A Complete Guide to Multi-channel Inventory Management

Handling inventory across various sales channels is a major challenge for today's businesses. With customer expectations higher than ever and the retail environment becoming increasingly complex, keeping stock levels accurate across online platforms, marketplaces, and physical stores is key to sustaining growth.

So, if you too are here, you’re likely facing difficulties scaling your ecommerce business. And if you’re a fast-growing into a medium-sized business with multiple channels processing thousands of orders every month, distributing stocks across different platforms can quickly turn into a nightmare. 

We get it. However, with the right solutions, you can tackle these problems easily. In this article, you’ll learn to consolidate your inventory, reduce errors, automate tracking, and expand your business.

What is multi-channel inventory management?

Multichannel inventory management can be a set of processes or a software that keeps track of inventory across locations and platforms.

It's relatively easy to keep track of stock when you're selling from a single location. However, as your business expands to multiple channels—such as a physical store, an online storefront, and platforms like Amazon or Etsy—the complexity increases. This is where inventory management systems come into play. They centralize your inventory data, ensuring that you have visibility across all your sales channels, no matter where you’re managing your stock from.

For example, you started by selling handmade soap at local farmers' markets and then expanded to a small storefront.

With a physical store, your customers get what they see. Things get a little complex with online stores. You need to be upfront about availability on each product’s landing page. Otherwise, if the required product is not available (and not mentioned upfront), you’ll have to contact the customer after checkout and explain the scenario.

Multi-channel inventory management keeps your product list updated across platforms, while single-channel management simplifies inventory tracking.

Here are the major differences: 

Best practices for multi-channel inventory management

Follow these best practices to truly succeed in the multichannel selling environment.

• Regular reconciliation of inventory data: To avoid discrepancies, make it a habit to reconcile inventory data regularly. This helps catch errors early and ensures that stock levels match what's actually available
  
  
• Using integrated software: Invest in integrated software that connects your online store, marketplaces, and accounting systems 
  
  
• Training staff: Proper training is key to smooth operations. Ensure your team understands the system and knows how to manage inventory updates, refunds, and order fulfillment across channels
  
  
• Leveraging analytics to refine strategies: Use data analytics to track performance, identify trends, and optimize your inventory strategy. This approach helps with better demand forecasting and more accurate stock management.
  
  
• Using safety stock levels: Keep a buffer stock (safety stock) to prevent stockouts during peak seasons or unexpected demand spikes.
  
  
• Optimizing for scalability: As your business grows, make sure your inventory system can handle the increase in orders and channels. Choose software that allows for easy scaling as your business expands
  
  
• Conducting regular audits: Schedule regular inventory audits to verify accuracy. Periodic checks help identify issues and give you a clear picture of inventory health, reducing the chance of costly mistakes
  
  

  Common challenges in multi-channel inventory management

  1. Managing inventory with spreadsheets

  Spreadsheets might seem like a simple solution, but they’re not the best when you run a business across multiple sales channels. While spreadsheets may seem like an easy solution, they often result in limited visibility and a lack of centralized control. 

  Without a unified dashboard, it's challenging to get a clear picture of stock levels across platforms. This lack of visibility can lead to overstocking or understocking on certain channels, making it harder to plan inventory levels effectively. As a result, businesses may find themselves with excess stock in one location while running out of inventory in another, causing financial inefficiencies. 

  For example, let’s say you sell electronics. Amazon could have 200 of your 'Kindle remote,' while eBay only has 30—if you don't have a centralized view of your inventory. Even research suggests that 28% of companies lack inventory visibility across stores, which can lead to lost sales or tied-up resources.  Without a unified system, these inconsistencies and visibility gaps result in significant losses and inefficiencies.

  2. Overselling and how it leads to customer dissatisfaction

  Overselling happens when you think you have enough inventory to fulfill orders, but you don’t. This leads to loss of sales and frustrated customers.

  In fact, research suggests that running out of stock costs retail businesses in the US and Canada approximately $349 billion in 2022. Moreover, it also lowers customer retention and decreases loyalty among your most frequent customers.

  To tackle this, monitor and restock top-selling items. Many businesses use the ABC Analysis Model to prioritize high-impact products. 

  Why multi-channel inventory management matters for ecommerce growth

  Let’s explore how.

  1. Increased sales opportunities by tapping into diverse marketplaces

  Selling on multiple channels will help you reach a diverse audience and also go international whenever possible unlocking new opportunities.

  Skinny Mixes experienced this firsthand. They were managing orders manually, which quickly became overwhelming. With Webgility, Skinny Mixes integrated Amazon, Shopify and Quickbooks, to automate inventory management and bookkeeping. 

  With real-time syncing of sales, orders, journal entries, and inventories, Skinny Mixes recovered the time otherwise spent on busy work such as manual inventory updation, order management, etc. As a result, they increased order volume by 75%, adding $3M in annual revenue.

  2. Improved customer satisfaction through accurate stock availability

  No one wants to deal with the frustration of a customer eager to purchase a product—only to find it’s out of stock at checkout. But it’s not just about avoiding this disappointment. It’s also about how inventory management directly impacts cash flow and customer trust.

  When inventory levels are synced across platforms, businesses can maintain better cash flow by avoiding overstocking or understocking. This means smarter purchasing decisions, fewer write-offs, and more room to reinvest into the business. By passing these benefits on to customers—such as quicker restocks, better availability, and smoother transactions—you’ll keep them happy and loyal.

  With a solid system, inventory levels are continuously updated in real-time, so customers can see live stock availability on all platforms. No surprises at checkout, and no cash flow disruptions. Your business will run more efficiently, and your customers will enjoy a seamless shopping experience every time.

  Tools and technologies for multi-channel inventory management

  Managing inventory across multiple sales channels can be complex, but the right tools can make all the difference. Advanced multi-channel inventory management software offers features like real-time inventory syncing, automated stock updates, pricing adjustments, and centralized dashboards that streamline operations. These tools not only save time but also reduce the errors that often come with manual processes.

  Here’s what you should look for:

  1. Automation software to sync inventory in real time 

  There are many automation software to help add new products, adjusting prices, and update inventory as and when they sell. This makes sure inventory levels are updated on all channels. You can predict stockouts, plan purchase orders in advance with this.

  For example, with Webgility, you can use QuickBooks Inventory or your own online store as a central inventory hub. The integration with QuickBooks syncs inventory, orders, and prices across all your sales channels automatically. As soon as you make a change in one place, it updates everywhere. This saves you time and prevents errors. 

  In addition, You can generate a variety of detailed reports, such as:

  • Sales performance: Analyze how individual channels, products, or promotions are performing to optimize your sales strategies.
    
    
  • Cash flow: Track cash flow trends to ensure you have the funds available to reinvest or cover operational costs.
    
    
  • Profitability: Understand your profit margins at the channel or product level, helping you focus on what drives revenue. Webgility syncs revenue and fee data from sales channels, as well as item costs and cost of goods sold (COGS) from your accounting system. 
    
    
  • Amazon settlement reports: Webgility provides summaries of Amazon settlements and associated fees, linking them to specific orders. This feature allows you to view expenses and fees based on categories such as shipment charges and item fees charged by Amazon.
    
    
  •  Shopify payout reports: For Shopify users, Webgility offers summaries of payouts and fees, associating them with specific orders. This report helps in tracking expenses and understanding the financial aspects of your Shopify transactions.
    
    

  2. Warehouse management system for organized storage and retrieval

  If you already have QuickBooks and you want to map, match, or create product listings, Webgility makes your life easier. It automatically updates inventory when orders are canceled or refunded. 

  The system also helps forecast demand, letting you make smarter purchasing decisions. This reduces the risk of overstocking and ensures that your inventory is always accurate. No more running into the problem of overselling, and you can confidently promise fulfillment to your customers.

  3. AI assistant to fetch details regarding inventory

  Almost 40% of ecommerce marketers are already using AI for data analysis, it's clear that AI is transforming inventory management. But why should you consider adopting it? Simply put, AI doesn’t just identify problems—it solves them by providing real-time insights and actionable recommendations. 

  AI-powered tools like Webgility’s AI Assistant take the guesswork out of managing inventory by automating repetitive tasks and delivering valuable insights directly to you. Here’s how it works:

  • Fetching detailed insights: AI gathers and organizes data from your orders, refunds, fees, and product catalogs, presenting the information in an easy-to-digest format
  • Error reduction: By analyzing trends and spotting inconsistencies across sales channels, AI reduces the risk of costly mistakes, such as overselling or mismatched pricing
  • Time-saving automation: Routine processes like stock adjustments, pricing updates, and bookkeeping are automated, freeing you to focus on strategic growth rather than administrative tasks

  According to our founder, Parag Mamnani, “AI is no longer in the distant future for small and mid-size businesses—it's already here and we're delivering it to our customers, Chat GPT has captured the world's attention with regard to what's possible with AI when you move from a search box to a chat box. Webgility's AI Assistant provides a completely new way for SMBs to perform routine tasks like bookkeeping and inventory management in a chat interface.”

4. Automate product listing and pricing sync across multiple channels

Listing products across multiple platforms can be tedious, but Webgility makes it easy. You can automatically list products from QuickBooks Inventory to Amazon or your online store. Prices, descriptions, and product conditions update across platforms in one click. 

The system also supports bulk listing, making it easier to add new products with preset values. No matter where your product listings are, they will always be up-to-date.

5. Automate POs 

Keeping shelves stocked with what sells best is easier with automated purchase orders. Webgility simplifies the process, helping you restock efficiently while avoiding unnecessary inventory buildup. This integration allows seamless data transfer between your online store and QuickBooks, facilitating efficient accounting processes.

How Webgility makes multi-channel inventory management seamless

Webgility is the go-to tool for eCommerce businesses selling across multiple channels and using QuickBooks for accounting. It automates inventory syncing, ensures accurate financial reporting, and streamlines inventory management—eliminating stockouts, overselling, and manual data entry errors.

Rider Shack, a surf shop founded by Jeff and Lacey Glass, started in a 500 sq. ft. garage and grew into a retail store and online shop via Magento. Managing inventory across both locations manually became a challenge. 

"It was time-consuming and often led to out-of-stock issues. A few times a week, we had to cancel orders because of it. Customers hated that." Jeff recalls.

Jeff and Lacey tried T-Hub but ran into bugs and poor customer support. Then they switched to Webgility.

Since adopting Webgility, Rider Shack has saved $1,400 a month, reduced inventory management time by 15 hours a week, and cut shipping processing time by 25%. 

"We sync our inventory every two days, but during busy sales, we sync multiple times a day," Jeff says. "This would be impossible without Webgility." 

With Webgility handling the tasks, Jeff and Lacey can focus on growing their business and improving customer experiences.

Give it a try for free and see how it can transform your inventory process!

FAQs

What is the best way to manage inventory across multiple channels?

The best way is to use an integrated inventory management system that syncs stock across all platforms in real time. This ensures accurate stock levels and prevents overselling or stockouts.

How does multi-channel inventory management help prevent overselling?

Multi-channel inventory management automatically updates stock across all channels, reducing the chances of overselling. It provides a clear view of available inventory, so you can prevent selling items out of stock.

How do managers keep track of certain inventory items?

Managers can track inventory items using software like Webgility that offers real-time updates and detailed reporting. This allows them to monitor stock levels and sales patterns for better decision-making.