Samiksha Hiwase | 6 Min Read | December 10 , 2020

Importance of Inventory Management in the Marketplace

1. Quick read

Does it so happen that clients abandon your eCommerce store since the item which they were searching for was shown to them in the product catalog but was instantly unavailable when they tried to order it? If the answer is yes, then there is a reasonable chance that you have been underestimating the criticality of efficient inventory management for your business in the marketplace.
In the eCommerce business, inventory management matters a great deal. It is basic for online commercial enterprises to keep adequate stock of all the offered SKUs as per the customer demands. Inventory management helps monitor your stock and empowers you to appropriately handle stock levels to keep customers updated on product availability.

2. Inventory Management Process

Research suggests that over 75% of online customers order their products elsewhere if they are unavailable in your store, instead of waiting for them to become available with you. The right inventory management techniques can ensure that you have the ideal number of items that you mean to sell without running out of stock frequently.

Single Source Inventory

In single-source stock, the shippers have a single area (stockroom/warehouse) that handles stock and fulfills the orders from that region. Commonly, service providers who have a single-source warehouse still prefer multiple offline sites (or dealer channels) selling items from a similar catalog, inventory, and area.
For instance, you have one site or a multisite execution with websites for the United States, Germany, France, and Brazil, all pulling merchandise from one giant warehouse. This single-source deals with all stock quantities, shipments, and returns regardless of which sales channel gets the order.

Multi-Source Inventory

Contrarily, Multi-Source Inventory (MSI) is an option where multiple stock points service either different geographies or different ordering channels. MSI has come into its own with the latest release of the Magento 2.3 version. Using MSI, sellers can deal with a specific product from various sources or areas.
Requirements for MSI?
The Multi-Source Inventory (MSI) feature is designed to empower stock management in more than one place so traders can precisely reflect their actual stock in Magento without the need for multiple extensions or customization.
As of recently, multi-stock was conceivable using outsider/ third party modules. This turned out to be a challenging task in making accessible solutions that were compatible with both the core Magento modules and the different third-party modules.
With the introduction of the MSI feature in Magento 2.3, a dependable element of multi-sourcing capability has been added. This gives the opportunity to the dealer to engage with various sources and manage stock for each distribution warehouse.

3. Bulk Inventory Management

Assume you are the owner of an internet shopping website having a great many products. Presently you need to refresh all the products or to add another thousand items to the store. You need to manually add or update the items on the store individually, which is close to impossible, especially if we are dealing with web stores where time is critical.
As shown in one of our other articles on product uploading, you can refresh or update your product parameters and stock data in bulk by utilizing CSV/XML/XLS documents. This saves valuable time as against adding the merchandise manually. This, in turn, allows the storekeeper to concentrate more on their regular business rather than record-keeping and updating.
Internet business platforms like Magento, Magento 2, Opencart, Prestashop, WooCommerce have now introduced mass transfer modules for adding products in bulk and to update their stock levels as well. The import and export of items can be completed through CSV/XML/XLS.
The quantities of each of the items can be updated with a single CSV/XML/XLS records transfer, regardless of the various sources of the inventory. Thus the mass transfer extension helps in saving the time and work of adding each product manually. The administrator can likewise add the products for the vendor from the back-end.

4. Inventory Management in Magento 2

Let’s take a look at how inventory management happens in the Magento 2 module when a customer buys a product.
The various dealers who have allocated inventories of the item to themselves can add the various stock quantities for the product apart from the primary stock for the item. For this let us see a practical model.
For example, there’s a product known as “Digital Camera,” from Admin which is assigned to three special dealers – Peter Doe (80.00 USD and quantity as 97), Neel Doe (85.00 USD and quantity as 98) and John Doe (95.00 USD and amount as 995). Further, the additional quantity available with the admin is 1017 as you can see in the following screenshot:
There is a list of merchants who are selling a similar product with various costs and allotted quantities. Presently if we summarize all the quantities including that with the administrator and with the individual dealers, the total comes to 2207. Let us see what happens to the individual and complete inventory for the item if a user buys the product.
Here on the front-end, you can see the primary product with a cost that is allocated to the item by the various merchants.
Now, if a client submits an order for seven products. Let us see what happens to the individual stock of the administrator as we have made the order for the main item. Hence you can observe that the inventory quantity is changed for example previously it was 1017, and now it is 1010.
Similarly, the complete quantity of stock items is modified from 2207 to 2200. Likewise, if the quantity with any dealer prior to the transaction would have been 0, then the front-end of that merchant would display unavailable/out of stock status. At this point, the inventory module sends the notification to the customer when that particular product is available in stock so that customer can order that product.

5. How to manage inventory on your store with the online marketplace?

The merchant can list his products on numerous web-based business sites. However, handling item inventories on both ends is a difficult task. This can be simplified by using APIs. For example, using the eBay and Amazon connectors, the administrator can combine the inventories available with a particular dealer on his eBay and Amazon stores.
Whenever an item is sold on eBay or Amazon, the stock will be reduced from the Magento store. Aside from stock, if the administrator updates the matched up product data toward one end, it gets automatically refreshed at the other end. Based on the preferred activities selected through the admin end, continuous sync happens among the various stores and channels with the help of API.
All this synchronization of stock, merchandise, and orders between different stores is set up through the collaboration between eBay/Amazon APIs and the connector.

6. Information about various sellers selling similar products in the marketplace

Normally, various vendors sell the same or similar products on various online stores at different price points. Users select the best deal for their buy. Dealers should be updated with respect to the inventories for that specific product in real-time. For this, there is an extension available to merchants that can synchronize the stock availability data across different eCommerce platforms like Magento, PrestaShop, Opencart, WooCommerce, etc.

Inventory management in case of product returns

Product returns are inevitable in online business. At any stage of the ordering and shipping process, or even after the item has reached the customer, there are chances of the order getting canceled or the product being returned by the customer. Managing the inventories in this dynamic situation is a challenge. Apart from handling the user’s refund, the stock updation in such cases is also essential. There are various RMA modules for a different eCommerce site that facilitate a smooth return and refund procedure. Regardless of whether the product has been sold through Magento, Magento 2, Prestashop, Joomla, CS-Cart, WooCommerce, or Opencart, when the client creates an RMA demand from the front-end, at the administrator end, the administrator should be able to add the returned product to the store stock once the return cycle is completed. In Opencart, the administrator can change the stock with a single click.

7. Wrapping up

This all about importance of the inventory management in the online marketplace. So further you have to decide whether you can go with single-source inventory or multiple source inventory management and still if you have any queries you can contact our team to run your inventory management system smoothly.

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