A Guide To Multichannel Inventory Management

a woman in black top presenting about inventory management

Multichannel inventory management (also known as multi-source inventory) is the method of accounting for and tracking orders from different distribution outlets on merchandise held in several locations, such as marketplaces, eCommerce platforms, and wholesale.

Since several different departments need inventory data for various purposes, how the information is communicated through the organization is critical. In addition, having concrete inventory data eliminates coordination problems. Inventory is at the core of any retailer. These days, customers scatter among multiple platforms. Therefore, managing it through multiple channels has become critical to exert a positive customer experience.

The following are the most critical issues to avoid falling into popular traps that sometimes lead to business failure.


Each year, retailers lose $634 billion due to out-of-stock products. Phantom stock, or stock classified as available at a storage location within an inventory system but isn’t present, is a significant contributor. This may be due to an incorrect entry or a software error.

If you plan to advertise a low-in-stock product, decentralization — or the lack of software to synchronize sales across all channels and update mentioned quantities in real-time — becomes an even bigger problem. Items could sell out on several media at once, forcing you to cancel orders or to bear other stockout consequences.


Overstocks are responsible for $471.9 billion in retail losses last year. The majority of the time, this is due to a lack of inventory preparation. Sellers could, for example, overestimate their expected sales volume, resulting in higher inventory carrying costs and less space in their warehouses for newer, more profitable products.

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Another common problem is when sellers only list a portion of their inventory on one channel and the rest on another to avoid overselling. However, this results in customers leaving your store when it’s out of stock while in fact, the total inventory is still full.

Underappreciated warehouse room 

Many companies would split their inventory through several distribution centers to ensure omnichannel fulfillment coverage and quick delivery on all sales channels. However, if you don’t know how to do it wisely, you might end up with higher shipping costs and longer delivery times. Your customers might also have to deal with split shipments if you send a single order from several warehouses.

Predicting and inventory control

Inventory control and forecasting should be a top priority when narrowing down your tech options. Therefore, it’s in your best interest to track elements including: 

  • Individual products
  • Key components
  • Product combinations
  • Packages and kits, etc. 

This SKU versatility gives you instant access to your product data. It also allows for better multichannel inventory management so that you can replenish on time and keep track of best-selling items.

Scanning and barcoding

Barcoding and scanning make it much easier to capture real-time data from your different warehouse locations. It makes sure that you’re dealing with real-time, reliable stock data, which is one of the most critical considerations for large companies with several warehouses and fluctuating inventory levels.

In other words, barcoding technology is an essential part of your multichannel inventory management. However, not all inventory management tools can work with barcode scanners. Check whether your tools are compatible with one another and that the operating program can handle barcode accessories. Another option is to search stock with your mobile device, which will require an app like Bar coders or Scout.

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Configurability and customization

Specific inventory management software makes customization difficult. However, since companies function in different ways, customization and configurability are essential. It would be easier to execute the multichannel program if you can customize and configure it as much as possible. Look for options that include a robust App Store or integration directory.



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