Ecommerce undersales and oversales.
Being a small store owner usually it is kind of normal to handle your inventory by doing manual work, keeping stock in some excel files, writing it down somewhere in paper, or just updating things directly on your website backend, be it Shopify, BigCommerce, WooCommerce etc…
So far, so good. The problems arise when your business starts to grow. Your products are being purchased more often now, and you need a way to fulfill them fast, at the same time update the product quantities shown on the live website same as they are in your warehouse. (be it your garage or a small warehouse). While you try to find some time between opening the champagne for the sales, shipping the products to the customers, filling stock back in from your suppliers and manually changing/updating the quantities, a serious desynchronization is happening to your store.
Your ads are running but stock is finished because you couldn’t find yet the time to add the new quantity values. You are losing valuable customers and this is kind of bad for your business and your pockets in the end.
Another day passes, you have manually synchronized everything and business is going great, a lot of sales are coming, email list is growing and an idea comes to your mind:
Why don’t I start selling on Ebay and Amazon, or any other marketplace out there?
As well, you notice that there might be some clientele who buy easier in a physical store. (too early maybe, a lot of money to ask the bank for.) So, you open an Amazon business account as well an Ebay account.
Congratulations! You made it!
Wait, don’t cheer yet. It is now when problems and hard work will begin.
While having a single sales channel was kind of doable to maintain the quantity synchronization, now you will need to do it for 3 of them.
What most small business owners do is they divide the products which will be sold on each of the sales channels.
Let’s say you have 100 items in total, then you divide them:
Amazon: 30.
Ebay: 30.
Own website: 40.
This strategy seems ok to maintain and synchronize, but is wrong.
While you are visiting a supplier to make some new deals, all stock is magically gone in one of the sales channels, more people are coming there to look for the product too. You are losing some great sales and this is bad.
So what is the best thing you can do? Simple, update all your sales channels with the same quantity.
Amazon: 100.
Ebay: 100.
Your website: 100.
Now you need to take extremely care of synchronization between your warehouse and all the sales channels. If it gets stuck for some reason, because you are still doing it manually, or your scripts fail because your backend system is badly done or it just happens, then you might do over-sales which need to be refunded.
The refund on itself is not good but not the end of the world. The worst will come when you see reviews on different websites blaming your company, and angry clients write mean words, fully showing their frustration to other potential customers.
Don’t worry you are not the first nor the last. The question is how to not experience it again?
Using a system or solution which allows you to synchronize all sales channels almost instantly when there is a change in your warehouse stock is your best bet.
How does synchronization work:
- Clients buy from your store.
- Order or webhook comes to your backend
- Quantity is changed for that inventory in your warehouse
- On warehouse quantity change, all your sale channels will be updated with new quantity
You can do the update for some sales channels instantly, but others like Amazon have a throttling system which you can’t overuse. In that case the update needs to be done on a specific time interval, for example every 10 minutes.
This is where ERP (Enterprise Resource Planning) systems come into play. They don’t only offer stock synchronization but a lot more, warehouse management, fulfillment, finance and pricing strategies for your products. By using a reliable and robust ERP service you can focus on what is most important, which is growing your business and getting your smile back.
For more about ERP, please read my other post. https://arensmyzyri.medium.com/how-can-we-decide-what-is-the-best-erp-system-for-our-business-9893486459b