Multichannel inventory management: A beginner’s guide for 2023
Running a business

Multichannel inventory management: A beginner’s guide


What is multichannel inventory management?

Multichannel inventory management is when a business sells products in different places, such as retail stores and e-commerce websites, and has to keep track of inventory and orders across all places.


Managing your business’s inventory levels is key to knowing how much and when to order more product. But things get more complicated when you have to manage inventory from different sales channels

Whether you’re managing inventory from retail stores, e-commerce, wholesale—or all of the above—you have to ensure to track your inventory correctly and in real-time. After all, you don’t want customers to order a sold-out product (and they don’t want to either). 

Multichannel selling is complex, but when done properly with the right tools, you can keep all the moving parts connected. From the warehouse to your online store, you’ll learn everything you need to know in this article about multichannel inventory management, so you’ll never have a missing piece. 


Multichannel inventory management challenges

There are many challenges you’ll face when dealing with multichannel inventory management. Think of it like domino toppling—even with one domino missing or placed wrong, the chain reaction won’t work, affecting the end result. 

Let’s look at some common challenges businesses face when managing multichannel inventory.

A list of some multichannel inventory management challenges, including bad customer experience, overselling and overstocking, difficult to forest inventory, and manual inventory management.

Bad customer experience

How you manage your inventory affects customer experience. Poorly managing your inventory can lead to customers ordering a product you don’t have in stock, not getting a product on time, or canceling their order. This leads to frustration and sometimes lost customers. 

Overselling and overstocking

You want to keep the right level of inventory storage to avoid overselling or overstocking. Multichannel selling without proper inventory management makes it difficult to predict demand. This can lead to you selling products you don’t have or having too much inventory in stock. 

Difficult to forecast inventory

Understanding your inventory data gives you an insight into product availability, pricing, and demand, which helps you better manage your supply chain. But inventory forecasting for multiple channels adds another layer of difficulty. For example, you might have different metrics or a different inventory system for your retail vs. e-commerce stores.  

Manual inventory management

Some small businesses manually track inventory, usually with a spreadsheet. But if you’re growing and adding new selling channels to your business, things become more complex. Manually tracking inventory for multiple channels means you’ll have to update the data for each channel and sync it, which can lead to more errors. 


Benefits of multichannel inventory management 

Implementing strong multichannel inventory management strategies can help you avoid mistakes and overcome challenges. In turn, you’ll have a system with all the pieces connected for a seamless process. 


Let’s look at some benefits of properly managing multichannel inventory.

A list of some multichannel inventory management benefits, including accurate inventory, accurate insights, streamlined operations, and increased scalability.

Accurate inventory 

With the right multichannel inventory management strategy and tool, you’ll have accurate inventory for all selling points. This ensures you have the inventory amount that matches your business’s channels, from the warehouse to your e-commerce store. 

When you have accurate inventory, customers will get the correct products on time and will likely never receive an “Oops, we’re out of stock” message. Ideally, with multichannel inventory management, once you sell a product in a retail store, all other sales channels will update. 

Accurate insights

Managing your inventory on multiple channels also gets you accurate insights on demand, inventory, and buying preferences, so you’ll know what and when to replenish. 

You’ll also have a better understanding of what your customers prefer and where they shop most often. 

Streamlined operations

Inventory accuracy and insights allow you to streamline your operations across the board. This allows you to find ways to deliver your products faster and easier or find issues across your supply chain. 

For example, when a customer buys a product online, you’ll be able to give them the closest location for pickup or the fastest delivery method. Your team will also get updates on which products to separate for pickup or shipment. 

Increased scalability

By automating multichannel inventory management, you’ll have a more streamlined inventory tracking process, allowing you to scale your business and add new selling channels. You’ll be able to connect each new channel to your system and keep things streamlined on the back end. 


How to choose a multichannel inventory management software

The key to successful multichannel inventory management lies in the inventory management software you choose. Finding one that fits your business’s needs and size will help you easily manage your inventory across all channels. 

When choosing a multichannel inventory management software, consider whether it has some of these features: 

  • Real-time updates on inventory for all locations
  • Specific data for each product, including SKUs, color, and size. 
  • Ability to customize and control your tool
  • Analytics and integrations
  • Order automation
  • Different shipping options
  • Capability to scan barcodes
  • Automatic stock updates

The right inventory management software will allow you to keep things centralized, control inventory, and your team connected on all ends. 


Tips for managing multichannel inventory

Ensuring your multichannel inventory is properly executed and up to date gives you more accurate insights on inventory value and levels, better predictions, and happier customers.

A list of some multichannel inventory management tips, including organizing databases, checking database's daily, logging orders, scanning barcodes, handling returns, cross-checking your inventory, and tracking inventory levels.

Here are some inventory management tips to help you successfully manage multiple channels:

  • Keep your database organized: Separate products into categories and subcategories, add labels, and keep the product information up to date. 
  • Stay updated: Make a habit of checking your inventory daily and looking out for any issues. 
  • Log orders as they come: Add orders, invoicing, and shipping information immediately after receiving them. 
  • Use barcode scanning: Make tracking inventory faster and avoid mistakes by using a barcode scanner to log your products. 
  • Don’t forget about returns: Keep track of products returned and log them in once you receive them. 
  • Count your inventory: At least weekly or monthly, double-check that the inventory on hand matches what you have in the system. 
  • Track your inventory levels: Ensure you have the right amount of inventory needed to avoid understocking and place orders with suppliers when needed. 

Keeping all information in one platform helps you better manage inventory and ensures a smooth workflow. 


Run your business with confidence

Growing your business is exciting, but it comes with many challenges, especially if you’re selling on multiple channels. The secret to multichannel inventory management is keeping everything centralized, so you can access information from your e-commerce and retail stores in one place. 

Multichannel inventory management software like QuickBooks provides intuitive automations and integrations to streamline the process further. By leveraging the right software and strategies, companies can reap significant benefits from multichannel inventory management and remain competitive in the evolving market.

An infographic explaining multichannel inventory management challenges, benefits, and tips.

Multichannel inventory management FAQ


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