Multichannel E-Commerce: How an Inventory Management System Helps on Black Friday
Multichannel E-Commerce: How an Inventory Management System Helps on Black Friday
Black Friday – it’s the day that retailers all over the US finally get out of the red and into the black. It’s a massive shopping day, the largest of the year, and it’s marked not just by a glut of online and offline shoppers, but by massive demand for items large and small. When handled correctly, it can be a huge boon for your multichannel e-commerce company. When handled improperly, it can lead to lost profits, lost customers, and a failure to thrive.
The good news is that the right inventory management system can provide multichannel ecommerce companies with vital benefits and capabilities that let them do more than just “make it through” the holiday season. With the right system, your company can bolster sales and profits, engage and retain customers, and beat out competitors. How might that work, you ask?
The Black Friday Situation Today
While Black Friday hasn’t yet arrived for 2018, statistics from previous years can help to illustrate what to expect. For instance, The Balance reports that sales in 2017 hit a record $7.9 billion, which was an increase of 18% over 2016. This year’s sales are expected to be even higher. Another important trend of note is that fewer people are shopping in brick and mortar stores.
In 2016, 137 million people went out to shop during the four-day sales event. In 2017, that number fell by 4%. 2018 is expected to see a similar shift, as more people shop online to avoid crowds. This means that multichannel ecommerce companies have more to do to prepare for Black Friday than ever before. The right inventory management system can help.
We’ll begin with what should be a “given” for any inventory management system – the ability to list items for sale on the platforms that you use. Make sure that the system you choose works with the platforms you sell on, and that it provides you with the means to list everything you need per item, including multiple pictures, search optimized descriptions, UPC codes, prices and everything else. Item listing should be a seamless, simple process, and you should be able to automatically populate new items across all of your ecommerce platforms.
From an inventory perspective, make sure the system lets you track separate stock levels across multiple warehouses and distributors. While the marketplace only cares about your total stock availability, knowing where your stock is or what distributor the stock is at will help to accelerate the fulfillment process. Alternatively, ensure that the system can integrate with an external inventory or warehouse management system such as SKUVault.
Inventory Tracking and Syncing
You cannot be successful on Black Friday if you are unable to track your inventory accurately. What’s more, you need to be able to sync your inventory across all channels, as well as within your warehouse or with supplier or distributor numbers. This allows you to ensure that your items are automatically marked as out of stock as soon as the number on hand drops to zero, helping to eliminate problems with customer orders. In addition, changes to the inventory counts of one item on a particular channel should be reflected in the counts on all channels where that item is sold.
For instance, say you sell a muffler on Amazon, but you also offer it through three other channels. Your inventory management system should automatically deduct the sold item from inventory counts on all channels. Again, this ensures that your customers are able to get accurate inventory information and avoid the frustration of ordering something only to find out that it’s no longer in stock. Automatic inventory tracking and syncing also saves you time and hassle over doing it manually, allowing you to focus on serving your customers.
Minimizing Oversells While Increasing Buying Urgency
Setting a safety stock level (a.k.a. Minstock on the SureDone Multichannel E-Commerce platform) is recommended for fast selling items. Minimum Stock creates a “buffer” between your real stock count and what you list on the marketplace. It does this by subtracting a “Minimum Stock” amount from your total stock before updating marketplaces. For example, if you have 10 in stock, and a Minimum Stock of 2, a stock count of 10 will actually be sent to the channels. This helps to prevent oversells when it takes some time to update stock counts on multiple channels after marketplace orders.
Also, take the opportunity to create a sense of urgency for buyers by setting a “Maximum Stock” amount. Once again, looking at the SureDone platform, if you have a large amount of stock of an item the amount you’ve set “Maximum Stock” to will be sent instead of your actual stock. In many cases this will trigger a “Buy Quickly! Only a few left!” message on a marketplace. As an example, if you have 500 widgets in stock and set your maximum stock to 5, SureDone will send a stock value of 5 to all marketplaces. When you sell one, it will put the value back up to 5. If your actual stock drops below 5 we’ll start sending the actual stock value.
Leverage Inventory Automation
Black Friday can be a crazy time – responding to customer questions, processing orders, modifying listings, keeping inventory levels updated and more.
When choosing a multichannel ecommerce platform ensure it has automation capabilities similar to the SureDone Advanced Automation Engine. With automation, your multichannel system can connect to suppliers such as distributors and download their latest inventory counts. Just as your products should be flying off the shelves on Black Friday, distributors products will be too. Automating inventory updates and having them run on a frequent basis will reduce the chance for oversells.
Also ensure the system can track each distributor in a separate stock field and then aggregate all of the stock when sending inventory levels to marketplaces. By separating the stock fields, you don’t run the risk of your total stock becoming out of sync when an automation updates a single distributor’s stock level.
As a multichannel ecommerce company, you sell on many different channels. However, you likely only have a single warehouse where those orders are processed. Without the right system in place to consolidate orders from multiple channels into one location, it can become chaotic. This is particularly true during Black Friday when your orders will jump by orders of magnitude. This helps you save time and deliver better customer service and satisfaction.
And ensure that you’re not just consolidating orders from multiple channels, but also consolidating orders from a single channel. In other words, if a buyer places multiple orders on a marketplace such as eBay, you should be able to consolidate these orders into a single shipment to save money. This is especially needed in today’s day and age of free shipping.
And don’t forget about the opposite of order consolidation – order splitting. This is very useful when items are backordered and you want to ship the available product.
The most important part of the ordering process for your customers is order fulfillment. Black Friday presents unique challenges in terms of the sheer volume of orders. The right inventory management system will offer powerful order fulfillment tools, ensuring that all your systems communicate seamlessly, information flows accurately, and orders are fulfilled on time.
Also ensure the software’s automation system has the ability to send dropship orders to your distributors. This will radically reduce the time it takes to process orders by sending them directly to your distributor for shipment and also minimize the time between order placement and order fulfillment – decreasing the chance for an oversell if a distributor is low on product. The distributor should then be able to send back tracking information which can be automatically uploaded back to the marketplace.
As you can see, the right inventory management system is a critical consideration for multichannel ecommerce companies looking to prepare for Black Friday and the 2018 holiday shopping season.