How To Stop The Headaches Of Inventory Management for Multichannel

Inventory makes your dropshipping business successful, but let’s be honest: it’s a constant headache managing inventory effectively. 

The minute you start selling your products across multiple channels, you have to become a full-time juggler. Multichannel inventory management is about much more than listing your products on several platforms, after all: you have to manage your inventory figures across all of these channels going forward. 

This might be easy enough with one or two channels, but when you sell on 10+ platforms, this quickly becomes an eCommerce nightmare. 

Inventory Management for Multichannel Retailers

Although multichannel comes with its own set of problems, the difficulty shouldn’t scare you away from expanding your business. 

Today, it isn’t enough to sell on your own website: you have to be competitive. Other dropshippers are on multiple platforms, taking up their share of the market. That means you need a bigger footprint to expand your own business and claim your piece of the pie. 

And you aren’t alone: 52% of eCommerce stores are multichannel. Whether it’s via: 

  • eBay
  • Amazon
  • Etsy
  • Shopify
  • Instagram

… or countless other platforms, customers expect to find you in multiple places online. 

Although multichannel is pretty much a requirement for eCommerce, it makes your business more complex. Multichannel inventory management comes with more logistics headaches, including manual data entry for all of your inventory. 

To make the most of your business, you need to invest in tools, processes, and plans that help you grow. Understand the real benefits of multichannel inventory management and follow our 6 tips to finally master your inventory. 

The benefits of multichannel inventory management

There are so many barriers to successful multichannel inventory management, including:

  • Too much stock: This is a drain on your bank account. You can’t do anything because your money is tied up in inventory, which restricts your cash flow.
  • Storage costs: You have to pay to store your unsold products before they sell. The more you store, the more you have to pay. Also, unsold items don’t leave room for your high-performing SKUs. That means problems can spill over across SKUs if you aren’t careful. 
  • Overselling: Selling on multiple channels runs the risk of overselling your products. This makes customers unhappy and can lead to cancellations or bad reviews, which are never good. 

checking Inventory Management for Multichannel Retailers

These barriers might make you want to throw in the towel, but that would be a mistake. You just need the right approach to make multichannel work for your business. And when you do, your business will prosper. 

Still not sold on multichannel? Consider the benefits of managing your inventory on several platforms. 

1 - Consistent customer experience

Whether they find you on Amazon or your website, you want customers to have a consistent experience. Inventory management helps you track inventory on all platforms.

That means you can easily see stock levels and plan your reorders more efficiently. This is great for planning your inventory turnover more efficiently, holding just the right amount of inventory. 

Done well, you won’t even notice inventory management is working in the backend. This creates a better experience for both your shoppers and for you. 

2 - Save time and money

Move away from manual inventory management. The right inventory management solution, like Spark Shipping, will update everything almost immediately. 

Multichannel is complicated enough already. Don’t mistype an inventory figure; let your system do this automatically so you give a consistent experience for your customers. Automation removes human error and updates everything almost immediately. 

3 - Improve visibility

Inventory management helps you see real-time updates on your inventory across all platforms, so everyone in your business has the same information. 

Plus, you can even track your data and make changes based on your KPIs. This means you can reorder your SKUs at exactly the right time. 

4 - Forecast performance

Know exactly what your customers want with proper forecasting. Inventory management gives you the data necessary to forecast customer demand so you’re ready with the appropriate amount of inventory. For example, if you have historical data about when customers buy Santa hats for Christmas, you know you need to order enough stock by October 20 to fulfill those sales. 

Forecasting helps you see how much cash you have on hand for essential tasks, like business development or marketing. It also makes it possible to find potential new channels for expansion. 

assessing graphs on Inventory Management for Multichannel Retailers

5 - Ship faster

Nobody likes long shipping times. Inventory management makes it possible to reduce shipping delays and keep your customers happy. 

For example, your inventory solution can figure out where your products are compared to the customer’s location. When you fulfill that order via a local warehouse, you reduce shipping costs and give customers the 2-day shipping they expect.

6 tips to manage multichannel inventory

Done well, multichannel inventory management enhances your business. It means you can make more informed decisions in less time. No matter which channels a customer orders from, you need to fulfill those orders as efficiently as possible. Follow these 6 tips to better manage your inventory across channels. 

1 - Set order values

Have you set product minimums? These limits set a minimum amount of inventory you need in stock to fulfill customer needs. Most retailers set this to 0, but it depends on your business. For example, if you’re selling on Marketplaces, you’ll want a larger buffer because out-stocking on Amazon is very bad. 

Fortunately, you can rely on your historical data to set a comfortable cushion so you don’t suddenly run out of in-demand inventory. Once you hit your minimum, your inventory management system will automatically reorder as needed from your supplier. Easy, right?

2 - Forecast performance

Every eCommerce brand should use historical order data to forecast demand. When you forecast, you can see the history of a product’s sales and use that data to predict the future. This means you’ll always have the right products in stock at the right time, which is extra important if you have any seasonality in your business. 

3 - Measure your performance

Data is essential for better dropshipping. The problem is that multichannel gives you too much data. 

How can you tell what’s important? Which metrics align between platforms? It’s overwhelming. 

You can check the data that matters by integrating all of your channels in one place. A system like Spark Shipping helps you understand your most critical KPIs like: 

  • Turnover
  • Profit margins
  • Fulfillment rates 

… in one place. No more sifting through 10+ platforms for your data. 

business owner checking Inventory Management for Multichannel Retailers on an ipad

4 - Monitor your SKUs and sales channels

While it’s helpful to look at your total eCommerce performance, you still need to break down your metrics by sales channel and SKU. 

Make sure your inventory management is solid on your hero SKUs first. They account for a huge percentage of your sales, so this is critical. An inventory analysis will identify your top-performing products so you know which goods contribute to the majority of your revenue. From there, you can track individual SKUs across your business. 

You need to look at your sales channels, too. Your inventory management solution should let you see how each SKU is performing on each channel, too, so you can optimize on a SKU level. 

5 - Watch your product pricing

Are you pricing all of your products identically across platforms? Depending on the platform and fees you’re paying, that might not be a wise move. Some costs are specific to a platform or marketplace, while other channels won’t include extra fees. You’ll need to build any extra costs into your pricing to stay profitable. 

For example, on Shopify and Bigcommerce, you should consider including credit card processing fees into your pricing. On Amazon and eBay, you’ll want to factor in category and listing fees. These fees mean that your prices might not be consistent across all of your channels, so keep that in mind. 

calculating Inventory Management for Multichannel Retailers

6 - Integrate and automate

Never attempt to update your inventory manually. When you sell on multiple channels, there just too much risk for human error. 

Spark Shipping automation helps you respond to orders more quickly, ship faster, and save more time. Plus, it synchronizes with most suppliers and your website, which gives you a single source for all of your inventory information. 

The bottom line

Once you set it up, you won’t even notice inventory management working for you. 

But left unchecked, improper inventory management can wreak havoc on your business. Manual inventory management just isn’t possible when you’re running a multichannel retail business. Instead of sinking into the hassle of managing your inventory, follow these 6 tips to focus on growing your business with your inventory on autopilot. 

Rely on inventory management systems to run a tighter supply chain and manage your inventory more effectively. Try Spark Shipping to integrate all of your platforms with your suppliers. See how our solution can streamline your business.