Multichannel Inventory Management: The Ultimate Guide

 

 

 

Today’s B2B buyer expects to find and purchase a product in a matter of minutes. Is your business supporting this multichannel customer experience?

 

If your business has an online presence with multiple channels, then you’re on the right track. Today’s consumer demands the ability to access your products from your website and a variety of online marketplaces. In fact, 87% of consumers said they want a uniform experience between various channels. The easier it is for them to purchase, the more loyal they become.

 

Additionally, the same study found that 66% of customers preferred retailers who provide inventory visibility on their digital channels. Delighting customers with a transparent and consistent experience is crucial, but it also creates new responsibilities for your business on the back end.

 

A multichannel inventory management system can help remove these pain points and provide immense value to your business and customers. A multichannel inventory management system can ensure your inventory remains in stock across several channels like Amazon, eBay and your website. Visibility across channels is not only demanded by customers, but required for your business to run smoothly.

 

In this guide, we’ll take a deeper look at multichannel inventory management, the benefits of this process, and how a multichannel eCommerce experience can scale your business to the next level.

 


 

What is Multichannel Inventory Management

 

Inventory management is how a business tracks the flow of product through the entire supply chain from the manufacturer, through the warehouse, the shipper, and ultimately to the customer.

 

Multichannel Inventory Management is the process of tracking multiple products across multiple eCommerce touchpoints. For example, you may sell a product on your website and on Amazon. A strong multichannel inventory management process will keep tabs on your inventory stock levels so you can guarantee a sale when a customer makes a purchase. It also offers significant benefits compared to an Excel spreadsheet. Most importantly, it offers real-time updates using EDI, or electronic data interchange, with suppliers and eCommerce channels. Beyond logistics, a strong  inventory management system can also provide insights on KPIs such as stock turnover and gross margins.

 


 

Benefits of Multichannel Selling

 

There are manifest benefits to selling via multiple channels, of which we will detail the three most pertinent below.

 

  1. Build A Strong Brand

Selling through third party marketplaces like Amazon can greatly expand your reach, but do impose strict limits on marketing materials. Using your own webstore in addition to these outlets will allow you to segment customers and offer them targeted promotions. . Running your own webstore can also decrease listing costs and improve gross margins.

 

  1. Create New Revenue Streams

Having multiple channels reduces the risk of over reliance. If you sell in only one marketplace or channel, your sole revenue stream could dry up.. Similarly, if you have internal technical problems with your own website, selling through a variety of third-party channels keeps revenue flowing while you address the issue.

 

  1. Gain Access to Markets

Many of the largest online retail platforms have unique niches. For example, Etsy is especially strong when it comes to listing handmade goods and crafts handicrafts and unique clothing items. Listing product across multiple channels allows you access to these highly- developed and active markets.  

 

Of course, there are many more benefits to selling across multiple channels, and many depend on the specific nature of your business. This is why it’s important to be selective when choosing a multichannel inventory management system.
 

Here are some things to think about when analyzing your choices:

  • What kind of inventory methods do you currently use? Do you have a warehouse or do you utilize drop shipping?
  • Are you shipping different SKU varieties, such as clothing in several sizes?
  • Who are your users for the multi channel inventory management software in the business? How easy is it to use?
  • How easy is it to access the data you need? Is the system cloud based? More importantly, is it reliable?

 

The important thing here is to craft a solution that fits your business needs. This is not the time for a one size fits all approach.

 


 

Risks of Poor Multichannel Inventory Management

 

What are the consequences of a slow eCommerce inventory management system?

 

Imagine you run a business that sells a seasonal item like lawn furniture. In the past, you carried too much inventory and had to sell at a discounted priced because styles changed so quickly compared to last year. So now you run a lean inventory. One day during the high season, you receive a large order on your website, but can’t update your inventory spreadsheet until the end of the day. Within that window, you receive another large order via Amazon. However, you don’t have enough stock to meet both orders. What happens now?

 

  1. You could frantically contact your supplier and ask for a quick turnaround on inventory with no guarantee on shipment dates.

  2. You might have to offer slower shipping. This is a major problem as consumers demand fast shipping in the modern eCommerce world.

  3. In the worst case, you may have to cancel a sale.

 

Beyond these immediate risks, there are additional, long term risks. Internal morale could plummet if your team puts in the hard work to make sales and that work goes to waste. Perhaps most importantly is a risk to your brand. All businesses rely on stellar branding, but eCommerce is especially driven by reviews. In fact, product reviews are a key driver in turning customers into brand loyalists. And of course, many product reviews include details about order fulfillment.  Failure to fulfill orders in a timely manner could result in harm to your brand and customer service reputation you worked so hard to create.

 

Luckily, you don’t need to accept this scenario as your fate if you have a multichannel inventory management system in place.

 


 

Capabilities of a Multichannel Inventory Management System

 

As the above example shows, you need a multichannel inventory management system that can manage the following challenges and processes as your business grows:

 

  1. Overstocking

Overstocking can be a problem because your company has capital tied up in product that could be used to grow the business in other ways. One solution is drop shipping, where you place orders directly from the manufacturer. This requires close alignment between your company and the manufacturer.

 

  1. Understocking

This poses an even greater problem as it inhibits the ability to meet customer demand. It is especially relevant for businesses whose product has variable demand.

 

  1. Shipping costs and times

Many of the largest online retail platforms have unique niches. For example, Etsy is especially strong when it comes to listing handmade goods and crafts handicrafts and unique clothing items. Listing product across multiple channels allows you access to these highly- developed and active markets.

 

  1. Supplier relations

This is a major contributor to your overall supply chain health. A multichannel inventory management system keeps your suppliers updated on your changing needs so you don’t need to request rush orders.

 

  1. Customer service

Customer Relationship Management (CRM) is extremely important in the eCommerce arena. A strong CRM can help you track the entire lifecycle of customer interaction. But it offers more than just tracking. An effective CRM can allow your business to forecast and address the rapidly shifting needs of your customers.

 

  1. Reduce errors

A multichannel inventory management system produces efficiencies by cutting down on time to fulfill orders all the while reducing errors. Instead of multiple people updating a spreadsheet across multiple channels and locations throughout the day, updates happen in real-time. Once a sale is made, the inventory reflects that purchase in the system.

 


 

Easily Manage Your eCommerce Business With Omnichannel eCommerce Software

 

You can manage your inventory, customers, reporting while delivering an exceptional customer experience when you use the right multichannel inventory management system. Also known as omnichannel eCommerce software, it allows you to consistently serve and support every customer no matter where or how they prefer to shop with you.

 

When choosing a omnichannel eCommerce software and inventory management system, make sure it has the following features and capabilities to support your business:

 

  1. Easy to use dashboards

This visual feature will make accessing and understanding the health of your inventory stock and business easier than ever. Leave behind clunky spreadsheets and enjoy the benefits of both a strategic 10,000 foot view, as well as the ability to drill down on more granular data.

 

  1. Accessible data

Through the cloud you can access it anywhere on a variety of devices. Increased visibility across channels and the business makes everything run more smoothly.

 

  1. Real-time reporting

Deep and real-time reporting captures KPIs to keep up with the fast pace of the current business and strategize for the future. Knowing you have your day-to-day on lockdown will free up bandwidth for you to grow the business.

 

  1. Financial integrations

The software you choose should integrate well with your back-office operations. Accounting is always a challenge for scaling businesses, and becomes even more complicated with multiple channels. Choose a software that seamlessly integrates with QuickBooks, or your preferred financial tool, so you receive even more support on the back-end.

 

  1. Trusted partnerships

You’ll want to use a software and system that has strong partnerships with a variety of selling platforms including Wal-Mart, eBay, and Amazon to assure tight integration across a slew of eCommerce channels.

 


 

Systum is a single platform that replaces all the software you use to engage and support your customers, while also providing real-time visibility into your business.

 

To learn more about how Systum can help you achieve multichannel success, visit our website.

 

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