EffectConnect warehouse inventory marketplaces

The importance of inventory management when selling via marketplaces

Nov 23, 2021

As a brand or wholesaler, you can no longer ignore the success of marketplaces and how selling through multiple channels…
As a brand or wholesaler, you can no longer ignore the success of marketplaces and how selling through multiple channels is beneficial for your growth. This growth naturally comes with new challenges, such as efficiently managing your stock. In this blog, we’ll show you how to use a good inventory strategy when you sell via (several) marketplaces.

Inventory management in multichannel sales

When you sell through a single platform such as your own online store, you’re usually only managing one inventory file, a set of sales data and product listings. Your biggest challenges will be controlling costs and making sure there are no major discrepancies between the stated quantity and what is actually in your warehouse, what is being shipped and what is being restocked.
Every time you add a new sales channel, this process gets more cumbersome. When you sell through multiple channels, you will have to take into account not only the complexity of inventory management, but also the buying behavior of your consumer, turnover rates, returns, shipping, and demand from your different channels.
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You should not only match the stock to what is in your warehouse, but also to what’s offered on multiple channels at the same time. For example, if you sell the same products across multiple channels, you’ll need to manage and aggregate SKUs so you know which products are identical and manage inventory in the same way.

Orders from multiple channels can come in at any time. It’s easy to lose track when you have to do it all manually.

Automate your sales

When submitting stock data to the marketplace, it’s important that this data is accurate. In order to guarantee an accurate stock level, you have to take into account a number of factors: your new assortment must be processed in your stock feed, orders that come in through different sales channels must be debited, and of course, you’ll have to keep track of your returns.

Keeping track of your inventory manually, especially when you sell through multiple channels, can become a time-consuming and error-prone job with a few risks. Firstly, it takes longer to put the orders into your own system, which means that order picking starts later and the entire logistics process is delayed. The chances of making typos are also increased, especially if you manually update many orders in a day. But the biggest risk you run is that your ranking on the marketplace drops if you can’t keep your delivery promises due to errors in the stock data. A lower marketplace ranking affects your position in the buy-box, and ultimately, your conversion. You want to avoid this at all costs.

An order link between the marketplace and your own webshop can offer a solution for this. Orders are automatically imported into your own system through this link.

EffectConnect offers stock synchronization with the order link. This feature ensures that your stocks on the marketplaces are updated every 20 minutes, and takes into account the stock in your own e-commerce environment.

Avoid an oversupply of stock

Because the sales volume on marketplaces is so much higher, stocks constantly have to be replenished. To tackle this, many sellers choose to stock more inventory than necessary.

Sometimes, stock is left behind, which has an impact on its gross margin, or the selling price. This “dead” stock is partly due to the turnover rate of certain products, because some items simply sell better than others. The success of a product depends on a number of factors, such as seasonal products or certain trends. This ensures that the storage costs of this dead stock are higher than necessary, especially when they are located in a platform warehouse such as Delivery via Bol or Fulfillment by Amazon.

Prevent problems with financing

With strong growth, you can also run into problems with purchasing forecasts. You will suddenly start having to purchase more, which in turn, affects your working capital. If you have to pre-finance a lot of your purchases, you can run into problems. The longer the stock remains in your warehouse, the longer it will take to receive money for it and the longer it will take to pay your suppliers. Of course you don’t want to end up in a negative spiral with long and short-term debts and all their associated problems. Therefore, a strict purchasing policy is important to make a better forecast for your purchases and make concrete agreements with your suppliers about payments in advance.

To prevent this, you’ll have to optimize the processes around your stock, regularly monitoring articles to determine which products are the fastest and which are not doing so well. You will also have to use a more efficient purchasing strategy that takes into account the minimum and maximum stock. You can choose to keep track of all this manually in an Excel file, but when you’re dealing with many orders, this is almost impossible to do.

Use smart tools!

Fortunately, there are solutions for this, such as Optiply’s inventory optimization software. Optiply uses ingenious AI tools that help you set up data-driven analytics to guarantee inventory optimization.

To ensure that all your marketplace orders are automatically updated on their various marketplaces, EffectConnect’s order link shouldn’t be missed in your stock strategy. With its stock synchronization feature, EffectConnect, will update your stocks on the marketplaces every 20 minutes. This means you always have an accurate stock level, which is important when determining your ranking on the marketplaces. 

Combined, the Optiply software and the EffectConnect order link ensure that you can use an efficient and smart stock strategy on the marketplaces.

This blog is written by Olga van Borren, Content Marketer at EffectConnect.

 

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