eCommerce Inventory Management
Guide to Multichannel Inventory Management
Whether you're running a chain of physical store locations or selling all your products through your website, you've probably recognized the value of marketing in different ways. Having just one place where consumers can interact with your business isn't a very effective way to generate sales. Just like you diversify your ads and ad channels, it's also a great idea to set up multiple places where people can purchase your products.
If you're working to make this change happen for your business, you probably realize how intensive the process can be. That's where the value of multichannel inventory management software comes in. By having a program to help you, you can ensure your multichannel inventory is handled easily and efficiently.
What Is Multichannel Inventory Management?
Multichannel inventory management involves overseeing how your product inventory is distributed across the multiple outlets where your products are sold. You may have several places where customers can buy from you, but you have a limited number of products in stock at any given time.
It can be challenging to keep stock up to date at all the different places your products are sold, particularly online. Your stock may be depleted by purchases on one site, while the "in stock" label on another site hasn't changed — leading to people ordering products that you don't have available.
This problem has led to the creation of multichannel inventory management software. The core function of the software is to bring the places your products are sold, along with all the information on your inventory, into one location. This means that rather than jumping back and forth between different sites to gather all your sales data and keep your inventory numbers updated, you can simply open the management software and have access to all of it right there.
Finale Inventory integrates with more than 40 POS and e-commerce sales channels. It updates in real-time and is accessible from any computer. With it, you can view sales and inventory from a single location — and get an up-to-the-minute look at the state of your business.
With centralized inventory, Finale will mitigate overselling Finale Inventory automatically updates stock levels in Amazon and other marketplaces. You'll save the time and hassle of manually updating your online stores, you'll have fewer issues with your e-commerce partners and your customers will be able to shop with confidence knowing their purchase is in stock and ready to go.
How Do Integrations Work?
A key element of inventory management software is its capability to host integrations. Integrations are the means by which the software connects to different channels. Before discussing those connections, it can be helpful to understand channels and integrations and how they work.
What Are Channels and Integrations?
Channels are the different online platforms where consumers interact with your business — hence the term "multichannel inventory." Common examples include websites like Amazon and eBay, but these are far from the only ones. A company's own site is also considered a channel. Channels are divisible by two main types:
- Sales channels: Sales channels are channels where your products are actually sold. Direct sales channels, like your company website or even a physical store, connect you with customers directly. Indirect sales channels work through a third party, like Etsy or eBay.
- Marketing channels: Marketing channels are channels where your products are advertised, but not sold. These channels are generally intended to point customers to sales channels. Examples include Pinterest and Facebook ads.
In other words, your channels are the elements you're organizing with the inventory software. If the software as a whole is the "what," integrations are the "how" that propels the process.
How Can You Use Integrations?
The factor that makes integrations for inventory management so beneficial is that they work two ways. When people make purchases on a site that's integrated into your multichannel inventory system, the software will receive the information about the purchase — even as it's doing the same for purchases on other sites. All that information is compiled into one place where you can easily see it.
When a purchase is made, the software will update your inventory on each of the other sites to accurately reflect how much of each product you have in stock. These updates save an incredible amount of time and effort on your end. The alternative is to keep up with each channel manually, updating the channel with inventory information and simultaneously updating your inventory information based on purchases made on the channel.
Finale Inventory offers over 40 different software integrations, from marketplace platforms to shopping cart software. You can even enter and sync data from sales made over the phone or by fax.
When stock levels are changed, Finale can be configured to auto-update stock levels to prevent overselling on your online channel. In addition to lost sales, oversold products create unhappy customers, negative feedback, and lower rankings. Worse, online marketplaces like Amazon will not allow you to sell on their channel if overselling becomes a problematic issue.
Say goodbye to manual updating with the e-commerce inventory management solution! If a sale is made on one website, Finale will automatically update inventory levels across all of your sales channels. We track product levels 24/7, and sync across marketplaces every 5 minutes while processing tens of thousands of orders per month! Finale will auto-update Amazon, Magento, and many other marketplaces and shopping carts. A complete list of the integrations can be found here.
What About Point Solutions?
Standard channels aren't the only things that can be integrated. Many types of inventory management software also offer the ability to integrate point solutions. Point solutions are smaller, more specific versions of inventory software. Standard inventory software performs a wide variety of functions, but point solutions focus on particular tasks. For example, one type of point solution could be dedicated to updating in- and out-of-stock labels on different sites.
Though point solutions are more limited in scope than broader software, their focus allows them to be more detail-oriented in their approach. For this reason, many businesses opt to use point solutions for particular tasks. Point solutions aren't designed to replace inventory management software. Instead, they work alongside them.
Most inventory management software will integrate point solutions just like it integrates other channels. If you have a point solution for a particular job, your leading software will let it do the detail work on that task. The software will import that information from the point solution afterward, so you can still have everything in one place.
Finale Inventory allows for integrations with several different types of point solutions. You can sync with channel management software such as Zentail or with accounting software like QuickBooks. Each of these point solutions will continue to do the jobs you already use them for, but they will transmit their information to your Finale Inventory software to have it in the same place as everything else.
Why Do You Need Inventory Management Software?
Once you're operating through multiple channels, the days of being able to track your inventory solely through spreadsheets are over. Dealing with more than one channel is complicated, especially when it comes to e-commerce. What seems simple to customers — navigating to an eBay page, seeing "in stock," hitting purchase and seeing their product delivered within the next week — is much more complex behind the scenes.
Each of those steps has to be facilitated by an organized inventory. Your company has to maintain that eBay page, keep the stock numbers updated accurately to avoid overselling, refresh them again after the purchase is made and get that product shipped to the customer by the specified date. That's enough to deal with through just one channel, but having multiple channels makes it exponentially more difficult. Each channel will have a different format and a different way of letting customers make a purchase, and your business has to keep up with all of them.
If you fail to maintain your presence adequately on different channels, the consequences can be costly. To start, you may lose customers if your stock is too low to facilitate all their orders. More direct financial costs exist as well. Retailers across the globe lose over a trillion dollars per year from overselling, overstocking and unneeded returning of products. To avoid these expenses, you must have an efficient way of managing all your channels and the inventory associated with each of them.
How Should You Implement Inventory Management?
Once you have your inventory management software, it can be tempting to think it will automatically offer a hands-off inventory solution. Of course, that isn't the case. Inventory management software is an incredible tool, but you need to know how to use it effectively for optimal results. Here are some of the best practices for multichannel inventory software to use its capabilities to make your sales and marketing a success.
1. Consider What You Need
The first step in the process is getting the software, and you shouldn't treat it as a quick or throwaway decision.
Different inventory management software is designed to fulfill different functions, making certain software types more optimal for some businesses than others.
To determine your choice of software, you need to assess what your company's needs are. Use the following questions to inform your decision:
- What do you sell?
- Who do you sell to?
- What channels do you sell through?
- How large is your business?
Asking these questions can help you learn what features your company needs to have in its software. Fortunately, Finale offers a broad range of features and integrations to choose from to help customize your software experience. We even offer custom integration solutions using our open API.
2. Centralize Your Process Around the Software
One of the biggest mistakes you can make after getting your software is to push it aside and treat it like a peripheral addition to your inventory management process. Multichannel software is meant to be the centerpiece of your whole inventory system. It's specifically built to bring everything together into one central location.
If you try to preserve your original system's structure and use the software as an extra tool on the side, it probably won't work out well and you'll be putting the software to waste. Take advantage of the way the software was designed by structuring your system around it. That structure will allow you to get the best results from both the software and your business as a whole.
3. Keep Your Channels Manageable
Once you've discovered the benefits of multichannel inventory management, it can become easy to get swept up by your expansion efforts. While inventory management software does make it easier to run your business through many different channels, don't get carried away and take on more than you can handle. If you overextend yourself, it can lead to a worse experience for customers, and customer trust is incredibly important.
Software may make the job easier, but multiple channels still require additional resources and supervision. Taking on too many can become too much for you to handle. The idea of the software is to make the job simple, so your resources can go into ensuring quality products and customer service.
4. Pair Outside Resources
You can use other resources alongside your software to make inventory management easier as well. Chief among these are barcode scanners. Especially if you have a large inventory spread across many different locations, barcode scanning can do a lot to help you keep track of everything. Finale Inventory enables full integration with barcode scanners designed to save you valuable time and resources. Working with these scanners, Finale can generate barcode labels for your inventory or pair with the barcodes you already have.
5. Standardize When Possible
Much of what multichannel inventory management software does involves keeping different channels in sync with one another. You can also do things to make it easier for the software to accomplish this task. The more your channels differ from one another, the harder it will be to integrate them with each other. Especially prior to obtaining inventory management software, many businesses have radically different approaches to how they sell on various channels.
To some extent, this setup is inevitable. Different channels operate in different ways. You won't be able to do everything exactly the same way on Amazon as you do on your own website. But that doesn't mean you can't work to make them as similar as possible. The more your services on different channels resemble one another — from the process of purchasing a product to the way stock numbers are shown — the easier it will be for your software to bring everything together, and for you to understand it.
6. Take Advantage of Features
Though it may seem obvious, the best thing you can do once you have your software is to take advantage of the many features it offers. The exact features you use will differ based on your setup, but automation is a significant one you'll want to use. As previously noted, this feature can take the form of anything from tracking warehouse stock to automatically updating "in stock" tags on channels.
Try to let your software handle any tasks it will let you automate. You should still have an accountability system for the software where you verify that it's doing what it's supposed to and providing accurate numbers, but there's no reason to burden yourself or other people with tasks that the software could easily do for you.
7. Analyze Inventory Management Data
Many types of software come with built-in capabilities for analyzing the various numbers they process. After a while of stocking and selling through different channels, your software can acquire enough data to show you different trends, like which channels are most profitable and which ones require you to restock the most.
Finale's analytics dashboard provides this feature, producing customizable reports for your business to help you get the insight you need. Examining past patterns is the best tool you have for predicting how to prepare for the future, which you don't want to miss out on. There can be a dizzying amount of data available, so focus on the important things — inventory turnover, gross margin percent and so on. These numbers will help you learn where to focus your resources without wasting time or finances on the wrong channels or products.
8. Use Data to Adjust and Prioritize
The numbers your software gives you will help you learn where to focus your resources without wasting time or finances on the wrong channels or products.
If you see a particular channel is costing you more to maintain than it's making from sales, consider cutting that channel from your lineup or looking into why it's doing poorly and working to correct the problem. If you notice another channel is prone to random bursts of activity, make sure you keep an "emergency stock" prepared for that channel. The more you respond to the data, the more optimized your business will become in handling the channels it uses.
How Finale Inventory Can Help With Multichannel Inventory Management
Knowing all this information, you're probably ready to get some software and start integrating your channels. If so, look no further than Finale Inventory. We offer top-notch multichannel inventory management for small businesses and large businesses, which comes equipped with key features and benefits.
The following are some of the best features Finale Inventory offers, but certainly not all of them. In addition to our in-depth management capabilities, we offer world-class customer service, partnering with your business to get you the inventory management software you're looking for.
One of the standout features of our software is that it is a cloud-based system. All your information is stored online rather than being limited to the software installed on one particular device. This feature eliminates dependence on specialized company servers that can only be accessed through specific computers. It also enables you to check your inventory numbers from anywhere without the risk of losing your information due to something like a server crash.
Our cloud-based system allows for scalability. This means you can expand your storage space with ease as your business grows, rather than spending time and money trying to acquire more hard drive space or upgrading your devices. It also eliminates issues prone to crop up on hard-drive-based systems, like duplicate files.
Another feature Finale Inventory offers is multi-warehouse inventory management. Tracking the numbers associated with one inventory across multiple channels is difficult enough without software. But what about when you have multiple channels and multiple physical locations where your inventory is stored? And what if you move that inventory between warehouses frequently?
Using Finale Inventory software, you can keep track of how much product is in stock at different warehouses and coordinate movements between those warehouses with ease. This task is where it can be especially helpful to integrate barcode scanners, sending information about every product you scan straight to your software.
You may think you know how much you're spending on your various materials, but the truth is that there's more to your expenses than what your supplier charges upfront. You'll have to pay additional costs associated with things like freight, insurance, customs and tax. Finale Inventory enables you to take all these costs into account more easily and calculate the true expense of the items you purchase, so you can make sure you're staying on budget.
Kitting and Bundling
Sometimes you may want to sell multiple products together as a group, perhaps as part of a special deal or simply because two items go together well. Finale's kitting and bundling feature allows you to handle this procedure with ease. The software will process each purchase as a unit, but update the inventory numbers for each of the individual products.
Powerful Reordering Capability
Running a growing business is hard. There’s a lot you have to keep up with. Leveraging the sales velocity of a product, Finale will automatically calculate dynamic reorder points based on your inputs – supplier lead time, desired safety stock, and expected sales growth — to make smarter, faster-purchasing decisions.
Restock forecasting from Finale gives you one less thing to worry about. When your inventory gets low, we’ll send you an alert letting you know it’s time to send out a purchase order. You can email the purchase order directly from Finale, and when you receive your shipment with Finale, Finale will update all your channels with the will be updated stock quantities.
If you have an in-house development team, Finale has robust APIs to further to increase the capabilities of the e-commerce inventory management system to your exact needs. The API is an efficient method to get automate the data going directly to and from Finale like creating products, creating purchase orders, and updating stock quantities. A popular application of our APIs is leveraging it to create an integrated EDI (electronic data interchange) solutions to streamline purchase orders with primary suppliers. For companies who leverage drop shippers in their supply chain, use the API to import supplier inventory stock levels at fixed intervals to always have a real-time of their inventory stock levels to enhance the e-commerce inventory management solution. Technical API documentation can be found here.
Start With Finale Inventory Today
If you're ready to put inventory software into action for your business, let Finale Inventory help you get started. We recognize that different businesses have different needs, so we'll work with you to determine the multichannel inventory solution that best fits your company. We've already helped many businesses optimize their process, and we're equipped and able to do the same for you.
If you want to get a feel for how our software works, we'll set you up with a real-time demo so you can see it in action. We also provide a free 14-day trial. To begin transforming your inventory management process, get in touch with us today!
Download the pdf file to get more information on our e-commerce management solution for multi-channel sellers.
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Finale can tackle the challenges facing eCommerce Businesses with an ease that I cannot believe.
”Finale can tackle the challenges facing eCommerce Businesses with an ease that I cannot believe. Many eCommerce businesses face challenges from many different aspects of the sales/inventory flow; here at Bapmic Auto Parts Inc., we were no exception. As a large company with channels in eBay, Amazon, Walmart, and local sales, we desperately needed a robust and coherent warehouse/sales management system. Honestly, we have seen a 100% or more efficiency increase in daily operations since taking on Finale. Every aspect of our eCommerce business was improved by the implementation of the software.”
Bapmic Auto Part
October 17, 2018
Simple solution to a common problem managing a single inventory through multi platform online sales channels
”"The software provides a simple solution to a common problem managing a single inventory through multi platform online sales channels - eBay, Amazon, and webstore - using Finale. It's easy to use for staff, smooth integration to Shipstation, easy integration with online platforms with more APIs in the works, and great tech support. Handheld scanner enables staff to add and remove inventory with ease."”
Recompute, Goodwill Industries of San Francisco, San Mateo, and Marin counties
Jan 13, 2016
Simple and Powerful
”It's everything you need an inventory software to do simply and easily without bloat or unnecessary features. Finale integrates seamlessly with all our sales channels and works perfectly all the time. We have multiple warehouses. Before Finale, I used to have to manually update this inventory from multiple spreadsheets...it took about 4 hours every week. Now the same exact task takes me about 4 minutes and I do it daily. We are have increased accuracy with less work. The single best feature about Finale is the product lookups that allow you to match multiple sku variations to one primary sku”
Creative Metaphor Design
July 7, 2018