Multichannel Inventory Management: Problems & Solutions

Multichannel inventory management is one of the top challenges in ecommerce.

Carrying costs, reverse logistics, and negative customer experiences can imperil future repeat sales.

Fulfilling orders efficiently, regardless of the channel through which orders are placed, requires knowing how much stock you have and where it’s located, and having the ability to ship inventory from the warehouse closest to the customer automatically.

Supply chain diversification and resilience are vital strategic objectives. Executing in a new world requires mastering multichannel inventory management.

What is multichannel inventory management?

Multichannel inventory management is the process of tracking, managing, and fulfilling inventory across various channels through a single system. Common sales channels retailers now use include:

• Physical retail stores
• Ecommerce websites
• Online marketplaces (e.g., Amazon, eBay, Etsy)
• Social media platforms (e.g., Instagram, TikTok Shop)

Businesses use multichannel inventory management systems to gain real-time visibility into their inventory levels. Imagine one of your products goes viral on TikTok overnight. Without a proper inventory management system, you’d wake up to hundreds of new orders, but no idea if you have enough stock to fulfill them. A centralized system helps you scale and meet surging demand. 

Benefits of multichannel ecommerce inventory management

Today’s cloud-based solutions leverage automation, and are adopting artificial intelligence (AI) to streamline workflows. These tools let businesses easily track, manage, and organize inventory sales, purchases, and production across channels.

Here then, are some of the benefits of implementing a multichannel inventory management solution:

1. Real-time visibility and synchronization

It’s next to impossible to manually update and synchronize inventory counts between multiple locations and across all platforms. Without real-time visibility, costly stockouts, deadstock, and preventable returns are more likely.

Fast-growing, high-volume brands rely on multichannel inventory management tools that sync inventory across channels and provide real-time visibility from a centralized hub which they can trust as a single source of truth. These solutions allow businesses to improve sales and reduce the time spent managing inventory.

Platforms like Shopify offer built-in multi-location real-time inventory tracking that automatically synchronizes stock counts across warehouses, stores, and online channels in real time, eliminating manual reconciliation. Automation tools like Shopify Flow instantly notify teams when stock runs low, enabling proactive replenishment before stockouts occur.

👉 Use this Shopify Flow template

2. Optimize inventory forecasting

Improved inventory visibility also helps brands better track their inventory turnover ratio, a key metric in assessing the business's health. This insight informs product pricing adjustments and future restocking decisions, improving profitability.

If you limit the inventory you hold but market it effectively across multiple channels, you run the risk of overselling—selling items you don’t have in stock.

Inventory management systems can help you accurately forecast demand and better position yourself to manage and replenish inventory appropriately, based on marketing spend as well as the historical impact of seasonality.

For instance, if you’re an omnichannel sports retailer, knowing exactly how many basketballs were sold on each channel during December for the past five years would be useful. This would let you make informed purchase and marketing decisions for the holiday season.

Tools like Shopify’s Stocky app (free with POS Pro) take historical sales data, factor in lead times and seasonality, and recommend precise reorder points. Similarly, Shopify’s demand forecasting features can automatically predict sales at the product level, helping retailers keep optimal inventory levels year-round.

An efficient multichannel inventory management software also allows you to scale up during a rush or holiday season, and down during the offseason. As a result, you’ll be able to reduce costs by not purchasing inventory until it’s needed.

3. Locate inventory closer to customers

You must have the right inventory in the right locations to ship faster and cheaper. Having multiple strategically located fulfillment centers or retail locations positions brands to intelligently route orders to the fulfillment center nearest the customer.

While local fulfillment is vitally important for international customers, it can also help reduce delivery times across wide geographical areas such as the United States, and fragmented geographical areas such as Japan or Indonesia.

Retailers can use services like Shopify Fulfillment Network (SFN), which places inventory across a network of fulfillment centers. The tool automatically routes each customer order to the nearest warehouse for faster deliveries and lower shipping costs.

How to manage inventory across channels

Effective multichannel inventory management starts with choosing an integrated solution like Shopify. Our commerce platform seamlessly connects your physical retail locations with your online store, social commerce channels, and third-party marketplaces.

When you make a sale in-store using Shopify POS, your inventory updates across all your connected channels, whether it’s Amazon or TikTok Shop. When a product is returned or restocked, inventory levels sync automatically, giving you real-time visibility and reducing human errors.

With Shopify’s centralized inventory dashboard, you can:

• View stock levels: Monitor stock levels across various retail locations, warehouses, and online channels in real time.
• Set inventory alerts: Use inventory alert apps from the Shopify App Store to receive notifications and proactively restock bestsellers to avoid stockouts.
• Adjust inventory distribution: Easily adjust and optimize inventory distribution to meet changing demand or seasonal trends, ensuring efficient inventory management.

To find these reports:

1. From your Shopify admin, go to Analytics > Reports.
2. Click Categories.
3. Click Inventory to filter the reports to show only inventory reports.

What to look for in a multichannel inventory software

Selecting the right multichannel inventory management system can feel like assembling a championship team: each player (or feature, in this case) has a specific role to play in your business’s overall success. As your business grows across more sales channels, your software should effortlessly scale with you. 

Here's what to consider when choosing your ideal multichannel inventory software:

Inventory control

Robust inventory management systems can help you identify out-of-stock (OOS) patterns. For example, retailers can identify OOS trends by regularly auditing inventory and noting the days and times of week stockouts are most likely to occur.

OOS can also be prevented by implementing inventory management solutions that position brands to set specific rules that automatically reorder inventory when certain thresholds are met.

Barcoding and scanning

Barcoding and scanning tools help you:

• Track products easily, accurately, and efficiently
• Monitor inventory movement
• Simplify reconciliation
• Reduce transaction errors
• Generate shipping labels

You can input SKU information into your systems quickly and accurately with barcodes and scanners, removing human error. You can also speed up inventory management tasks, like stocktaking, by scanning barcodes instead of manually counting and sorting items.

Analytics

Analytics helps you get a comprehensive picture of where and how inventory is used across different channels. It analyzes inventory levels, pricing, sales data, and historical data to identify trends. Accessing this data from a single platform and quickly viewing inventory snapchats can help inform inventory control and supply chain strategies.

Integration

Part of an effective multiple fulfillment center strategy is integrating an order management system (OMS). An OMS allows you to check stock levels across multiple locations, pick a fulfillment center closest to your customer, send order details straight to that location, and have stock levels automatically update across all your channels.

The importance of systems integrations such as these for inventory management and order fulfillment can’t be understated. In fact, integration is the top challenge in fulfilling multichannel orders worldwide.

In addition to seamless integration, automating fulfillment processes is a crucial step in streamlining inventory management and order fulfillment.

Automation frees up your team to focus its time on growth opportunities instead of repetitive stock reordering tasks. With automation, you’ll never run out of inventory, as you receive automated backorder notifications and replenishment reports in real time.

For instance, if the quantity of an item in stock drops below the reorder value, automation can instantly alert you that the item needs reordering. With the right integrations, replenishment may be automated as well, or the automated restock alert may be checked against predictive demand forecasts and reordered.

While integrated commerce relies on connecting separate systems through complex middleware that often breaks and creates data silos, Shopify stands alone as the only truly unified commerce solution built on a singular codebase.

 Many retailers struggle with integrated solutions that require constant maintenance, creating synchronization delays that damage customer experience and increase operational costs. Our research shows competitors like BigCommerce have 21% higher operating costs. Shopify's unified approach eliminates these headaches by providing a seamless, single source of truth for inventory across all sales channels. 

This unified architecture reduces technical complexity and allows merchants to launch products faster. For example, Skullcandy can now bring new products to life on their site in just 30 minutes compared to a day and a half previously.

Ease of use 

The ideal inventory software simplifies management, even as your channels multiply. Shopify is known for intuitive, user-friendly interfaces that anyone on your team can quickly learn, no extensive training required.

Choose a platform that:

• Provides a clean, intuitive user interface.
• Enables easy onboarding for new staff.
• Offers scalable solutions that handle your growth.

When your inventory system is easy to use, everyone from store managers to warehouse teams can maintain accurate inventory without hassles or headaches.

Top multichannel inventory management software

Many of the top multichannel inventory management platforms offer simple one-click integration with Shopify.

When evaluating the right inventory management software for your ecommerce business, understand that there likely will be overlap with other systems you already have.

For example, your order management system (OMS may overlap with features in the inventory management systems (IMS) you’re evaluating.

It’s also important to understand the product roadmap for the solutions you’re evaluating. Specifically, some IMSs ultimately aim to become a full enterprise resource planning system (ERP), single source of truth (SSOT), or commerce operating system. Be sure you evaluate IMSs in the context of the features already offered natively in your ecommerce platform.

Below are IMSs to evaluate:

Shopify Fulfillment Network

Shopify Fulfillment Network (SFN) is a third-party logistics provide (3PL) that, when combined with your Shopify commerce platform, offers an end-to-end multichannel inventory management solution that gets orders to your customers easily and quickly.

With a vast network of strategically located fulfillment centers nationwide, full-service 3PLs like ours ensure you have the right merchandise at the right location, so orders ship faster and cheaper.

SFN provides businesses with AI-powered inventory intelligence that recommends where inventory should be stored. Not only does it easily integrate with your existing systems, but it also enables a branded experience and same-day fulfillment optimization.

QuickBooks Commerce (Formerly TradeGecko)

QuickBooks Commerce is a powerful cloud-based IMS that combines all your sales channels, locations, and currencies for easy management of products, orders, and customers across multiple Shopify stores.

It integrates with popular bookkeeping software such as ShipStation, allowing you to send quotes and invoices with built-in credit card payments directly to your customers. The QuickBooks Commerce mobile app allows you to create and manage orders, view detailed reports, and track sales trends while on the go.

Orderbot

Orderbot is an order and inventory management system that lets you consolidate orders that flow from multiple channels with clear inventory and fulfillment visibility. It contains all the key functionality you need, such as multicurrency, integrated payment gateways, a fully published API, and import/export capabilities.

Whether you have one or more warehouses, multiple Shopify stores, B2B channels, or even marketplace integration with Amazon FBA, Orderbot’s focus on visibility helps you keep up to date with both current and future orders.

Sellbrite

Sellbrite is a comprehensive multichannel inventory management system for Shopify merchants. It allows you to publish your inventory across other channels like Walmart and Amazon quickly and easily. You can manage products with variations, automate purchase orders, generate smart reports, and invite your team to manage your multichannel business on Sellbrite.

Upgrade your inventory management capabilities

Whether you’re running an ecommerce store that is currently selling products across multiple channels, or you’re thinking about reshaping your business to incorporate multiple channels, it’s essential to recognize that manual inventory management is no longer sufficient or effective for multichannel commerce.

Cloud-based multichannel inventory solutions can help you organize your business, keep your customers happy, and give you the best chance for future growth.

Ready to take the next step in your journey? Get in touch with our team of experts.

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Multichannel inventory management FAQ

What are the 3 major inventory management techniques?

Just-in-time (JIT) inventory management uses real-time demand analysis to only order and stock items as needed, reducing inventory costs. Vendor-managed inventory (VMI) involves collaborating with suppliers and customers to jointly manage the customer’s inventory levels. Always better control (ABC) analysis classifies inventory items by importance, helping businesses prioritize their management efforts.

What is a channel inventory?

Channel inventory refers to the amount of inventory currently being produced or moved through the supply chain for delivery to the end customer.

What is multichannel listing software?

Multichannel listing software enables retailers to list and manage their products across multiple sales channels—like online marketplaces, ecommerce stores, and social platforms—streamlining processes and improving efficiency.

Why is multichannel inventory management important?

It helps businesses track stock levels in real time across all their sales channels. This accuracy leads to better fulfillment, reduced errors, and happier customers who receive their products on time.