What is multi channel inventory management?

Multichannel inventory management is the workflow used by various businesses to capture information on orders and inventory from various sales sources. These sales sources can be at various locations, marketplaces, retail or wholesale. The main part of this process is how the inventory information is retrieved and shared with various departments. With such a system in place, a business can track inventory of different locations helping the business to check overstocking, under stocking, reordering, and do inventory forecasting. This provides the business the competitive edge in their operations, which extends to the best customer experience.

A streamlined flow will never let the customer know the complexity of the system. The business can now focus on important tasks of strategy and growth. The end goal of Inventory management for customers is to provide the products anytime and anywhere, whereas for the organization is to stay up to date on stocks.

What are the obstacles in multichannel sales companies?

The multi-sales channel brings a lot of difficulties in management along with opportunities. This opens the business to a lot of risks. Therefore, not having an effective solution will push the business to the edge. Some of the common problems faced by companies are: -


Having Overstock is never a good decision. First of all, it adds to your expenses, second, it will force you to move the stocks which might lead to a sale at a discounted price. Thirdly, it will also increase the cost of your storage solutions, which then might affect sales channels. This all adds up your overhead, which will show effects on your balance sheet.

it is necessary to find the right inventory management solution for unexpected stock levels

Stocking wrong products

This is due to the wrong information on stocks, which leads to aggregation of those products at wrong places where the demand itself is not there. This leads to the lack of space for the right products in the inventory. You might then start adding inventory costs to the cost price of the item, which might result in unhappy customers. Similarly, it will add delay in delivery of the items to the customer because of the non-availability of the right items.


When a business manages sales on multiple channels, they often get allured in overbooking of the products despite not having items available readily. This is a grave concern as it leaves a bad impression on customers, and they might not do business again, causing damage to the reputation. Hence, to manage inventory, having a right software or tool can be beneficial.

Inventory Clarity

Along with the other problems mentioned above, a lack of visibility in your inventory can affect the fulfilment process. The business won't be able to inventory prediction based on usage and stocks, leads to problems for the customers who depend on fulfilment. This also shows loopholes in your strategy and makes customers lose trust in you.

What are the benefits of multichannel inventory management?

An inventory management system will provide you the insights into the inventory and enables you to make the right decision. The advantages of having inventory management tools are similar to moving to the right structure of inventory management. It is also better to look for additional benefits when choosing the tools.

1. Data Integration

Data integration consists of automation of data aggregation quickly for faster turnaround. Earlier, all this process of updating the inventory for each channel was done manually. This also increases the chance of human error that might cause inaccuracies in your data. With automation around, you can update and respond to the order quickly. The larger the process, the more benefit you can see. All the processes, as well as inventory centres, are synchronized with the sales channels. It gives the business real-time data tracking on the available inventory.

One can also say the business now has more control over the inventory data, even if sales volumes fluctuate across multiple channels.

One more advantage is the integration with accounting, which will help you to do accounting and reconciliation activities quickly. The good part of the multichannel inventory tool is the capability of integrating with most of the accounting software. This can automatically generate purchase orders to fulfil the process. As a result, customer expectations will also be met.

2. Supply Chain Automation

Your business includes dealings with thousands of vendors and suppliers, managing them can be a real challenge. Your relationship with the suppliers defines how you are able to stock the things and how quickly you can do that. It needs effective communication with the suppliers and let them know about the stocks, leaving them a margin to fulfil it. This whole exercise is complicated when it comes to a different portfolio of suppliers with warehouses in different locations. This has its effect on the order fulfilment; the final stage where you are delivering the products to the customer. The most important transaction of the sales channels or cycle should not be accompanied by late or no delivery of the products to multiple locations. Thus, the Inventory management software solution which consists of automating all the above processes is an important part of the process.

manage higher shipping costs with inventory management strategy

Inventory management software tools help you to look into shipping tracking by providing regular real-time updates. These updates are for both business and customer; hence putting less pressure on customer service operations.

Inventory management software not only provides information on shipping but the critical information like pricing, MOQ, delivery time, production time, etc. It can generate purchase orders on triggers like low stock etc. You don’t have to do the manual calculation, the system will do it for you based on your inputs.

3. Business intelligence

The inventory management won’t be successful unless you understand the sales trends and the demand for the products. Taking control of inventory means you understand the market and can supply the demand at a rate which the market is asking for. The multichannel inventory management system/tool comes with dashboards that will help you to understand the selling patterns (sales data) across the year. It can help you prioritize the items and determine the demand forecasting; helping you to be prepared for the sales. It can also help you in designing the promotional and marketing activities around it. This will not help in managing inventory but also push the ecommerce business with a high customer satisfaction.