Inventory can be a massive problem for retailers. In fact, it’s a problem that costs $1.75 trillion every single year. How can this be? Well, $634 billion is wasted every year on loss of sales, due to inventory not being in stock. And a further $472 billion is thrown away due to overstocking issues. This figure only looks set to rise as well, as more retailers use multichannel selling in order to increase profits.
Online selling is an attractive proposition, with accessible ecommerce platforms like Shopify and Woocommerce and marketplaces such as eBay, Amazon and Etsy readily available for beginners. Multichannel selling also offers additional engagement points for consumers, requiring you to spend less time laying the groundwork to bring in customers.
Yet as online spending rises and the number of platforms used by businesses increases, what can retailers do to effectively manage their inventory across multiple channels? Well, inventory management systems offer many benefits. Let’s take a look at 5 benefits of inventory management for multichannel retailers.
Manually updating your stock across all of your channels can be a very tiresome process. You can feel like you are up to your eyeballs in spreadsheets, especially if you have a large product range. Here is where the issue of overselling and underselling materializes, when you manually manage your inventory.
You may sell the last of a specific item on one channel and then receive another order on your website before you’re able to update your stock. Since that item is now out of stock, you have to disappoint your customer by informing them that the product is no longer available. An inventory management system will automatically update your stock across all of your channels to avoid this problem.
Automated inventory updates will in turn save you time, which you can now spend on identifying your best sellers and ensuring they are sufficiently stocked. What’s more, updating inventory is now one less administrative task for you to do, so you can use your time to promote and expand your business.
A lot of inventory systems are predominantly cloud-based as well, meaning all updates and server issues are taken care of by the software provider. Thus, your business is spared from expenses for in-house experts, extra staff and additional factors such as equipment and training. Additionally, the payment for your system will always be a fixed monthly amount, so you’ll know exactly how much of your finances are being allocated to inventory management software.
It’s one thing to have your stock automatically update across all of your channels, but what about when you need to order more stock? Most (good) inventory systems come with a preset reorder value that automatically sends off a purchase order to your supplier.
Furthermore, a good inventory management solution will also have a built-in reporting element to save you time when identifying your viral products. In business, stock is the greatest asset, so forecasting and planning for your popular items is vital to increase sales over multiple channels.
When you become a multichannel retailer, you face increased pressure to send out the correct product at the appropriate time and to the exact location, while ensuring said product is of good quality. This is especially true for marketplaces like eBay and Amazon, where promptness and quality are vital. As these orders are processed, the risk for human error grows because the orders must be assigned to specific warehouses and handled by several members of different teams.
An inventory management system allows retailers to streamline their warehouse operations. Because the software collects information in one centralized place, administrators can easily manage the stock in multiple locations as well as any dropshipping or fulfillment partners. This streamlines management of the entire stock process and helps improve delivery times, in effect increasing customer satisfaction.
I recently visited a customer who sells on multiple platforms and asked her the question, “So do you work Monday to Friday, 9 to 5?” I wouldn’t be surprised if she were still laughing now, since running an online business can feel like a 24/7 project.
If you’re out of the office during the weekend, you may have an epiphany about the stock situation of a certain product but then forget about this idea before you get back to the office. The benefit of inventory management software is that you can manage your stock even while on the go. Many platforms offer mobile responsive designs or an inventory management app, which can also be helpful for tradeshows or events where you can make a sale and have all of your channels update automatically.
In conclusion, as more and more marketplaces become available (such as Notonthehighstreet and Wanelo, which exist alongside already popular options like eBay and Amazon), managing inventory is trickier than ever. Therefore an inventory management system is the only option to not only effectively manage your stock but also allow you to spend more time on the things that matter to your business.
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[Photo courtesy of Flickr user Biblioteca de Arte.]