In these times of supply chain disruptions, online sellers are looking for ways to mitigate the delays caused by the scarcity of raw materials, labor, drivers and warehouse space. One option sellers have in an effort to appease impatient buyers is to shave time off the fulfillment of products they have in inventory by partnering with a 3rd party logistics provider (3PL).
A recent survey conducted with over 4,000 businesses found that product sellers who use 3rd party logistics providers (3PLs) to manage their warehouse network are 30% more likely to improve their profitability. Why take on the HR burden of extra employees and processes to oversee?
A reputable 3PL allows sellers to manage the geographic distribution of their products and the fulfillment operations within their warehouses.
Successful businesses are responding to the rapid developments in retail and online selling by investing in robust inventory management systems (IMS) to further streamline order management and fulfillment. Speeding product turn increases the bottom line and makes up for time lost due to supply chain disruptions. Companies that continue to rely on patching legacy, on-premises inventory systems or that rely on manual processes will lose out to more modern competitors.
Businesses would be wise to assess their current inventory and order management software solution to determine if it integrates with 3PL providers and increases product turn by shaving time off restocking, order management and fulfillment. A cloud-based IMS improves information flow, speeds the flow of physical products and introduces multiple process automation efficiencies.
Sellers can also increase the number of opportunities for buyers to find the products they’re shopping for by expanding their number of sales channels. The right IMS allows for seamless integration of multichannel sales operations.
The same survey referenced above found that in 2020 when 28% of single channel retailers experienced more than a 5% decline in revenue, 6% of multichannel product sellers achieved a more than
20% increase in sales and 23% enjoyed more than 10% growth.
The primary difference between the businesses that grew during the pandemic and the ones who suffered was the number of sales channels the winners chose to integrate with. Multiple sales channels broaden the available customer base that these successful businesses are able to sell to.
Let’s review the types of sales channels necessary to run a modern, profitable sales operation with the broadest possible market presence. Keep in mind that some IMS providers charge per sales channel connection while others include them as part of an affordable monthly subscription fee.
Successful online retailers who sell directly to consumers know that the more ecommerce channels they integrate, the more buyers they’ll reach and the faster their businesses will grow. These companies benefit most from an inventory management system that includes connections and costs to integrate multiple channels like Shopify Plus, WooCommerce, Magento and BigCommerce.
As with ecommerce channels, the same holds true for connecting to multiple online marketplaces. IMS Solutions that include connections to online marketplaces like the complete Amazon selling suite, Etsy, Walmart and Ebay help retailers to gain significant market share and rapid sales growth.
For successful online sellers who supply major retailers like Walmart, Macy’s, Bloomingdale’s and Target, an inventory management solution with built in electronic data interchange (EDI) is the key to automated order fulfillment. When EDI connections are built-in and included in the monthly cost of an IMS, major retailers replenish their stock by sending electronic POs that flow straight through to the seller’s order management system eliminating human error and delays associated with manual processes.
Finding an IMS that also offers a built-in POS solution for brick-and-mortar and connections to 3rd party POS systems is ideal for the sellers who rely on traditional retail. A robust IMS will allow for the transfer of inventory wherever it’s needed – to other geographic locations, including stores.
Innovative companies that leverage these supply chain strategies will continue to mitigate the effects of the current disruptions through 2023 and on into the future. Key to their success will be the adoption of a robust inventory and order management system that creates a coordinated ecosystem that serves their multichannel goals.
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