Tracking inventory across multiple sales channels may seem daunting, but it is not only manageable for businesses of all sizes, it can become a strategic part of your multichannel growth strategy. A streamlined and integrated inventory management system can mean the difference between feeling like you’re always struggling to stay one step ahead of demand and leveraging inventory for future growth, even with limited investment in fixed assets.
Streamlining Multichannel Inventory Management
As with many aspects of managing a multichannel selling strategy, the name of the game is integration when it comes to multichannel inventory management. An extensive 1 to 2-day delivery footprint is essential to take full advantage of multiple sales channels, which means not only managing inventory across multiple channels but also across multiple warehouse locations. Choosing a fulfillment partner with the technological capabilities to integrate with your current Commerce Operations Management (COM) strategy will not only simplify multichannel inventory management but will allow you to leverage your available inventory strategically and have full control of your fixed assets.
An outsourced fulfillment partner should have both the technological capabilities and warehouse SLA’s that allow near real-time visibility into inventory levels across all sales channels and at all warehouse locations. This level of visibility will help you stay one step ahead of stockouts and oversells that often come at the cost of refunds, consumer trust, and even ratings and reviews. This data can also be aggregated through an advanced Order Management System (OMS) to identify out of stock patterns to set rules and automated notifications and reorder points when inventory runs low.
Advanced insights also help you identify inventory turnover rates and find your sweet spot in terms of inventory carry costs and storage costs without risking running low on inventory. Over time this data will help you identify seasonal patterns and forecast demand. Not only will you be prepared to take on busier seasons, but you can also strategize your marketing to double down on seasonal growth opportunities with confidence that your supply chain will be fully equipped to meet the demand.
In a 2020 survey, 32% of merchants indicated that poor inventory management was their biggest fulfillment challenge, while 31.2% cited incorrectly filled orders (which inevitably lead to preventable returns). This kind of mismanagement and preventable returns significantly drives up operating costs and reduces the return on investment in your multichannel strategy. However, in the same survey, 44% of merchants indicated that outsourcing fulfillment led to greater operational efficiency, and 32% found that an outsourced fulfillment partner provided speedier and more reliable fulfillment.
Multichannel Strategy with Limited Inventory
A particular challenge for SMB’s is a limited ability to invest in fixed assets like inventory. When carrying limited inventory it can be difficult to determine which channels to prioritize: should you heavily stock sales channels that you know will be fast-moving and feed secondary channels as needed? Should you expose all of your inventory to all sales channels at once?
Every channel will have a different profit margin based on cost to acquire customers, average order value, and commission rates among other factors. Having full visibility into your inventory levels and the ability to move them seamlessly across sales channels allows you to weigh top-line revenue against margin so you can decide which channels to feed inventory to, which to market more aggressively, and which to reconsider altogether. This tactic, known as ring-fencing, enables SMB’s to wring out every ounce of profit available in their limited inventory.
Prioritize Tech and Integrations
According to Google, product searches including the term “available near me” grew by 100% in the past year, underscoring the importance of careful oversight of inventory levels and integrations like Google’s local inventory ads. Pairing local insights with Google’s Free & Fast shipping annotation can drive your product listings to the top of the search results, and drive traffic to all of your channels.
However, a multichannel selling strategy is only as strong as the technology that supports it. Finding the right multichannel selling software that integrates with all of your marketplaces and your ecommerce platform will simplify sales operations, and finding a fulfillment partner that prioritizes technology will simplify supply chain and make fulfillment a revenue driver for your business. The right fulfillment partner will help you make multichannel inventory management an asset and growth lever as part of your multichannel selling strategy.
To learn how Ware2Go simplifies multichannel inventory management through fully-integrated technology, reach out to one of our fulfillment experts.
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