Inventory Forecasting for Multiple Sales Channels [2024]

How to predict stock needs and avoid stockouts when selling across platforms
by Raoul
Sep 28, 2024 6 min read
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Look, I’m not going to sugarcoat it - managing inventory across multiple e-commerce channels is about as easy as herding cats. But after a decade of late nights, close calls, and yes, a few epic fails, I’ve learned a thing or two about keeping stock levels just right. So grab a kopi (or whatever fuels your entrepreneurial fire), and let’s dive into the wonderful world of multichannel inventory forecasting.

Table of Contents

  1. The Multichannel Mayhem
  2. Data: Your New Best Friend
  3. Tech Tools: From Headache to Helpmeet
  4. The Seasonality Rollercoaster
  5. Safety Stock: Walking the Tightrope
  6. Putting Theory into Practice
  7. Parting Thoughts
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The Multichannel Mayhem

Picture this: It’s 2016, and we’ve just expanded from out traditional B2B business to some new online channels, Lazada & Qoo10. We were feeling pretty excited about it as an additional revenue stream, until we had a surge of demand from both online and offline channels. Suddenly, I’m selling out on Lazada while my B2B customers were complaining about lack of stock availability. Cue frantic supplier calls and a few sleepless nights.

That’s when I realized - each platform isn’t just a different storefront, it’s a whole different beast. Shopee’s flash deals, Lazada’s LazMalls, TikTok Shop’s livestream madness - they all create unique demand patterns. And let’s not even get started on how different demographics gravitate to different platforms. (Did you know the average TikTok Shop buyer is about a decade younger than your typical Lazada shopper? Learned that one the hard way.)

Data: Your New Best Friend

Now, you might not naturally be a numbers person. But in this game, data is king. Here’s what I’ve learned to track:

  1. Historical sales data: Obvious, right? But dig deeper. Don’t just look at total sales. Break it down by SKU, brand, category, by platform, even by time of day. You’d be surprised at the patterns you’ll find.

  2. Lead times: And I don’t just mean supplier lead times. Track how long it takes from when you place an order to when it’s actually ready to sell. That includes quality checks, photography, listing creation - the works.

  3. Cancellation and return rates: These can vary wildly between platforms and products. Ignoring them is like trying to drive with one eye closed.

  4. Platform-specific metrics: Shopee’s Preferred Seller status, Lazada’s search ranking algorithm, TikTok Shop’s livestream performance - they all affect your sales in ways you might not expect.

  5. External factors: CNY, GSS, 11.11 - sure. But also watch out for things like haze seasons (air purifier sales go crazy) or major sporting events like Olympics or the World Cup (team jerseys, anyone?).

Pro tip: Set aside time each week to review this data. I do it every Monday morning with my coffee - it sets the tone for the week.

Tech Tools: From Headache to Helpmeet

Look, spreadsheets are great. I learned and wrote formulas that would make an Excel guru weep. But as my business grew, so did my headaches. These days, I rely on a suite of tools that keep me sane:

  1. Inventory management software: We built OneCart (or at least, the early version of it) for our business, and it was a game-changer. It gives me a bird’s-eye view of stock across all platforms, which is crucial when you’re running flash sales on multiple channels.

  2. Forecasting algorithms: Look, AI isn’t perfect. It once told me to stock up for Black Friday / Cyber Monday when it wasn’t a thing yet in Singapore, while ignoring 11.11 (facepalm). But when used right, it can spot trends you might miss.

  3. Real-time alerts: Nothing worse than finding out you’re out of stock after angry customer messages start rolling in. Set up alerts and save yourself the headache.

Remember, tools are meant to help, not replace your judgment. Rely too heavily on an algorithm and you might up with a warehouse full of fidget spinners long after the trend has died off. Trust the tech, but always apply your own knowledge of the market.

The Seasonality Rollercoaster

Ah, seasonality. It’s not just about Christmas and Chinese New Year anymore. Here are some quirky patterns I’ve noticed across our anonymised data:

  • Durian season hits, and suddenly kitchen appliance sales go through the roof. Apparently, everyone needs a new freezer for their Mao Shan Wang.
  • Confinement herbs have spiked this year - more Dragon babies maybe?
  • Weirdly specific, but sales of screen protectors spike every time a new iPhone is released - even though the new models aren’t even compatible. FOMO is real, folks.

Create your own “trend calendar”. Mine looks like a conspiracy theorist’s notebook, with everything from typical holidays to obscure social media trends marked out.

Safety Stock: Walking the Tightrope

Ah, safety stock. The inventory equivalent of an insurance policy - necessary, but man, does it tie up capital. Here’s my rule of thumb:

Safety Stock = (Max daily sales × Max lead time) - (Average daily sales × Average lead time)

But here’s the kicker - this is just a starting point. Adjust based on:

  • How critical the item is (runcify your fast movers)
  • Supplier reliability (got burned by this during the pandemic)
  • Sales predictability (seasonal items need more buffer)

And for heaven’s sake, review these levels regularly. I once set and forgot my safety stock levels, only to realize I was sitting on a mountain of unsold phone cases for a model that was two generations old. Not my finest moment.

Putting Theory into Practice

Alright, let’s get down to brass tacks. Here’s my weekly routine:

  1. Monday: Data review with my coffee. Check stock levels, review last week’s performance.
  2. Tuesday: Supplier check-ins. Any delays or issues I need to know about?
  3. Wednesday: Mid-week performance check. Any unexpected trends?
  4. Thursday: Planning for upcoming campaigns and sales.
  5. Friday: Review and adjust safety stock levels.

It sounds like a lot, but trust me, it beats the alternative. I’ve been the guy frantically messaging suppliers at 2 AM because I didn’t plan ahead. Learn from my mistakes, folks.

Parting Thoughts

Look, mastering inventory forecasting across multiple channels isn’t going to happen overnight. It’s a constant learning process. I’ve been at this for years and I still get surprised sometimes. (Like when a random TikTok trend caused a run on my stock of green tea Kit Kats. Who could’ve predicted that?)

The key is to stay flexible, keep learning, and don’t be too hard on yourself when things go sideways. Because they will, trust me.

Remember, the goal isn’t perfection. It’s about finding that sweet spot where you’re maximizing sales without drowning in excess stock. And hey, if you’re feeling overwhelmed, don’t be afraid to reach out for help. Whether it’s chatting with fellow sellers or trying out tools like OneCart, we’re all in this crazy e-commerce journey together.

Here’s to your success, and may your stock levels always be just right! 🥂

Ready to tame the inventory beast? Give OneCart a spin - your future self will thank you!