“I’m juggling inventory to avoid overselling a product.”
Omni Channel Pain Point No. 4
Our pain point for February is one that we hear often from retailers, especially those selling on multiple channels: “I’m juggling inventory to avoid overselling a product.” The term ‘juggling’ is something you want to hear a clown say in reference to the bowling pins he’ll be tossing around at your son’s birthday party. ‘Juggling’ is definitely not something you want to hear from a retailer, specifically not from the person in charge of allocating inventory for a retail organization. Unfortunately, many retailers struggle to maintain cross-channel inventory levels.
Growing online retailers that sell on marketplaces like Amazon and Ebay, in addition to their own websites, run the risk of overselling a product when inventory levels are not updated across channels in as close to real-time as possible. For e-tailers first starting out, it doesn’t make sense to maintain a deep physical inventory for each product offered. It would be difficult to predict best-selling products, and the overhead of purchasing and storing such inventory would be costly. For example, an online electronics retailer might list 10 of one item on Amazon, 10 of the item on Newegg and 10 of the same item on their own store, all while physically only holding 20 units of the item on hand. As you can see, this presents the potential problem of overselling the product, especially if the seller relies on manual or semi-manual processes such as taking orders in batches instead of real time, or uploading new inventory levels via daily files instead of API calls to each online storefront.
Larger retailers are not immune to the chore of ‘juggling’ inventory either. Today’s shoppers expect a myriad of options for receiving their purchases, and most established retailers now give customers the chance to order online and pick up in-store. For this option to work seamlessly, the retailer’s website must display current inventory levels for each product in each retail location. As anyone working in retail logistics can tell you, this is a task much easier said than done. In order to display accurate, up-to-date inventory levels for each store, the website must communicate with the store’s point-of-sale system and take into account other web orders that are allocated to be shipped from a store. This is assuming that the store’s inventory is verified upon receipt and kept updated via regular stock counts. With all these variables, it’s easy to see how mistakes can happen. Retailers might sell an item online to be picked up in-store, only to find that the item is out of stock and an apology email must be sent to the customer.
So what can retailers do to avoid these mistakes and keep track of inventory in an organized way? The use of inventory management software can help by providing one place to sync inventory across channels. With a system like SalesWarp, the retailer can also set the amount of stock kept on hand for each product, and define thresholds that trigger the system to automatically generate purchase orders to reorder fast-selling items. Another benefit to managing inventory from a system like SalesWarp is that product information and orders are managed from the same system, so there’s no lag time in updating product listings or allocating inventory for orders received. That means no more juggling. Unless you count that bowling pin flying for your head.