Accurate inventory management is arguably the single most important element of a successful eCommerce strategy. Failing to properly count, track, or ship products can be devastating to the customer experience – and your bottom line. Approximately 43% of American small businesses track their inventory through manual spreadsheets, while country-wide inventory accuracy remains locked at 63%. In DACH markets, inventory stocks have risen to an all-time high, and are projected to reach a $200 million in value by 2023.
Unmanaged inventory is expensive, time-consuming, unnecessary, and it saps vital resources from your business. It’s for this reason that more than 72% of retailers plan to invest in a multichannel inventory management tool.
Let’s explore some of the reasons why eCommerce professionals may consider multichannel selling tools, as well as what to look for in your next major platform.
What is Multichannel Selling?
Multichannel selling is the act of selling products or merchandise across multiple channels, both online and offline. This diversification allows sellers to capture various parts of the market and reach buyers in their preferred environments. It also empowers buyers to make confident, recurring decisions.
A few common channels for multichannel sellers include:
- The immediate online store found on a brand’s website.
- Third party marketplace integrations like Amazon, eBay, or Etsy.
- Social media platforms like Facebook or Instagram.
- In-store purchases (brick and mortar buildings).
- Mail order or catalog purchasing activity.
While each has its merits, it’s essential to choose the most appropriate one for your business if you want to see success. To make sure you hit all the right notes with your customers, it is important to carefully pick and choose opportunities that are in line with available data.
What is Multichannel Inventory Control?
Multichannel inventory control, or multichannel inventory management, is the process of managing inventory from various channels across multiple warehouses or storage facilities. In other words, it’s a method of tracking eCommerce inventory from any and every location. Proper control allows owners to calculate inventory levels, reorders, and potential forecasts, among other things.
Although multichannel inventory control is not the same as multichannel selling, both options give users the maximum amount of power over their decision-making processes. Multichannel selling provides buyers with multiple touchpoints to a brand, while multichannel inventory management provides businesses with a comprehensive view of all inventory positions.
Why Do You Need to Manage Inventory Across Multiple Channels?
The simple truth is this: if your eCommerce business is selling products from multiple sales channels, then multichannel inventory management is absolutely necessary. Not only is it extremely difficult to maintain a single inventory count that includes all channels and variables, but multichannel inventory management can save a significant amount of time and money, helping your business grow at scale.
A few major benefits of managing inventory across multiple channels include:
Above all, multichannel inventory management allows business owners to make better decisions. Greater visibility, better access to data, and improved metrics all contribute to happier customers, and a better overall experience.
How Can Multichannel Inventory Management Software Help You Scale Your Ecommerce Operation?
By increasing cumulative visibility and focusing on organization, multichannel inventory software can minimize wasted inventory by hosting critical data points. Let’s take a look at each of these factors in detail.
Increase Stock Transparency
As businesses increase their selling channels, fulfillment capabilities will naturally need to scale as well. Without multichannel inventory software, owners will need to use limited information to organize their stock and warehousing sites. Shipment costs and additional logistics fees could be costly, and increase with the number of single-packaged items.
This concern is largely circumvented with multichannel inventory software. The best programs provide a bird’s eye view of all your storage sites, no matter where they’re located. This allows owners to understand how much stock goes towards the finalized sales of each channel, enhancing their understanding of current needs and forecasts.
Reduce Wasted Stock
Around 20 to 30% of all inventory is classified as ‘dead,’ taking up space, reducing profits, and otherwise burning a hole in their owners’ pockets. Without additional visibility around internal supply and demand, eCommerce companies could be spending thousands of dollars’ worth of unnecessary upkeep.
Multichannel inventory software helps businesses quickly identify what’s selling from their warehouses – and what needs to sell more. This allows for a dramatic reduction of wasted stock via product bundling, discounts, or forecasting for seasonality. Undersold inventory can be stocked far less often, and reduce both restricted cash flow and the amount of wasted product.
Stronger Warehouse Organization
Warehousing is a major aspect of management for eCommerce businesses, especially within multichannel selling strategies. Having visibility into what products are being sold together can help to organize warehouses in a coherent, productive, and accessible way. High-movement stock that is organized within the same space results in a far easier shipping process, leading to better customer satisfaction.
Better warehouse organization regularly leads to better growth. The right software can help to capitalize on the greatest amount of storage space available, maximizing order fulfillment and revenue. Attempts to do this manually, while valiant, rarely result in lasting change.
Perhaps the greatest benefit of multichannel inventory software is its highly accurate data points. This helps businesses make better decisions about all elements of their inventory, including fulfillment. Organizations can take quick, decisive actions to double their inventory or upsell products, accessing deep insights at a glance.
Software that helps to gather concrete numbers on sales and inventory allows businesses to collect data for the long-term. This leads to better insights about the business and its product, as well as which sales channels are underperforming others. By reducing errors and eliminating data inconsistencies, businesses can better capitalize on new demands and opportunities.
Find the Right Multichannel Inventory Management Tool: 5 Things to Look For
There are five major elements to look for in multichannel inventory management software, namely forecasting tools, product-level tracking, real-time data, intelligent insights, and integrative capabilities.
From a software perspective, inventory forecasting is the process of understanding which items need restocking at what time. This includes understanding what has and hasn’t performed well historically, allowing you to make predictions of the future.
Be sure to invest in software that provides the ability to track specific products, bundles, or kits, as well as single sales channels and warehouses. If the program doesn’t offer stock unit tracking or a channel view, it’s likely not worth the money.
Barcoding and Scanning
No inventory management tool is complete without product-level barcoding and scanning. This refers to item-level tagging that provides a means of organizing product, and real-time data about product success and stock.
Correctly tracking item-level tagging can significantly improve inventory validity. According to one study, inventory accuracy rose from 63% to 95% in a single implementation.
A software program that offers live updates of sales and inventory levels allows businesses to make quick decisions about next steps. Consistent updates allow personnel to monitor changes as they take effect, enhancing marketplace agility.
Most inventory management software offers some sort of progress tracking, but not necessarily in real time. Be sure to ask any product representatives about their platform’s capabilities.
Analytics and Data Collection
Look for software that offers intelligent business insights via analytics and data collection. Not only does this allow businesses to make thoughtful decisions about inventory and vendors, but it greatly enhances their measurement of KPIs.
Multichannel inventory management software from Xentral allows clients to track inbound and outbound logistics data at any time, condensing everything into a single dashboard. With highly accessible analytics, eCommerce companies can centrally manage sales channels with a host of data collection capabilities.
Finding a management tool that integrates seamlessly with your current suite of business applications is always the goal. Choose software with modern, easily customizable APIs, as well as plenty of room to scale.
Xentral’s suite of tools offers standardized interfaces for hundreds of integrations, including HubSpot and Amazon. Our advanced inventory management system allows users to expand and personalize their experience with more than 1,600 touchpoints.
Do More With Your Inventory With Xentral
Whether you’re looking for your very first software partner or making the switch from a previous provider, Xentral can be the platform to set you up for success. See what Xentral can do for you today: book a demo with a team member today to see our solutions in action.