Five Best Practices for Multichannel Fulfillment

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Five Best Practices for Multichannel Fulfillment

By Derek O’Carroll, CEO, Brightpearl - 08/01/2017

Running a fashion and apparel business requires managing an array of complex processes. Ordering and receiving. Pricing and invoicing. Selling and tracking. Shipping and servicing. The list goes on.

When you begin selling on new channels, particularly online marketplaces, the complexities of each process become exponentially trickier, so it’s important to simplify each step.

Here are five best practices that streamline accounting, inventory and fulfillment so that your team isn’t stretched and customers have a consistent experience when it comes to knowing their order shipping status.

1) Embrace SKUs for common reference

Product management across multiple sales channels can be dizzying. You’re likely to offer a different subset of items (and possibly patterns or sizes) on each channel, and each channel runs its own software. The only way to connect the differences is with stock keeping units (SKUs), which serve as unique identifiers for the products you sell, giving a common point of reference for each across all channels.

2) Tailor prices by channel

A benefit and challenge of selling on multiple channels, from your catalog/call center to Amazon, is that you’re selling to different audiences with different price sensitivities. Therefore, your prices may need to be different from channel to channel. Amazon and eBay shoppers are especially price sensitive, so even $0.50 can make a difference, whereas your in-store or wholesale customers may be willing to pay slightly more.

There are two ways to manage pricing. Some systems include “built-in” automated price management, which is particularly useful for channels with price-sensitive shoppers where you are likely to make changes more often. If your system doesn’t include automated repricing, you can take an “outside price management” approach and deactivate price management for that channel, delegating responsibility to a separate price management system.

3) Set up taxes correctly

Each channel handles taxation a little differently. Make sure everything is set up properly at the sales channel level. Just enter tax-exclusive (net) prices, and then add tax based on country-specific rules. In the U.S., tax is chargeable based on where you and your customer are located as long as the product is taxable. Eight states fully or partially exempt clothing in general. Clothing is fully exempt in MN, NJ, NY, PA and VT – then three states put a certain cap on exempting clothing sales tax. The site www.taxfoundation.org outlines clothing exemptions.

4) Get to real-time inventory updates

Double-selling becomes a greater risk when you trade on more than one sales channel. There are two ways to avoid selling a product on one channel while a sale is being processed on another channel. With pre-allocation, you reserve a percentage of your inventory from each channel as a pad against double-selling. While this ensures you don’t disappoint a customer, it removes unsold products from inventory, so you can’t sell them. You can also use quick synchronization, which updates your inventory ASAP post sale. This keeps all inventory available, but leaves a small risk of double-selling since no system can update all channels instantaneously.

5) Simplify e-commerce and accounting with a “hub”

When you venture into new sales channels, your e-commerce and accounting software may need help managing the workload with a multichannel management system or “hub” to handle the complexities of fulfillment across channels.

When you pull sales from your e-commerce system (and others) into the hub where back-office processes like order processing, inventory management and customer service can be handled efficiently, you leave your e-commerce system to do what it does best: sales. A hub also provides more purchasing, order processing, and inventory management power. It sends consistent, branded invoices and communications, even if using different trade names on each channel, and it supports multiple levels of permissions so your whole team can work in the same system.

Getting multichannel retail right can fuel big revenue and profit growth. These best-practice steps, among others, help flag and address the differences between channels without stretching your internal team - so you can get it right from the start.

 

Derek O’Carroll is CEO of Brightpearl, leading retail management system, which helps retailers automate back-office functions and become more efficient.


 

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