When retailers decide to begin listing their products on multiple sales channels, they are often so focused on the additional benefits of multichannel selling, that they forget that multichannel management is a crucial part of the sales equation.
Listing your products on multiple sales channels will allow more potential customers to view your product, but it also means you now have to manage inventory, sales, and sales data from those various sales channels.
Getting your products listed on multiple sales channels is the easy part. Tracking and managing the inventory that is listed on multiple sales channels is the tricky part. And when inventory is messy and unaccounted for, it can often lead to poor seller reviews, out-of-stocks, and oversells.
What separates the top sellers from the rest is being able to seamlessly track and manage inventory across multiple sales channels, while utilizing quantifiable sales data from these channels to understand how to help increase sales.
This article will focus on the best practices for managing inventory on multiple sales channels, as well as syncing and analyzing data from multiple sales channels.
I. Get Organized
Before beginning to even consider selling on multiple sales channels, retailers must ask themselves a very important question: “Am I struggling to manage my inventory from one single sales channel?” If the answer is yes, hit the brakes… hard.
If inventory management is a struggle when selling on only one channel, then surely multiple sales channels will be an even bigger struggle. Retailers often become overzealous and underestimate the extra work that goes along with adding more sales channels.
A - SKUs
SKUs are the easiest and quickest way to gain control over messy inventory.
A SKU can be assigned to each inventory item within your warehouse. SKUs allow everyone in your warehouse access to quantity levels, product descriptions, and variants of similar inventory items such as size or color. You can easily search for a specific product to locate it within your warehouse or see how many you have on hand to sell.
B - Warehouse Management System (WMS)
Once all of your inventory has been assigned unique SKUs, you need a central database accessible by most or all employees to store your inventory’s information. This central database is often known as a warehouse management system.
A WMS stores your inventory information and lets you know what you have on hand and available to sell. Smaller retailers will often forfeit investing in a WMS and instead use spreadsheets to keep track of inventory quantities.
Staying up-to-date with inventory via spreadsheets is tedious and time-consuming. And the more inventory you have to manage, the more tedious and time-consuming spreadsheets become. Retailers who begin selling on multiple sales channels while still using spreadsheets to manage inventory will quickly become overwhelmed - often resulting in out-of-stocks and poor seller reviews.
A good WMS will automate the inventory management process – eliminating the need for spreadsheets by keeping track of both inventory and sales for you.
C - Standardized Order Processing and Fulfillment
Business owners and warehouse managers need to run a tight ship around the warehouse whether they are selling on one or multiple sales channels.
Running a tight ship does not mean acting as a micromanaging dictator, rather, it means having a standardized procedure for Order Processing and Fulfillment. This includes receiving, picking, quality control, shipping, and more.
Having a clear, plotted out order fulfillment procedure ensures consistent picking and shipping times – saving you money and improving customer feedback. All members of the warehouse team should be familiarized with this process and made aware of the procedures expected of them for every order placed.
II. Syncing Data From Multiple Channels
Much like you have to learn to walk before you can run, it helps to master the above steps before expanding your online sales to multiple channels, otherwise it is very easy to become overwhelmed.
An unprepared retailer can quickly fall victim to out-of-stocks and oversells if not adequately prepared to begin selling on multiple channels.
The first challenge eCommerce retailers face when expanding their sales to multiple channels is getting orders and data to sync from all of their various sales channels to their WMS. And this is a perfect example of why spreadsheet inventory management don’t work when managing multiple sales channels – spreadsheets don’t allow for order syncing; they only allow for manual inventory updates.
For this example let’s pretend a retailer is selling on both Magento and Amazon.
A customer purchases three items from the Magento webstore for holiday gifts. When using spreadsheets for inventory management, the available inventory listed on Amazon must now be manually updated as well as the available inventory listed on Magento. While this may not be an issue if a company’s only making a half dozen sales a day, for a company that is growing and making hundreds or thousands of sales per day, this turns into a completely overwhelming, relentless, and painstaking task for multiple employees to suffer through daily.
III. Syncing Data With a WMS.
A well-designed WMS works to sync incoming orders, sales data, and inventory with all of your various marketplace channels.
If a customer purchases an item from your personal web store, then your WMS will work do update the available quantities listed on your Amazon store as well as your other marketplaces. This keeps your listed quantity on your marketplaces up-to-date with the physical quantities within your warehouse – reducing oversells and out-of-stocks.
With the time retailers save using a WMS to update their inventory, they can use that time to focus their efforts on growing their business. One of the most effective ways of growing a business and increasing sales is to gather and analyze the data that can be gathered from multiple sales channels.
IV. Collecting Data From Multiple Sales Channels
Once sales begin flowing in from your various sales channels, it’s important to begin gathering and storing that sales data into a central database or WMS.
This sales data can provide retailers with valuable insight to the purchasing habits of their customers as well as seasonal marketplace trends.
When selling bicycles, wouldn’t it be nice to see how many red Schwinn children’s bicycles compared to blue Schwinn children’s bicycles you sold in the month of December over the last five years? How many of each size, style, and build, in what combinations, at what price, broken down by channel?
This kind of specific information can help you prepare for holiday peak season. Rather than playing the guessing game and ordering as much inventory as you think you’ll need, gathering and analyzing quantifiable sales data from your multiple sales channels allows you to order what you know you will need.
Alas, just as managing inventory for multiple sales channels can be hectic, so can balancing an influx of sales data from multiple sales channels. Many retailers are beginning to rely on their WMS to not only manage their inventory, but also to gather and store their sales data; in turn allowing them to seamlessly manage inventory while making more informed purchasing, marketing, and marketplace decisions.
There is absolutely no guaranteed algorithm for increasing sales. That said, implementing the aforementioned steps can send your company, and hopefully your sales, in the right direction.
Initially, organizing inventory, syncing sales channels, and gathering data is tedious and time consuming, but it will ultimately lead to a more streamlined sales process, smarter purchasing habits, and allow for more time to be spent on marketing your company.
As a retailer, adding 1,5, or even 20 new sales channels can be an extremely profitable move for your business. But doing so before taking the steps to properly manage both inventory and sales data can be a detrimental mistake. Retailers often focus solely on the benefits of adding multiple sales channels without considering the time and effort it takes to manage the influx of inventory and sales that go along with multichannel sales management – the juggle, as we say in warehouse management, is real.
Make sure that your inventory quantities are in tip-top shape before embarking onto another marketplace!