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Selling with e-commerce:How to manage your inventory for multiple online channels

What you’ll learn

  • the importance of good inventory management software
  • the ways in which you can assess demand for your product
  • how to calculate safe stock levels and know when to reorder

Selling on multiple channels

Selling your products on multiple channels, for example your own website, social channels and various online marketplaces, allows you to reach more customers and increase your sales potential. However, it can also make inventory management much more complicated. If you don’t keep a close eye on what is being sold you run the risk of overselling, running out of stock and not being able to fulfil orders.

But there are ways in which you can reduce the risks of running out of stock and keep your orders flowing.

Invest in the right inventory management software

Trying to manually manage your inventory across multiple channels is time consuming and complicated. Cloud-based inventory management services can integrate with all your sales channels, automate some of your manual processes and help to minimise the risk of human error.

They offer software which automates channel management, inventory tracking and warehouse management and can calculate average stock levels, forecast demand and manage inventory across all selling channels from one centralised dashboard.

Understand the demand for your product

Good inventory management software can help you understand demand on a day-to-day basis, but you should also keep a close eye on demand and conditions in international markets over the longer term.

Competition, customer habits and many other influences differ hugely between countries and are often in a continual state of flux. Regular reviews of what your customers want in each market will help ensure you are still managing your inventory according to regional demand. 

Maintain accurate stock levels

To manage your inventory effectively, you need to make sure you have enough stock. A good way of doing this is to calculate the Periodic Automatic Replenishment (PAR) level of your inventory. PAR helps you avoid running out of stock by calculating the lowest amount of inventory available at any given time before reordering is required.

PAR can be calculated using the following formula:

(Average daily sales volume x lead time) + safety stock = Reorder point

For example, your average daily sales volume is 15 units and the lead time - the time it takes for new stock to be delivered to you – is 10 days. The safety stock level is the minimum percentage of stock, in units, that is recommended you have available at all times. In many cases this is 50%.

(15 x 10) + 75 = 225 units

That’s 10 days of 15 units (150 units) to cover your lead time, plus 50% of that number (75 units) as safety stock.

In this example PAR recommends you should never go below 225 units in stock.

Hold inventory in multiple international locations

International warehouses and fulfilment centres can help reduce global shipping costs as well as cut delivery times, because goods can be shipped locally rather than from the UK. The greater geographic spread helps to protect your inventory but makes effective management of multiple locations even more crucial. 

Professional fulfilment partners should be able to monitor your inventory and help you maintain the correct stock levels for fulfilment in that geographic region.

Prepare for the unexpected. There are so many factors that can adversely affect your inventory management – from shipping delays to spikes in sales. Use historical data to help you forecast demand and be better prepared for all eventualities.

International trade adviser

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