As more retailers diversify their sales channel strategy, inventory management challenges become increasingly complex.
While stock control for one or two stores may be relatively simple, multichannel inventory management requires better visibility and the need to be agile and react quickly to trends.
In this post, we’ll walk through everything you need to know about multichannel inventory control, from the costs and causes of poor inventory management, to what you should look for in your search.
Let’s get started!
Coming to Grips with Multichannel Inventory Management
For many retailers, adding new sales channels amplifies existing inventory management problems.
Our advice? Perfect your existing eCommerce business processes before pursuing a multichannel strategy.
Disorganized inventory procedures will only multiply your headaches when you start adding multiple warehouse locations or additional marketplaces.
Coming to grips with inventory management processes has many benefits. It highlights which parts of the process are sticking points and where to optimize.
A review also helps you choose the right multichannel inventory management system when it’s time to upgrade.
Whether you have one store or multiple sales channels, a review at least every 12 months is necessary to ensure you’re not incurring avoidable costs and offering customers the best service possible.
Top 6 Ecommerce Inventory Management Software Systems
Ecommerce inventory management software is essential to selling online, especially on multiple sites.
This could be variations of your site for different markets and regions or third-party marketplaces like Amazon and eBay.
These six ecommerce inventory systems are feature-rich and have many multichannel inventory management tools that enable you to track inventory across multiple channels (without losing your sanity).
Sellbrite is one of the leading multichannel inventory management solutions on the market.
It’s owned by GoDaddy which has extensive knowledge of the online environment as a worldwide hosting, domain name, and website provider.
Regarding features, Sellbrite has everything you need in an inventory management tool and much more.
It can help you manage sales, inventory levels, and products across multiple online marketplaces.
It’s also versatile and has features that enable it to become your order management software, product management hub, and fully-featured analytics platform.
Getting your products into Sellbrite is easy by using the bulk upload feature.
Once done, you can list your products on any of the top marketplaces that Sellbrite integrates with (including Amazon, eBay, and Walmart) by creating listings for each marketplace using your uploaded data.
To tie everything together, you can turn on inventory sync. This will automatically update your listing quantities to match your available inventory. You can also use inventory rules such as “use 100% of inventory” and set minimum and maximum sales quantities.
Sellbrite’s pricing starts at their “Forever Free” plan, which offers up to 30 monthly orders.
Their most popular plan is the “Pro 100” at $29 per month, offering 100 monthly orders and FBA integration capabilities (for an upcharge).
In August 2020, Intuit acquired TradeGecko. This makes what is now QuickBooks Commerce an incredibly powerful tool, thanks to the financial, payment, reporting, and accounting tools that sit behind this omnichannel inventory management platform.
However, since then, it appears Intuit has rolled up the functionality of QuickBooks Commerce into QuickBooks Online, specifically under their “Plus” pricing plan.
QuickBooks Online boasts impressive features, allowing you to manage inventory, orders, payments, customers, and insights in one place.
Like Sellbrite, QuickBooks Online integrates with all the top marketplaces you would expect including Amazon and eBay.
QuickBooks Online offers inventory support starting at their Plus plan ($25.50/month) and going up to their advanced plan ($60/month).
Orderhive is true to its name, giving you a 360° view of your retail operation.
Users can manage everything from products and orders to customer data, returns, and shipments.
This true multichannel system covers much more than inventory and enables you to access this information anywhere as a cloud-based system.
Like the other eCommerce inventory management software systems, it has over 300 integration partners.
The standout feature is ecommerce automation. With innovative workflows, Orderhive can create orders and customer folders to auto-fulfill orders through selected warehouses.
Orderhive obscures their pricing information online, asking users to request a demo. According to some online reports, their pricing begins at $95/month and goes up to $500/month.
Ecomdash (recently acquired by Web.com) is a flexible, cloud-based inventory management platform most popular with mid-sized businesses.
One of the key strengths of Ecomdash is its flexibility to tailor it to your processes and inventory requirements.
For example, you can manage products by SKU, serial number, or your specific product identification system.
Automated inventory sync is another important feature to note. It keeps your inventory updated 24/7 across every single channel.
This reduces the risk of overselling items. It’s also useful if you sell kits or multipacks as the automation can detect when products have been selected as part of these deals and adjust overall stock figures accordingly.
Order management is another crucial strength that Ecomdash brings to the table. The full order management suite lets you print pick lists, packing slips, and shipping labels from one easy-to-use dashboard.
You can set rules for products to drop ship to suppliers and keep your customers updated with automated order status updates and tracking information sync.
Ecomdash offers a free plan for 30 monthly orders, going up to the Pro-350 plan ($350/month) for 10,000 monthly orders.
Ordoro, established in 2010, has evolved into a powerful cloud-based inventory management platform, providing an all-in-one solution for SaaS and enterprise clients.
It offers robust inventory management features including real-time tracking across multiple locations, kitting, purchase orders, and return management.
Ordoro also supports dropshipping with automated routing of orders across suppliers.
The platform integrates with various shipping carriers and sales channels and offers discounted shipping rates.
With its comprehensive features, Ordoro is a versatile choice for businesses seeking efficient inventory management.
Ordoro’s pricing starts with a free tier, with “Advanced” and “Premium” plans at $59 and $149 monthly, respectively. Additional modules for specific needs are also available.
Zoho Inventory is a cloud-based inventory management software designed for small to medium-sized businesses.
With multichannel selling, real-time inventory tracking, and comprehensive warehouse management, Zoho Inventory optimizes your inventory and order management processes. It ensures accurate stock count and order fulfillment, reducing instances of overselling.
It also allows for kitting and bundling of items, which is useful for businesses with complex inventory structures.
The comprehensive order management system provides features from creating sales orders and invoices to packing and shipping goods.
It integrates with popular shipping carriers, allowing for easier shipment tracking. Zoho Inventory also integrates with various eCommerce platforms and marketplaces, syncing your inventory across multiple sales channels.
Zoho Inventory offers a free plan for 20 monthly online orders, with more extensive features in their paid plans. The Basic plan costs $39/month for 1500 online orders/month.
The Standard plan costs $79/month for 10,000 online orders/month. For larger businesses, the Professional plan is $199/month for 30,000 online orders/month.
These plans offer more extensive features like batch tracking, composite items, and priority support.
Conducting an Inventory Management Review
The inventory management process has five stages. Understanding what happens at each stage makes reviewing and pinpointing potential problems easier. The five stages are:
- Purchasing: buying raw materials or finished goods
- Production: turning raw materials into sellable goods
- Holding Stock: managing the stock on your shelves and warehouse
- Sales: selling goods to your customers
- Reporting: tracking key metrics like inventory turnover to identify areas for improvement
Most retailers buy goods in a sellable format, only encountering stages 1, 3, 4, and 5. Despite this, each part of the process is equally important.
Useful questions to ask during the review that relate to inventory management include:
- Which suppliers have the shortest lead times?
- How accurate are suppliers with deliveries?
- Which products have the best inventory turnover ratio?
- Which products have the best sell-through rate?
- How accurate are our safety stock calculations?
- How often do we experience stockouts and on which products?
Regular reviews and tightening processes make managing stock across multiple channels more effective because you have templates and guides to help.
Reviews also highlight where your current inventory management systems aren’t performing, enabling you to create a feature/functions list for any new software you might purchase.
Choosing The Best Inventory Management Software
For multichannel inventory management to be efficient and successful, a few core competencies must be kept in mind, including:
- Maintaining a 360° view of your stock at every location
- Having the real-time stock and sales updates for every channel
- Running reports to support data-driven decision making
These principles directly relate to what you should look for when purchasing inventory management software.
Using different software for each sales channel doesn’t give you the visibility or real-time view of inventory and sales data that are required.
An all-in-one inventory management solution is the modern approach for multichannel retailers.
Top Inventory Management System Software Features
With these core competencies in mind, here are the top five features to consider when deciding on the best inventory management system.
You must be able to manage all your sales channels in one system. That means being able to do everything from updating product information for every channel to viewing sales and stock information to logging returns.
It’s also important for these channels to be connected and updated in real time.
One key reason is that customers no longer see “channels.” They want to shop how they want and when they want.
This omnichannel expectation means you must be able to offer an online store experience, buy online, pick up in-store, and buy online, return to the store.
If your systems aren’t connected it’s near impossible to offer value-added services like these and your customer experience will suffer.
Integrations to Third-Party Ecommerce Platforms
Increasing distribution through online channels like eBay, Amazon, and Walmart is core to business strategy for online retailers.
Multichannel inventory management systems must integrate with platforms like these.
One benefit is you only need to update your product information once rather than input it separately into each system.
This saves a huge amount of time and ensures product information is consistent across every channel.
Centralizing sales and product reports from all channels is a huge plus and makes sales analysis much easier and quicker.
Reporting & Analytics
The best way to optimize processes and grow your business is to create reports and analyze where improvements can be made.
Any inventory management software you choose must include a robust suite of reports.
Some key reports to look for are:
- Sales by Product
- Sales by Channel
- Inventory Valuation
- Cost of Goods Sold
- Product Average Purchase Price
- Returns Summary
- Low-stock/Out-of-stock Products
These insights allow you to take your business to the next level by reducing costs and maximizing margins.
Cloud-Based Access & Updates
Cloud-based software is particularly important for companies with numerous retail locations.
Where on-premise software is installed on-site and only accessible on-site, cloud-based software can be accessed from anywhere, as long as you have an internet connection.
This makes stock, sales, and overall business management much easier and more efficient.
It enables regional managers and head offices to access data from specific stores and regions in real time and make data-driven decisions instantly to maximize sales at any time.
Warehouse Management Capability
To ensure that deliveries and stock levels are managed accurately features like QR and barcode scanning are incredibly useful.
Manual data entry is time-consuming and prone to errors for companies with large warehouses that get regular deliveries.
Most modern inventory management systems integrate with handheld devices including tablets and mobile devices.
Up-to-date electronic records tell you who received deliveries with a time and date stamp, enabling you to implement batch tracking for improved product traceability.
Common Issues with Managing Inventory Across Multiple Channels
Before we finish, let’s look at some common inventory management problems that can hinder your growth and waste a lot of time if you don’t get ahead of them.
It helps you identify issues early on and implement solutions before it’s too late.
Most problems occur due to a lack of planning and systems unsuitable for multichannel businesses.
These four inventory issues are among the most common that businesses encounter.
Overstocks occur when a business orders an excessive quantity of a particular product or product range, often due to inadequate inventory management and inaccurate demand forecasting.
This scenario typically results from a failure to align stock levels with market demand, leading to a surplus inventory that ties up capital and warehouse space.
However, overstocks aren’t always a result of internal missteps.
External market factors, such as a sudden drop in demand, can sometimes prompt an overstock situation.
This is particularly common during certain periods like seasonal promotions or amidst unexpected events such as economic downturns or global crises, which can drastically alter consumer behavior.
Overstocks can also be a byproduct of over-optimistic sales predictions or a breakdown in communication between sales and procurement teams.
Therefore, businesses must have robust inventory management practices, including efficient forecasting methods and open, consistent interdepartmental communication.
This approach helps mitigate the risk of overstocking and its associated costs and challenges.
Out of Stocks
Stockouts are unavoidable in modern retail, but every effort should be made to minimize them. The impact on your sales might be more than you think.
A Harvard Business Review study found that if a product is out of stock in-store, 21%-43% of consumers will go to another store to buy the item.
The real-world impact of stockouts is lost sales and frustrated customers. Modern consumers have an “I need it now” mentality, meaning if you don’t have it, they will go to someone who does.
Good inventory software will run reports on low-stock and out-of-stock items, with some automatically placing orders to suppliers when stock hits a low-threshold trigger.
Offering a fast delivery service is essential for online retailers, especially with services like Amazon Prime offering same-day delivery in some areas.
Despite this, many retailers are still struggling because they have ineffective inventory management processes in place and lack visibility of stock across all locations.
Issues range from:
- Overselling products because they don’t know what they have in stock
- To slow pick and pack processes because they don’t track product locations accurately in warehouses.
The size of the US is a barrier to offering services like next-day delivery, although there are solutions.
Locating your stock closer to your customers is a fantastic way to cut delivery times and costs. One way to do this is by dispatching ecommerce orders from the closest store to the final delivery address.
Returns are an inevitable part of modern retail. No retailer has a 0% return rate, and they never will. However, a research report from retail analyst firm IHL Group found that up to half of all returns are partially “preventable.”
Product defects and size issues are the most common reasons for returns, most prevalent in the apparel industry.
Another common reason for returns is when the wrong product or quantity is sent. This has a domino effect, causing issues with overselling and underselling.
Many errors like this wouldn’t be picked up during a manual stock management process, highlighting the importance of having the right system to track the full inventory lifecycle process.
If you’re a retailer selling across multiple sales channels, multichannel inventory management should be a top priority.
Having the right products in stock at the right time can be the difference between exceeding sales targets and missing them completely — especially when managing multiple warehouses.
Luckily, a new breed of software has entered the market called multichannel inventory software.
These platforms enable you to manage everything from orders to inventory to shipping and returns in one system.
Whether you’re selling in one store and online or across multiple online marketplaces, these platforms will help you to manage and grow your business effectively.