5 Common Inventory Management Mistakes in Multichannel Businesses

Discover the flaws in inventory management in multichannel companies that can harm the quality of customer service

Efficient warehouse management is one of the fundamental pillars for the success of a business. This is because it not only ensures the quality of services provided to the customer but also enables operational efficiency and cost reduction. Management errors can be costly and even hinder the growth of the company. That’s why it’s necessary to continuously act to avoid them.

If, for example, your inventory information is unreliable or outdated, you are likely to accidentally sell a product that is not available. And this small error can become significant if the interested customer decides to criticize your company on social media or review pages.

This example clearly demonstrates that, even behind the scenes, inventory management has a strong impact on your brand’s image and the success of your business. For those who sell multichannel, this influence is even greater and requires special attention in inventory management. After all, it is necessary to ensure that customers receive the same standard of service across all channels. And this becomes a challenge when there are several titles to manage. However, with the right tools, obstacles can be overcome.

In this text, we present the five most damaging inventory management errors for companies that invest in multichannel sales. Know the details of each one so you can avoid them and follow a path to success.

Error 1: Ignoring Stock Levels

One of the most common errors in inventory management is negligence. This is often because you don’t have time to track stock levels and update them continuously. Although this problem may seem easy to avoid, when you offer a wide variety of items across multiple channels, it becomes increasingly difficult to keep track of everything in a timely manner.

The best method to address this scenario is to use specialized warehouse management software, the WMS system, which automatically updates stock levels across all channels. This means you don’t have to worry about stockouts or excess inventory. Additionally, considering how much you can save on manual stock verification and missed sales, investing in technology will certainly bring you greater gains.

2nd Error: Excess Stock of Merchandise

Inventory management is a balancing act: you want enough stock to meet demand, but not too much because you pay storage costs. Additionally, excess stock can lead to losses.

This is why excess stock is an error that can severely damage the profitability of the company. If you don’t want to engage in this, don’t automatically order new supplies from your inventory without having accurate data at hand indicating the need for replenishment. Ideally, you should monitor your sales records and the flow in your warehouse so you can request supplies only when necessary. To this end, having specialized software that offers reliable and immediately updated information is essential.

3rd Error: Forgetting Safety Stock

If an unexpected increase in sales of a product occurs suddenly, it might be difficult to serve it if the stocks are not prepared, right? What happens if your supplier has a delivery problem?

These situations must be overcome by ensuring a safety stock, that is, a small surplus that will be used only in specific moments, such as sales increases or supply problems. This additional amount ensures that you don’t lose a sale or damage your reputation with a “product not available” message.

4th Error: Not Paying Attention to Sales Seasonality

Your sales are more predictable than you might think. Reviewing sales history allows you to optimize your future strategies and also anticipate inventory needs. Your sales records help not only to define the ideal stock levels for each item, predict demand fluctuations, but also to reorganize the layout according to ABC Classification, ensuring greater agility in order fulfillment.

Examine sales data for the entire year, taking into account seasonal purchasing trends and holidays. Also, take advantage of replenishment forecast reports. These reports calculate the average of your sales and delivery times from suppliers and subsequently indicate how much stock you need to acquire to always have the product in the right place at the right time.

5th Error: Disorganized Warehouses

The more warehouses you have, the harder it will be to keep them organized. But this cannot be ignored. Inefficient warehouses are a common error that can block your business. There are several strategies to optimize warehouse efficiency; therefore, choose the methods that work best for you, always prioritizing a good layout, standardizing processes, maintaining productivity, and efficient stock management.

To assist you in this, rely on the WMS system. The software helps with smart routing, task management, defining the best paths, stock rotation, among other advantages that directly affect the organization of your warehouses (Discover everything about the system here). And the best part is that with WMS you have real-time information, allowing you to anticipate failures and make the right decisions for perfect operations management. 

You can view the previous list as ways to fail in multichannel business or as opportunities for success. If you prepare to avoid these failures and seek constant improvement in logistics, there is nothing to fear. To do this, it is necessary to have a keen eye on the future, relying on the support of technology. Remember that innovating means first and foremost executing processes intelligently. And this is what specialized software and automation systems can do for your company.

Since these are common errors that many retailers still make, you can stay ahead of the competition simply by not making them! Especially if you are just starting: making the recommended changes allows you to circumvent errors before they can occur. For example, if you order extra stock to ensure safety stock or implement the WMS system from the start, you will have already avoided some of these problems from occurring.

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