommend your products to others.
3 challenges of multichannel inventory management
Effective multichannel inventory management is obviously advantageous, or else there is a lot of work for any seller. If you plan to manage your inventory on your own, it’s better to prepare your team to deal with some challenges below.
- Manual inventory management: Without an automated inventory management system, you probably have to rely on manual processes. This manual approach is time-consuming and sometimes might lead to inaccuracies and inefficiencies, making it difficult to track real-time stock levels.
- Stockouts or overstocking: An inefficient manual inventory management through spreadsheets can lead to stockouts. For example, if an item is sold in one channel, but the inventory isn’t updated. On the other hand, a lack of accurate inventory data might cause overstocking. These inventory imbalances not only impact revenue but also affect brand reputation and customer loyalty.
- Order fulfillment complexity: Each sales channel may have its own unique requirements and fulfillment processes. Thus, managing these variations ineffectively may result in errors, delayed shipments, and increased operational costs.
7 Best Practices for Effective Multichannel Inventory Management
Now that you’ve got the main benefits and challenges of managing inventory across multiple channels, let’s find out how to manage your inventory across channels effectively.
Here are 7 best practices for better multichannel inventory management.
- Maintain a centralized inventory
- Structure your product database
- Limit receiving errors
- Apply first-in-first-in rule
- Classify ABC inventory
- Use weekly cycle counts
- Forecast sales
1. Maintain a centralized inventory
First, when your inventory is wrong, everything is going to be wrong too. Keeping a centralized inventory management system gives you an overview of all your channels and then ensures that all our operations run smoothly. This “Keep everything in one place” technique minimizes errors and enhances overall efficiency.
Here are some tips to better manage your inventory on various channels.
- Specify which warehouse fulfills each order to streamline workflows and enhance customer service.
- Include physical stores in your inventory management or create a virtual warehouse to track all of your items effectively.
2. Structure your product database
Creating a well-structured and organized product database helps in easy navigation, quick updates, and efficient tracking, which lays the foundation for streamlined multichannel inventory management.
Consider the following guidelines to have the right data structure:
- Utilize a singular, distinctive SKU for each item.
- Construct kits and bundles accurately.
- Manage variants, such as size and color, with precision.
- Comprehend the diverse units in which you may engage in buying and selling, such as pallets, crates, and cartons
3. Limit receiving errors
Receive right, manage right. In contrast, inaccurate inventory data can lead to errors in order fulfillment, resulting in delayed shipments, wrong products being sent, or incomplete orders.
An effective way you can apply to your multichannel inventory system to reduce receiving errors is to use barcodes. Scanning the barcodes on the label to display numbers on your screen instead of typing them on the keyboard will significantly reduce numerical errors through transposition.
Moreover, you can use it for all your warehouses, eCommerce platforms, or marketplaces, making your multichannel inventory management even more efficient.
4. Apply the first-in-first-out rule
Another way of effective multichannel inventory management is to use the First In, First Out (FIFO) method. This is a crucial practice to ensure that older inventory is sold or used before newer stock. This principle is especially relevant for perishable goods and items with a limited shelf life.
By adhering to FIFO, businesses can prevent product expiration, reduce waste, and avoid potential losses due to obsolete inventory. Implementing FIFO requires accurate date tracking and organization of inventory, ensuring that the oldest products are consistently used or sold first.
5. Classify ABC inventory
The ABC inventory management technique, aka ABC analysis, is a method used to categorize items in inventory based on their importance and value to the business. It divides inventory into three categories: A, B, and C.
- Category A: A items are the most important. This category includes high-value items. Although these items might represent a relatively small percentage of the total inventory count, they contribute to a large portion of the total inventory value.
- Category B: Items in this category are of medium value and importance. They typically make up a moderate percentage of the inventory count and value.
- Category C: C items are the least important. This category comprises low-value items that represent a high percentage of the inventory count but contribute relatively little to the total inventory value.
By classifying inventory in this manner, businesses can focus their attention on managing high-value items more closely. It helps prioritize resources and efforts for the most critical products, ensuring efficient stock management and reducing carrying costs.
6. Use weekly cycle counts
Regular inventory cycle counts are a proactive inventory control that maintains accuracy without the disruption of a complete physical inventory count. In contrast to a full count, cycle counts involve counting specific subsets of inventory on a regular schedule.
This approach helps identify discrepancies between physical stock and recorded quantities, allowing businesses to address issues promptly and maintain accurate inventory records. By conducting cycle counts frequently, businesses can identify and rectify inventory management issues early on, preventing stockouts, overstocking, and inaccuracies. Ultimately, applying this technique in your multichannel inventory management will help you avoid customer dissatisfaction and financial losses.
7. Forecast sales for better multichannel inventory management
Let’s be straightforward. As a seller, you obviously don’t want to fall into the stockout situation, which can hurt your sales. Moreover, some channels might work better than others. Therefore, forecasting sales right and dividing the eggs wisely can mitigate this risk of stockouts by knowing when it is on its way.
This not only helps you optimize your sales of each channel but also better multichannel inventory management.
Well, that’s 7 techniques that can help you better manage your inventory of all sales channels. But what is the specific software that can assist you in this selling step? You will get the answer in the next session.
5 Best Multichannel Inventory Management Software
So, you’ve learned how to manage inventory across multiple channels. But why not use multichannel inventory management software and let the technology do the daunting tasks?
Here are the 5 best tools for multichannel inventory management:
The first and most recommended multichannel listing and inventory management solution is LitCommerce.
LitCommerce is a powerful multichannel selling solution that helps you manage listings, pricing, orders, and inventory across multiple channels. It simplifies your multichannel selling journey by providing the following features:
- Multichannel Connect: The multichannel connect feature makes it easy to integrate more than 20+ different platforms all at once. It provides centralized multichannel management. No single line of code is required!
- LitCommerce QuickGrid: This is a spreadsheet-style interface that allows you to edit and manage listings on a central screen. Besides, the app enables you to bulk update products even more quickly using LitCommerce’s Templates and Recipes – a set of listing attributes for specific channels.
- Integrated Order Flow: With the LitCommerce tool, all arriving orders from any marketplace will be pulled into your eCommerce platform’s dashboard. From there, you can easily track the order from multiple channels.
- Multichannel inventory sync: Look for an effective multichannel inventory management software, LitCommerce is your answer. LitCommerce synchronizes and automatically updates the inventory of all your channels. Take an example that you are selling on your own website using Shopify, Etsy, and TikTok Shop, and you integrate them together. When a customer places an order on Etsy, both Shopify and TikTokShop’s inventory will automatically decrease by 1. This will save you a lot of time manually inventory tracking and updating, and then overselling or out-of-stock problems are no longer your concern.
Sell everywhere easily and affordably with LitCommerce. Instead of wasting time counting one by one item, you can spend time optimizing your listings, which can help your business get free traffic and drive more sales. Contact us and start managing inventory in one place today!
Manage your inventory across channels easily with LitCommerce
Let multichannel inventory management software like LitCommerce work for you. Synchronize and automatically update your inventory on all channels.
Just like LitCommerce, Sellbrite is a multichannel management software. Sellbrite enables users to generate and oversee listings, oversee inventory, and complete orders seamlessly through a unified interface. Monitor available, reserved, and on-hand stock levels across multiple warehouses to prevent overselling and underselling.
With Sellbrite’s free plan, users have unlimited access for 30 days and can process up to 30 orders per month. For high-volume needs, other pricing plans support up to 2,000 monthly orders.
Brightpearl is a specialized system designed for stores that sell online and in physical shops, catering to medium to large retailers. It streamlines operations, enhances sales, and ensures customer satisfaction through smart order management.
With Brightpearl, you can effortlessly use Magento, BigCommerce, Shopify, Amazon, and eBay alongside your physical stores—all in one place. The system’s real-time POS integration provides a clear picture of your business operations.
In addition, Brightpearl offers advanced features like FBA inventory management, real-time Amazon inventory tracking, demand planning, warehouse management, and insights into Amazon profitability. This comprehensive solution adapts to your business needs, providing flexibility and the ability to scale up with ease, ensuring your business stays competitive in the dynamic e-commerce landscape.
At SkuNexus, we believe that inventory management is the keystone of all other business operations. If you don’t know what you have and where you have it, right now, managing inventory across various online platforms and marketplaces becomes a guessing game.
To address this, SkuNexus designs its systems to empower merchants with an array of tools providing total command, clear visibility, and complete control of their entire inventory in real time.
Ecomdash is a handy tool that helps you manage your products, restock items, organize your warehouse supplies, handle distribution, and process orders—all in one place. Just like Brightpearl, Ecomdash is a website that works for everyone, from freelancers to big businesses.
Here are some things Ecomdash can do:
- Show you a dashboard with all your activities
- Track what you’re doing
- Manage orders that are waiting for items to be restocked
- Scan barcodes or tickets easily
- Handle different sales channels
- Keep track of your costs
- Use customizable templates
- Manage discounts
- Track deliveries
- Take care of your online store
Unlike Brightpearl, Ecomdash doesn’t work with PayPal and QuickBooks Online. But it can connect with other services like Shopify, Adobe Commerce, and WooCommerce.
Multichannel Inventory Management – FAQs
Multichannel inventory management refers to the process of overseeing and controlling orders and inventory across various sales channels, such as top online marketplaces, eCommerce websites, brick-and-mortar stores, and more. The four types of inventory management are just-in-time management (JIT), materials requirement planning (MRP), economic order quantity (EOQ), and days sales of inventory (DSI). Each inventory management style has its pros and cons, therefore works for different businesses. The 5-step inventory management process typically includes: The ABC technique of inventory management, aka ABC analysis, is a method used to categorize items in inventory based on their importance and value to the business. It divides inventory into three categories: A, B, and C. The ABC analysis can be used to help make decisions about which inventory items should be given priority in terms of stock levels and reordering. Inventory and order tracking across multiple channels is critical for eCommerce businesses as it helps you ensure your inventory is on hand to meet customer demand. As a result, it also helps your business to avoid stock out or overselling and to reorder new stock on time and with the right quantity.
Multichannel inventory management refers to the process of overseeing and controlling orders and inventory across various sales channels, such as top online marketplaces, eCommerce websites, brick-and-mortar stores, and more.
The four types of inventory management are just-in-time management (JIT), materials requirement planning (MRP), economic order quantity (EOQ), and days sales of inventory (DSI). Each inventory management style has its pros and cons, therefore works for different businesses.
The 5-step inventory management process typically includes:
The ABC technique of inventory management, aka ABC analysis, is a method used to categorize items in inventory based on their importance and value to the business. It divides inventory into three categories: A, B, and C.
The ABC analysis can be used to help make decisions about which inventory items should be given priority in terms of stock levels and reordering.
Inventory and order tracking across multiple channels is critical for eCommerce businesses as it helps you ensure your inventory is on hand to meet customer demand. As a result, it also helps your business to avoid stock out or overselling and to reorder new stock on time and with the right quantity.
Choose the Multichannel Inventory Management Software that Fits Your Needs!
In conclusion, mastering multichannel inventory management is vital for modern retailers and businesses. Apply the inventory management method like First in, First out, or ABC inventory classification to your business to maximize the effectiveness of inventory management.
Although multichannel management might bring a lot of complexities, luckily, the evolution of technology helps us do the daunting task. Multichannel inventory management software like LitCommerce helps you embrace the benefits of this centralizing inventory management to thrive in the competitive eCommerce landscape. Contact us if you have any questions, and start managing inventory in one place today!