What is Multichannel Inventory Control?
The term "inventory control", despite sounding similar to inventory management, actually refers to a number of different challenges in logistics and retail sales - things like overspending on inventory purchasing and storage, discrepancies in stock counts, and conflicting inventory data between different sales channels.
Inventory control is not just about management, but about purchasing and inventory optimization. Knowing how much of an item you have in stock is just part of the battle. A well optimized warehouse will also know when to reorder stock, and how much to order at any given time.
Multichannel businesses in particular will benefit from smart inventory control. Learn more about the benefits of inventory control for your ecommerce business:
Reduce inventory overhead costs
There is more to your inventory costs than the amount you paid when purchasing products. You may have financing charges from making your purchases on credit. You need to cover the costs of leasing, insuring, powering, and staffing the storage space that your inventory is sitting in. The products you carry — some more than others — all have a risk of depreciation in value due to expiration or being replaced by updated versions.
You can reduce your inventory overhead by reducing the amount of inventory you keep at once. Don't sit on stale stock! Inventory control software can help you forecast your inventory needs based on recent sales trends, historical trends, and upcoming seasonal changes. Then, you can use your measured inventory turnover rate to adjust how much of each product you need to order from your suppliers.
Prevent inventory shrinkage and loss
Inventory loss has been a problem for as long as retail has existed. The average warehouse loses about 2% of stock every year to shrinkage. This loss could be from damage, employee theft, or simply errors in counting or receiving. 2% may not sound like much, but you definitely could do without that amount of your inventory disappearing for no good reason.
Fortunately, there are simple inventory control solutions that can help reduce inventory shrinkage:
- Many inventory count errors stem from warehouse operators receiving purchase orders based on what's on the included packing slip. Unfortunately, it's very common for distributors and wholesalers to mispack these shipments. Counting every unit included in incoming shipments will allow you to catch errors in the shipment's contents.
- A huge source of inventory loss is caused by shipping the wrong items with a sales order. You can save thousands of dollars per year by reducing picking and shipping errors, and reduce the time spent on order returns and refunds. The most efficient way to reduce your order errors is to implement barcode scanning in your picking process.
- Finally, counting stock more frequently will reduce the chances of discrepancies in reported counts. Performing smaller counts more often, such as with cycle counting, can keep any stock inaccuracies to a minimum while giving you more time to diagnose the discrepancies that do pop up.
Synchronize inventory across channels
Today's ecommerce environment is more than just a single website selling goods. You may sell the same products on one store as you do many other marketplaces, auction sites, or other listing sources. However, these different channels are not different businesses of yours — they use the same inventory at the same location with the same means of shipping and receiving stock.
You can bring these sales channel efforts together by synchronizing inventory across your multichannel listings. This will ensure that all of your channels will have the most up-to-date inventory counts for products that they share. You can even prevent overselling by reserving stock for open orders, syncing only the free inventory left over.
There are huge benefits to connecting your sales channels together through a multichannel inventory control solution. You'll spend less time maintaining those channels separately, making lower volume channels more feasible and profitable to sell on. You can connect your brick and mortar sales as well to complete your inventory picture. As local sales are processed, inventory is deducted automatically, and those changes are synchronized across your sales channels in realtime.