I’m not a fortune teller, but I know when a growing business is heading for sales channel trouble before it even adds another one to the mix. My foresight isn’t magic. It’s years of honing my ability to recognize patterns.
For over 20 years, I’ve helped hundreds of businesses open their eyes to these patterns (or recurring signals) while showing them how to proactively assess whether the pattern could lead to potential problems.
It’s not as easy as it sounds. While some patterns are in-your-face clear, there are some that go the more subtle route.
Regardless of how difficult it can be to detect them, patterns are important, and one pattern I’ve seen over and over is multichannel e-commerce businesses blaming their multichannel failures on an innocent party: their tech stack.
Technology often gets a bad rap, and sometimes it’s well-deserved. But sometimes, it’s not a tech problem at all. It’s a sequencing problem.
In other words, businesses are adding new sales channels before they’re ready. It’s putting the cart before the horse and then wondering why the channel isn’t performing at peak level (or at any level, for that matter).
Sequencing problems are more common than you’d think. One of the biggest clues is watching as a client struggles with SKUs that don’t match on their existing channels. The same product is named two different things on two different channels. You don’t have to be a rocket scientist to know that the data is going to be messy.
Another clue? Already selling on a channel, say Amazon, and the inventory numbers don’t match what’s in their inventory management solution (IMS), say Cin7. That inconsistency is a red flag of terror.
Now, take these issues and apply them to businesses that are seeking to grow. Growth to them looks like adding a new channel that delivers on their expectations. Then, when it does, they realize they’ve added weight to their already overstressed operation. Yes, they’re selling products, but everything is exploding in different directions. The things that were tolerable before the addition become an absolute nightmare.
It’s like driving a car that’s shaking and the steering wheel is shaking, but driving faster isn’t an option, leaving you scared and overwhelmed.
What happened?
They got the order of operations wrong from the start.
They added a channel but didn’t realize they hadn’t properly prepared for it, leading to issues they didn’t expect. Like a reconciliation gap. After discovering it, they patched the gap manually, calling it temporary, then watched as it became permanent.
The fallout for creating a manual workaround that sticks around when automation fails is painful. Inventory numbers disagree across platforms. Lazy manual adjustments (e.g., “Do we still manually adjust inventory when we sell a case pack?”) leads to “stock outs” when they actually have the inventory. Same thing happens if or when someone forgets to make the adjustments at all. And fulfillment routing falters when volume doubles.
Unfortunately, many businesses only discover these problems when customers begin to complain. Not just one customer. Multiple.
This is when you’re (excuse my French) screwed.
An ounce of prevention is better than a metric ton of cure, as they say, and following the proper sequence from the start should be the single-minded mission of multichannel businesses. What is that sequence? Making sure the tech foundation can handle expansion before moving forward. When they do, their return on investment is astronomical, like it was for Changing Habits.
Changing Habits initially operated on Unleashed and WooCommerce, systems that just aren’t built to handle an e-commerce operation doing over 1,000 transactions a month with sights set on growth. As a result, the team suffered from inventory valuations their own accountants didn’t trust, no real purchase order workflow, and stockouts from bad inventory data.
Seeing the problem clearly, implementation partner Rob King of Integration Kings advised Changing Habits to fix its foundation. In this case, and on the advice of Rob, they decided to implement a new solution: Cin7. For them, replacing solutions not designed for their needs to one that is, has helped the e-commerce business achieve explosive success.
But what about those businesses that don’t need a brand new tech stack but still get the sequence wrong? There’s good news for them too: it’s never too late to fix sequencing problems.
It boils down to planning and aligning the front end (and doing so with expert help). These two things can help them get out of a bad expansion.
More specifically, businesses should:
Match SKUs across platforms (e.g., Amazon can change SKUs but requires finding the right contact)
Replace manual workarounds
Ensure clean data in their IMS and sales channels
Connect every system together properly
Foundation first. Channel second.
It’s natural to want to blame technology for bad decisions. That doesn’t mean it’s right.
The truth is, multichannel e-commerce businesses can start fresh by completely switching their technology foundation. But in the end, the challenges that come with adding sales channels are not always brought by tech issues (the tech stack usually can handle it).
It’s usually the decision to expand before the foundation is ready.
How can businesses know if their foundation is ready? Experts like Four13 and Integration Kings can help. As Cin7 partners, we understand both the merits of a strong multichannel order management system and the proper operational order for delivering multichannel success.