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"This is why I chose ChannelApe, because I was looking for a partner, not just a vendor."

Benny Joseph

Allbirds

Benny Joseph

Inventory Management

5 Questions You Need to Ask About Your Brand’s Operations

Ask these 5 questions about the health of your operations. If you answer Yes to any of them, you need to rethink your inventory management and reporting.


“If you can’t measure it, you can’t manage it.” Sure, it’s among the most overused quotes in business, but let’s be honest: Peter Drucker knows things. If you’re not measuring what’s happening in your brand’s inventory, you can’t make informed decisions.

You can’t adjust or pivot or fix anything that isn’t going the way you want it to go. And you can’t plan for the future in a way that is going to make your brand grow instead of go.

Do you have the measurements you need? Ask yourself the following 5 worrisome questions about your operations. If you answer Yes to any of them, you need to rethink your inventory management and start running some reports.

1. Do you have excess inventory in your warehouse?

Of course, you want to be selling through products at a good clip, and if you’re not, it might be an indication a product isn’t as popular as you’d thought or as it once was. Or, you are in the middle of a major market disruption (e.g., pandemic, recession).

Right now, ecommerce brands are sitting on twice the amount of recommended dead stock. A whopping 30%, according to Industrial Distribution.

What if you had an aging inventory report you could customize for how long you consider too long for inventory to sit at your warehouse? Want to know what inventory is left over after four months? Six months? Easy with ChannelApe. Use that information to decide how to incentivize sales at a faster rate. And use that information to adjust the amount you’re buying from your manufacturer, so you can earmark the money you save for other things.

This can be extra important for newer ecommerce companies that double down on inventory during their initial extreme-growth phase. That works—until it doesn’t, and you’re left with dead stock in your warehouse. Wouldn’t it be nice to know that ahead of time? Any brand dealing with economic uncertainty—which would be every brand right now—needs the most accurate information to manage inventory and keep a handle on cash flow.

Here's a sub-question for you: Are you falling into a pattern of launch > merchandise > re-merchandise > discount? Newness tends to sell, so if you’re launching a new product and you merchandise heavily on your homepage, chances are good that eyes are going to get to it one way or another. But if it doesn’t sell as you’d anticipated, you might try merchandising it differently. Maybe move it up on more pages. If that still doesn’t incentivize more sales, you keep trying new things. Over and over. Then it’s still in the warehouse, and it’s time to discount. 

ChannelApe's Business Intelligence tool will help you discern how a product is aging—according to your own criteria—and let you get ahead of it. You’ll know when to try something new and, just as importantly, you’ll know to order fewer units next time. You won’t have to keep doing trial and error to get actionable information, because you’ll have it at every step of the way.

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2. Do you oversell?

Overselling can be crippling for your brand. How many more chances do you think you’ll get with a customer who never receives the product they were so excited to have bought? You’ve paid the high cost of customer acquisition, so do you really want to lose them because you sold them a product you didn’t have? To ensure this doesn’t happen, you need to know your ATP (available to promise) at the exact moment a customer orders your product.

We surveyed over 600 consumers and found that 70% of them will never return to a brand that had to cancel their order due to it being out of stock.

With ChannelApe, ATP is not a projection, it’s an actual promise, because the platform reports your current inventory in real time, not at the end of yesterday. You can see how many units you have in a particular warehouse at a given time. Both you and your customer will know if an item is unavailable before they buy it. A little disappointment is way better than a lot.

In addition to helping you avoid overselling, ChannelApe allows you to make merchandising decisions on how hard to promote—or not to promote—your products. The reporting helps you know how many more units you should order in the future to fulfill customer demand. In short, it tells you what you need to know to run your brand better. 

3. Is your return rate above the industry standard 5–15%? 

While they may not rise to the level of overselling, return rates are a really big deal. Do you know your average return rate? How about your return rate per product category? Do your customers return shirts at twice the rate of pants?

If you don’t know, you need a reporting tool that tells you. Not only will ChannelApe’s Business Intelligence tool give you the number, but they can alert you in your returns report if it’s too high. Then you can go to your other departments to figure out a reduction plan. Ask your customer support team what they’ve heard about the product. Ask the production and design team whether there was a fit issue you should alert customers to on your website. ChannelApe enables you to fix the product or category that’s returning at a higher rate, so you’ll save customers and yourself the time and hassle of returning—plus you won’t have to pay shipping and other costs associated with more returns.

4. Do you sell out of evergreen products before replenishments arrive?

Sell-through rates, inventory velocity, historical sales data: With all that information at your fingertips, a brand knows when to order more units of evergreen products. A low-inventory report gives you that information well before you sell out, so you can order additional units in plenty of time.

With ChannelApe, you can even set an inventory threshold report. Let’s say your lead time for manufacturing, based on fabric, trim, materials, and factory schedules, is 10 weeks. You might set a threshold for ChannelApe to notify you of when you have 10 weeks of on-hand inventory based on the sell-through rate, which would be your indication to reorder. By the time those 10 weeks are up, your replenishment order is arriving, so there’s no discernible gap in inventory.

5. Do you spend all day wondering where units went?

There’s not an inventory manager alive who doesn’t do this. “We had 20 units, and now we have five. The sales data doesn’t show 15 sold units. Where did those go?” Then you run around asking various departments if they know. It turns out the customer support team sent out some number of units. They had unhappy customers who were sent a new product to appease them. Or maybe the wholesale team sent a client some extra sizes when they sold out. 

With ChannelApe, the wondering and the running around stops. You can always see where inventory was taken and allocated. You can also reserve inventory for the wholesale team or some number of units for customer-related issues, so you aren’t surprised.

The Answer? Reporting.

There’s a better answer to all these questions. Here it is: reporting. That’s how you get the measurements you need to effectively manage your brand and make Peter Drucker proud. Whatever you want or need to know as a brand, you can either find a report already built into ChannelApe, or you can ask us to build one—seriously, you can. 

“If you don’t have an accurate, to-the-minute sense of your actual inventory, how can you scale?” asks Mike Averto, ChannelApe’s founder and CEO. “ChannelApe business intelligence gives you a view of your entire operation. From raw materials to finished goods and all the way through to fulfillment and reverse logistics, ChannelApe’s native BI tools provide unprecedented visibility and reporting so you can focus on growing.”

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