Understanding multi-channel inventory management
Maintaining control of your inventory in business can be very complicated at times especially as your business grows. You must make sure that you have more inventory for items that are in more demand and less inventory for items that sell slowly. It’s imperative also to ensure you are spending unnecessary inventory costs. Having said this, if you don’t have a multi-channel inventory management system for your eCommerce business, your whole inventory could be a total wreck. Therefore, it is crucial to have a top-notch system in multi-channel inventory management.
What is Multi-Channel Inventory Management
This type of management is the process in which companies track orders and account for these orders. The information of these orders come from different sales sources on inventory stored in several locations, including e-commerce, marketplaces, wholesale, retail, etc.
Why Multi Channel
There are many reasons why businesses should have multi-channel inventory management. One reason is due to the fact that many departments in business have inventory ranging from equipment to items for sale. Secondly, consumers possess tremendously high expectations propelled by big brands. Thus, when having all the inventory carefully implemented, customers will be able to buy as they want from different channels. It will behoove businesses to ensure in-store fulfillment to eliminate the possibility of having unpleasant surprises throughout the marketplaces and channels.
There are even more reasons why multichannel inventory is needed. Without a top-notch system, it is challenging as shown with the reasons mentioned above. Another main reason for this is because many businesses use the latest technology to automate and facilitate all the processes with the exception of distribution. Secondly, inventory management as an e-tailer is becoming more challenging due to customers evolving into multichannel shoppers. With these issues, you must have an integrated inventory system that allows you to have stringent monitoring of the merchandise flow in and out of the stores. This way, you will be able to oversee a myriad of multichannel shopping instances.
With a superior multi-channel inventory system, your whole company will be aligned because you will have visible access to all the products. Operations managers can make appropriate changes to improve efficiency and can see inventory KPIs. Also, purchasing managers can see how often they should reorder products. Warehouse managers can locate their products, assign tasks easily, and so forth.
Important Components about Multi-Channel Inventory Management
Now, that you know the what and why of this type of management, it’s time to learn about important aspects of this system and how it works:
The most common distribution options include 3PLs, retail stores, and warehouses. However, customers may not be able to get the items quickly if these options are not tied in together. However, if you have a top-notch eCommerce business, you will have access to turnkey solutions. With a Mageworx store, you will have tons of extensions and e-commerce solutions that will help you increase online store revenue and sales.
With the Mageworx company, your online store will have access to multichannel software and specialized systems for warehousing or order management.
First In, First Out
With a Mageworx store, you can have ultimate order management where you can ensure first in first out (FIFO). This is especially important for perishable products, like food or drinks. You will ship items ordered to the customers with the items that came into your store first, then second, and so on. This system eliminates waste in costs and products that are associated with expired items. Additionally, with this e-commerce inventory system, you can see how to add inventory to the back as new inventory comes in. Even if you have to make last minute changes, it is possible to do this many times with this system.
With the Mageworx company, you can also easily access regular audits and sales forecasting. You will be able to conduct inventory audits regularly to ensure stock levels, inventory operations overall, and a baseline for productivity.
Sales forecasting is closely accurate predictions of inventory management by comparing stock sold in different periods. You can predict by comparing items sold last week, last month, last year, and more. From there, you will use different formulas to get a solid figure.
Inventory Turnover Rate
This metric shows how fast your inventory sell. A high inventory turnover rate is favorable, meaning you have a strong level of sales. It also means your entire inventory is moving relatively quickly. Furthermore, having a huge amount of assets as a form of inventory, instead of cash, transmits through inventory quickly. As a result, strong cash flows are provided that can be used to build or reinvest in other ways for the business.
Due to all of this, it is established that multi-channel inventory management is crucial for businesses. It is no longer just a good option or just important. It is definitely mandatory for retail business success or else. With this in mind, you should get nothing but the best. Mageworx is the way to go handle these sorts of issues.