Partner Article by Lauren Turner, Partnership Marketing Manager at Linnworks
If you’ve not really looked into multi-channel inventory management yet, let us break it down for you: it simply means streamlining the inventory management process across your multiple online stores.
Say, for example, you have an online store set up on WooCommerce selling watches. That’s your main store, but you also sell your watches on Amazon and have an eBay account too. The problem is, all the items you have for sale across those three channels belong to the same inventory – you don’t have separate inventories for each channel.
This means that when you sell an item on eBay, you have to log into WooCommerce and Amazon to update your inventory, or else you run the risk of overselling (i.e. selling the same item on two separate channels when you only have one of that item in stock). Keeping tabs on more than one channel with a shared inventory can become time consuming and leaves you open to making more errors – and annoying your customers as a result. This can all lead to monetary losses and have a detrimental effect on your reputation as an online seller
This is where multi-channel inventory management comes in. By re-evaluating your management process and using software to link all your stores in one place, you can manage your inventory more effectively. So instead of logging into WooCommerce, Amazon and eBay to update stock, you can simply log into a software and update and manage your stock from there. Any sales will automatically update across your channels.
So now you know what it is, let’s look at why it’s important to have an effective multi-channel inventory management system in place and the specific benefits for doing so.
You can’t put a price tag on time – once it’s gone, it’s gone. Employing inventory management software with all its automation capabilities means you don’t have to spend your valuable time manually updating stock and checking data.
Most multi-channel inventory management solutions will have the following time-saving tools:
1. Inventory Management – syncs all of your sales channels, prevents over-selling and lets you check stock levels.
2. Listings Management – saves time by letting you upload and list products to multiple sales channels (e.g. Amazon, eBay, Etsy) and your shopping cart (WooCommerce, Magento, Shopify etc.) in bulk from one login.
3. Order Management – links and integrates your sales channels and your shopping cart. This means you can view, track and download your orders all from one place and batch print packing slips, pick lists and invoices.
4. Shipping – integrates directly with Parcelhub, letting you batch print shipping labels, invoices and other paperwork.
5. Reporting and Accounting – some systems let you link your data directly to your accounting software (e.g. Xero, Quickbooks), saving you time and helping you make the best possible business decisions.
There are multiple ways in which effective multi-channel inventory management can help you save money:
Reduce stock overhead costs
There’s more depth to your inventory costs than the amount you paid when you first purchased your products. There may be existing finance charges from purchases on credit, or you may need to cover the costs of hiring, powering, and staffing wherever your inventory is housed. The stock you’re carrying – some more than others – has some risk of depreciation in value thanks to expiry dates or obsolescence.
Thankfully, these inventory overheads can be reduced by cutting the amount of inventory you keep at once. Remember: sitting on sale stock is never good! Effective multi-channel inventory management can help you forecast your inventory needs based on sales trends and upcoming seasonal changes. You can then use your measured inventory turnover rate to decide how much of each product you want to reorder from your suppliers.
Prevent inventory shrinkage and loss
Inventory loss has always been an issue in retail, both online and offline, with the average shrink percentage in retail being around 2%. Loss can be due to anything from damage, theft, or errors in counting and receiving. And while 2% might not sound like a lot, you could do without the excess losses in profit (especially if it’s for no good reason).
Thankfully, effective multi-channel inventory management can help you reduce inventory shrinkage. How?
Well, firstly, lots of inventory count errors boil down to mistakes made by warehouse operators. It’s common for distributors and wholesalers to mispack shipments, but counting every unit included in incoming shipments will easily catch errors in the shipment’s contents.
Secondly, another big cause of inventory loss is the wrong items being shipped with a sales order. You could save thousands annually simply by reducing the number of errors made during picking and packing errors. The most effective way of reducing order errors is to incorporate barcode scanning in your picking process. This kind of solution is often provided by a multi-channel inventory solution and can be tracked online with your inventory management software.
Lastly, more robust stock management can reduce the chances of discrepancies in reported counts. Performing smaller counts more often and synchronising your stock across sales channels can keep stock inaccuracies to a minimum while giving you more time to identify any discrepancies that do occur.
As well as saving you valuable time, an inventory management system can also significantly increase the efficiency of your business operations.
In fact, with such a system, you will be able to automate many parts of the selling process, from listing creation, order processing and stock control, right through to the printing of shipping labels, order fulfilment and stock replenishment.
More advanced solutions will also be able to improve the efficiency of your picking and packing process. For example, by opting for a system that allows you to add multiple bin locations to an item within a single warehouse, you can make better use of your warehouse space. More specifically, you can strategically store your inventory to speed up your picking and packing process.
Errors are reduced
I know we’ve already mentioned errors multiple times, but minimising errors is such a key part of effective inventory management! Think about every mistake you’ve made in business and how difficult (or downright embarrassing) it was to fix. Well, an effective inventory management system could be the solution to a lot of those business woes.
You’re letting a machine (which is simple to use and only does exactly what it’s told) do the hard work, and by doing that you’re taking a big part of the risk of human error out of it. You can relax knowing that a big chunk of data work and admin tasks are taken care of, so you don’t have to worry about inaccurate reporting or overselling between channels anymore.
Reordering is taken care of
When your stock starts to dissipate, you’ve got to replenish it or you risk annoying willing potential customers who want to buy your items but can’t because they’re out of stock. But running a business is hectic as it is and you don’t always remember to reorder, and sometimes items sell out quicker than usual.
Reordering can also be time-consuming. Think about how long it takes to call suppliers: sometimes you’re put on hold, or maybe you have to deal with issues as a result of language barriers or time differences which can increase the possibility of human error.
Thankfully, inventory management tools often have reordering functions in place so you can pre-set values that, when hit, automatically order new stock for you, saving you the time and effort of constantly re-checking stock.
Check your stock from anywhere
Want to take a holiday to the Caribbean but can’t spare the time away from the office? Well, an effective multi-channel software lets you check your stock from the beach! Seriously though, it’s important to have a solution in place that lets you manage your inventory from wherever you are.
Say you’re on the train to an important meeting, but you’re getting customer emails about order issues – you can log into your multi-channel software and solve the problem then and there instead of waiting until you get back into the office. This kind of feature is also handy for updating your stock on the go – while you’re picking and packing in a warehouse, for example.
Ultimately, having an effective multi-channel inventory management system in place will help you run your business more efficiently and minimise the risk of upsetting potential and existing customers. The happier your customers, the better your reputation as a seller, so make sure your inventory management is up to scratch – or risk losing business.