This is a guest post from Jacqueline Wibowo of Tradegecko.

If you’re an eCommerce retailer, you probably fall into one of three categories.

1. You dabble. As in, you’re not expecting much to come out of it. You have some sales from friends and family, but no real traction yet.

2. You’re growing. You’re realizing that your side store has more potential than you thought. Maybe you move from selling on Instagram or a blog site to using a platform specifically for eCommerce like Shopify to set up a real store.

3. You’re it. You’re running an efficient business with multiple channels.The decisions facing you are high level – you have softwares that you love – handling all the details so you can focus on what’s important.

Inventory Management for multiple sales channels

The big question is, what happens to bring you from stage 2 to stage 3? This is where you face a major decision. It’s likely that you’re managing your inventory through Shopify, which worked perfectly when you wanted to only sell online.

But now, you think it might be lucrative to open up a physical store or other distribution channels. You want it to be a seamless transition, but if you were to try to do this with your existing system, it would look a little something like chaos.

For example, you’d have a different spreadsheet documenting the stock coming in and out of each sales channel (your online store, your consignment stores, etc.). You’d have to manually add up all your sales from each spreadsheet. To generate any reports on intelligence to inform your strategic moves as a business, you incur a significant delay because you have to wait for an employee to handle these logistics manually.

Unfortunately, many business hit a slump at this point. They get overwhelmed with these logistics, and as a result, lose focus on strategy and creativity. Others eventually choose to adopt an inventory management system that can handle multiple sales channels – one that can automate all the grunt work. The system itself is likely more complex, but it handles all this work behind the scenes, making it easy for you to expand to multiple sales channels.

So, what does a more complex inventory management system look like, and why is it important for a growing business?

Where the supply chain meets inventory management

A retailer’s supply chain covers the whole process of a product as it moves from the wholesaler to the retailer and other middle players to the consumer.

The supply chain in itself may not sound complex, but the management process involves ordering just the right amount to meet customer demand. Striking a balance can be quite the struggle. To maximize profits, retailers need to supply the right amount of the most popular items, but not overstock on items that they’ll be scrambling to get rid of with blowout sales at the end of a season. So how does an executive decide how much to order? Does he just go with his gut?

This is where multichannel inventory management comes in. When someone hits “confirm payment” on their online shopping cart, everyone is notified. Who’s everyone? The retailer, the warehouse, and of course, the supplier. When supply of an item gets too low, the supplier gets a heads up to start packing more units and ship them out. The updates to stock levels all happen in real-time, and this process happens within a matter of seconds.

How else does it facilitate your growth?

Each inventory management software, but most multi-channel ones can grow your sales through the following features:

  • Order Management: Rather than estimating how much stock you need to order and worrying that you might buy too much or too little, the software can automatically tell you when you need more of a product. As a retailer, you’ll avoid missing out on sales due to out-of-stock situations, but also avoid having surplus stock that’s doomed to gather dust in a corner.
  • Product Identification and Tracking: The software allows you to assign unique bar-codes with information about each item, so all you have to do is scan an item at the point of sale. Your stock levels and profits update automatically – it’s that easy. You can also track when you move things between different store locations or warehouses.
  • Automation: In other words, doing everything that would take you hours or days by hand in a matter of seconds. The software allows you to keep track of how your items are selling – useful if you’re planning a marketing campaign or deciding which items to put on sale. You can generate reports on-the-go – in real time so that there is no delay and you can always make informed strategy decisions.

Best features for eCommerce retailers

It’s no secret that eCommerce is a growing industry, and inventory management systems have your back on this. These features can be particularly helpful in managing your online site.

  • Warehouse integration – If you’re an online store trying to get a physical store, or vice versa, you can manage the inventory from both sales channels all in one place. The expansion doesn’t have to be painful.

Inventory Management for Online stores

  • Integrations with eCommerce Platforms – If you’re hosting your site from an eCommerce platform like Shopify or WooCommerce, good inventory management software will likely have integrations linked to them. These integrations assure that when someone makes a purchase online, all the items in their shopping cart are synced to all sales channels. Just like with a physical, in store purchase, the warehouse and the supplier will automatically know that they are down in stock. You don’t need a separate account or software to manage your site.
  • Real Time Updates – As a consumer, have you ever fallen in love with a cute pair of shoes and added it to your online cart, only to have it read “out of stock” when you click the checkout button? No one likes reading error or apology messages. A multi-channel system will keep this from happening again.
  • Tracking – With a physical store, you have some items back in the warehouse and some in the actual store. With an online store, you may have items that you haven’t published yet but that you plan to – very soon, strategically timed. You can keep track of what you’ve published and what you haven’t and manage your total inventory.

The benefits in play

Whether you’re a small business or a bigger one, additional expenses will likely have you furrowing your brow just a bit. You’ll want to consider what benefits are most in line with what your business needs at its current stage. Let’s look at two eCommerce retailers and how inventory management fit into their growth cycle.

1. Kiri Schumacher Jewelry: When Kiri’s New Zealand-based jewelry company looked to expand internationally, she was forced to focus more on operations with her new sales channels and had little time for creative work.

Key Problems

a, Selling on consignment: Kiri sells 90% of her jewelry on consignment to galleries. In this stage of her business, what occupied most of her time was trying to manage the different stock levels at each store on her own. Her priority was automating the stock updates and reports from these new locations.

b, Integrations: As her store started on on Shopify, Kiri wanted to be able to solve her inventory management problem without having to get rid of her existing setups. So, another priority was adopting a system that could integrate the information from Shopify as well as her accounting software – Xero.

Grow your eCommerce with Inventory management

2. Caps and Gowns: Based in Rotterdam, the company offers graduation ceremony essentials across Western Europe.

Key Features

a, Intuitive Interface: Anytime you bring in a new software to a company, you’ll likely need to train your workers to use it correctly, which takes some adjusting before it becomes a natural part of your operations. In their search, Caps and Gowns looked for a software that could be implemented with as little training and adjusting as possible

b, Real-time Stock Updates: Like Kiri, they found that manually compiling reports from their sales were sucking up a lot of time. They wanted to make informed strategic decisions whenever they wanted, from any location, so that they could focus on “selling, getting new customers, and meeting expectations of our recurrent customers.”

Weighing your options

If you want to focus on expanding your eCommerce business, it’s essential to make sure you are efficiently utilizing your resources to maximize profits. If you’re unsure of whether or not adopting an inventory management software will be worth it – think about how much it’s currently costing you to manage inventory (employees, equipment, time, etc.) and weigh it against the costs of the softwares you’re considering.


Inventory management - what even is it_ - Google Docs - Google Chrome 2015-07-16 16.53.33Jacqueline Wibowo works with the product and content marketing teams at Tradegecko. At Tradegecko, we specialize in simplifying inventory and operations – so business can focus on what they care about most – growth.

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