The most successful businesses meet customers where they are, which can often mean accepting orders across multiple sales channels.
While expanding your product’s availability is a clear route to increased sales, it also adds complexity to overall operations. Companies have to aggregate all incoming sales orders, coordinate with warehousing and fulfillment, and ensure total inventory levels are up-to-date.
Multichannel inventory management helps companies track products that are stored in different locations, as well as fulfill orders that are placed through multiple sales channels, including ecommerce platforms, marketplaces, and retail stores.
Whether your company is expanding to new markets or diversifying inventory storage space, it’s increasingly common these days to manage inventory across many channels.
This article discusses the benefits and challenges of a multichannel inventory management process, and how a centralized business management platform can optimize it.
What is multichannel inventory management?
Multichannel inventory management (also called multi-source inventory management) is the process of ordering and tracking products across different warehouse locations and fulfilling orders placed across multiple sales channels. This typically includes ecommerce businesses, online marketplaces, wholesalers, distribution channels, and retail stores.
Any company that sells physical products needs proper inventory control. Holding too much or too little stock, and not being able to adapt to market changes, can leave a company with unnecessary costs and insufficient revenue.
While traditional inventory management already oversees many components, multichannel inventory management compounds the effort with its increased number of warehouse locations and sales channels.
Ultimately, multichannel inventory management aims to achieve the most cost-effective amount of inventory on hand to satisfy customer demand.
Challenges of multichannel inventory management
With numerous storage locations and sales channels, managing multichannel inventory naturally comes with additional considerations. These are some of the most common challenges when managing multiple sales channels.
Overselling or product stockouts
When selling through multiple channels, gauging the optimal inventory stock levels can be difficult. It’s common for the increase in market demand to outweigh the number of products available in stock, which leads to missed sales. Companies may be required to pay higher costs for rushed orders or expedited shipping. Over time, stockouts can cause disappointed customers to shop at competitors.
Overstock or deadstock inventory
Conversely, a company can overestimate market demand and order more inventory than it’s able to sell. Overstock creates extra expenses, namely carrying costs and stocking fees, and if the products remain unsold, the company will lose revenue. This problem is exacerbated when selling on multiple channels, as distributed inventory is more challenging to consolidate and can add up to even more deadstock.
Inefficient warehouse management
When moving to multichannel inventory management, companies typically allocate products across multiple distribution and fulfillment centers. Without necessary visibility and tracking, however, distributed inventory can cause longer shipment times, higher logistics costs, and increased order errors.
Inconsistent inventory information
Maintaining consistent product information can be challenging when dealing with multiple warehouses and sales channels. Companies must synchronize inventory levels, product information, prices, and shipping labels to maintain accurate records and avoid mistakes in customer orders. This is particularly important when handling returns or exchanges to ensure timely refunds.
Inaccurate sales forecasting
Every channel has its own unique sales patterns, with factors like seasonality and customer preferences at play. Predicting market demand and determining the optimal levels for each channel is important. Rather than looking at general inventory turnover and sales, it’s important to analyze data per sales channel, warehouse tracking, and type of product.
Negative customer experience
Regardless of where a purchase is made, customers expect the same quality and level of service. This is relatively simple when selling through a single store. However, every additional channel introduces complexity to customer service. Inconsistencies between inventory and sales channels can lead to subpar service, delayed order fulfillment, and a negative customer experience.
Benefits of multichannel inventory management
When expanding your sales reach, multichannel inventory management can help to streamline workflows and organize the entire supply chain. Here are some of the key benefits of implementing multichannel inventory management:
Expanded market reach
Effectively engaging new markets and reaching a broader customer base are primary benefits of multichannel inventory management. By selling across multiple channels, such as online marketplaces, social media platforms, and wholesale platforms, companies increase their potential to capture customers who prefer specific channels and have yet to be reached via other channels.
Diversified sales and revenue streams
Selling through different channels reduces the company’s reliance on a single platform by bringing in sales from various market segments. Thanks to multichannel inventory management, companies can diversify their revenue streams and build more sustainable and profitable operations in the long run.
Optimized inventory allocation
Multichannel inventory management enables businesses to strategically allocate inventory across sales channels, in accordance with local demand and market preferences. By optimizing for overall inventory distribution, companies can reduce unnecessary costs tied to excess inventory while preventing potential stockouts and lost sales.
Insights drive by real-time sales data
Selling through multiple channels, as opposed to a single point of sales, offers increased inventory data and metrics. Multichannel inventory management systems provide a comprehensive view of real-time inventory levels and analytics, facilitating data-driven decisions and quick responses to fluctuating demand. By analyzing sales patterns and channel performance, companies can continue refining their strategies and identifying growth opportunities.
Builds a better customer experience
Multiple sales channels gives customers the convenience they’ve come to expect in their shopping experience. Whether through a traditional retail store or online store (i.e., Amazon FBA, eBay, Etsy, Shopify), running a multichannel business allows customers to purchase on their preferred channel. Customers can shop at their own convenience, which increases potential sales, repeat purchases, and brand loyalty. Furthermore, by synchronizing the experience across every sales channel, companies can promote a more holistic and engaging experience that meets customer expectations at every touchpoint.
Final thoughts
To see success in today’s market, it’s important for companies to store their inventory in optimal locations and sell through omnichannel operations. Multichannel inventory management helps deal with the additional complexity by coordinating various sales channels, ensuring data accuracy, and maintaining efficient fulfillment processes as your company grows.
Multichannel inventory management software provides intuitive automations and integrations to streamline the process further. By leveraging the right software and strategies, companies can reap significant benefits from multichannel inventory management and remain competitive in the evolving market.
This article originally appeared on the QuickBooks Resource Center and was syndicated by MediaFeed.org.
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23 small business & side hustle ideas for 2023
When you’re thinking of starting a new business, there are plenty of possibilities to consider. But what if you don’t have a large startup budget ready to go? Doesn’t that limit your dreams severely?Whether you’re trying to launch a side hustle to supplement your day job or you just want to be your own boss, there are many businesses you can start that don’t require huge sums of money.
Explore this list of 23 of our best small business ideas. The sooner you get started, the sooner your small business might be the next great success story.
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At-home workouts became popular during the pandemic restrictions, and it’s still a favorite go-to for busy people who need exercise. If you’re a fitness lover, you may be able to launch an online training business in one of a number of different ways. An easy way to get started and build an audience is by making videos to post on YouTube or sell as a course. According to a survey by Personal Trainer Development Center, online-only trainers made $54,000 yearly on average prior to the pandemic.
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Developing websites — building and maintaining their core structure — is a technical skill that’s in high demand. Yet, it’s also a skill that you can teach yourself through videos, website lessons, and books. Once you’ve mastered and practiced the skill, you can build a portfolio and start pitching clients. All of that takes time and effort but not really money.
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Web design is a skill set you can market as a freelancer, providing your services to multiple companies that need help with the usability and aesthetics of their sites. You can focus on helping design websites from scratch or on troubleshooting and/or redesigning existing websites, or even on a combination of both. Pay for web design may run at around $60 per hour and a full website design might pay between $5,000 and $10,000.
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If you’re wondering what kind of business to start, you might think about consulting in an area you’ve already worked in, like human resources, management, IT, or operations. You can set your own hours, potentially charge more than you earned as a full-time employee, and pick and choose the projects you’ll enjoy the most.
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Starting your own graphic design business is another easy option for people who have the talent and experience. If that’s you, you can launch a website with some portfolio pieces and start pitching potential clients. If you’ve already been a graphic designer for a company, you likely already have everything you need to get started. As of May 15, 2021, the average hourly pay for a graphic designer in the U.S. was $17.99.
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Life coaching can be an extremely satisfying business. You can pick a niche you’re passionate about, like career changes, productivity, health and fitness, or some other idea you find compelling. Getting certified as a professional coach may increase your clout and marketability. While that training probably won’t be free, you might consider it an investment and take out a loan to cover your tuition.
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Whether you’ve been a hobby sewer throughout your life or just picked up the new skill during the pandemic, you may be able to turn that interest into a business. You can specialize your services in any number of ways, like making alterations, designing custom home decor like curtains and pillows, or creating hand-sewn crafts to sell.
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Résumé writing is in demand, thanks to how many people are job hunting. If this is something you have a knack for, you can either find clients on your own or freelance for a résumé agency. The average yearly income for a full-time résumé writer is $42,745, but pay varies. Bear in mind you may be able to earn more if you have expertise in a specific industry. (Learn more atWhat is a Swaption?)
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Selling used books online can be fun as well as lucrative for bibliophiles. It does involve some startup costs since you’ll need to stock up on inventory, but sourcing inexpensive books from places like thrift stores or yard sales can be fun, too. Once you make your first few sales on a site like Amazon or eBay, you can reinvest some or all of the profits to keep your inventory growing.
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If you’re fluent in multiple languages, you can utilize those skills as an interpreter or translator. This is work that can often be performed from the comfort of your own home. Global businesses may not have a full-time need for translation services, so you may be able to step in and help them as a contractor. According to the U.S. Bureau of Labor Statistics, the most recently gathered median annual earning for an interpreter/translator was $52,330.
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Pet owners spare few expenses when it comes to pet care. And since many people adopted new pets during the pandemic, a pet walking or pet care business could provide a big market in many locations. Once you land your first few clients, you can then focus on getting referrals from those successes. Nationally, dog walkers make an average of $29,000 from dog walking, though it’s important to remember that it varies by region and that not all dog walkers view it as a full-time job.
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Creating an online course is a fun way to share your knowledge about topics or skills you’re passionate about. There are many course platforms to choose from. All you need to do is create one or more videos and upload them to the teaching platform. Set a price and, ideally, you’ll soon make some sales.
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Designing and selling digital products (like videos or ebooks) is an easy business to set up, plus it becomes increasingly passive as you build up your library of products. From artwork to educational products, you simply upload your creations to your preferred platform so future customers can find your work.
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Gardens and landscaping became even more popular during the Covid lockdown. They remain favorite pursuits. If you’ve discovered that you have a green thumb, consider launching a landscaping or garden-care business to help your clients maintain beautiful yards all year long. Explore startup funding options to help finance new equipment if you need it.
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Cleaning houses is a service that’s in demand in just about every city and town across the country. Decide what particular types of services you’ll offer and collect the necessary supplies. Also consider getting a general liability insurance policy to protect yourself and your new business since you’ll be in other peoples’ homes. House cleaning can pay from about $13.75 an hour to $19.75 an hour, but that may vary based on your location and what services exactly you’re providing, among other factors. (Learn more atOptions for a $50,000 Personal Loan)
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If you have an artistic knack, consider opening an online shop to sell your own handcrafted goods. You can launch your own website or list your items for sale on an existing platform. You can either build up a stock of inventory first or opt for a made-to-order business model, which can help you save on startup costs.
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Starting a dropshipping business can be ideal for people who enjoy online marketing. As a dropshipper, you curate goods from a wholesale supplier and market them for sale online. However, you don’t hold any inventory. Instead, the supplier handles shipping for you.
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It’s easier than ever to launch your own interior design business, especially if you have some relevant design experience (your kitchen makeover!) to include in an online portfolio. There are a number of different services you might offer, like home staging, product curation, or online design plans. Consider picking a particular niche or style when you first get started so you can attract your ideal client.
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You can start a tutoring business in person, but online tutors are also popular. Pick a subject you’re knowledgeable about, like math, language arts, or English as a second language. There are plenty of online platforms through which you can market your services, or you can network to find students in need of a tutor. Online tutors can make around $30 an hour or, if they teach advanced subjects, as much as $60 an hour.
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Starting your own virtual assistant business gives you a lot of flexibility in the type of work you do and the hours and location from which you work. You can offer a range of remote services as a virtual assistant, including managing schedules, sending emails, or even handling marketing activities.
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Opening a home daycare center is a more involved small business idea, but there’s definitely a need for this service. Be sure to check your area’s local rules and regulations about opening an in-home daycare center. It may be helpful to write a business plan to keep track of everything you need to do. Alternatively, you could start small by just babysitting or nannying for one family, or even working as a parents’ helper.
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Video and audio content is increasingly popular, so you could offer voiceover services as your own business. It’s easier than ever before to do this as a remote job, plus you can get started with some inexpensive equipment, much of which you may already have, like a microphone, mic stand, headphones, and some recording and editing software. Prices for this service vary, but you might expect to make around $100 for a local radio commercial, up to $10,000 for a national television commercial, and anywhere from $200 to $300 an hour for an audiobook.
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Flipping — finding and reselling or even fixing up and reselling — used items for a profit can be a great business idea if you love bargain-hunting at thrift stores, yard sales, or even clearance shelves. To get started with no budget, you can even flip your own unwanted items from your home on an online auction site, for instance. As you make a little money, you might want to start expanding your inventory.
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Starting any new business takes some work, but the rewards are often worth it. As you get more involved in a new business — and even as it gets more profitable — you may find you need to put more resources into it. You can launch your next idea by exploring financing options.
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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