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6 Teams, 1 Problem: Stop Overselling With Interdepartmental Inventory Alignment
Overselling has massive impacts on all your internal teams. And every team can help decrease this risk with company-wide inventory visibility and control.
Inventory management is everything. There is not a corner of your day-to-day business it does not affect. There is not a department that doesn’t benefit when it is done well—or suffer when it’s done poorly. And that ladders up to the C-suite and out to the bottom line. If you don’t have a system that updates inventory in real time, as orders come in, you’re not just in danger of overselling—you’re likely to oversell. The burden naturally falls on your inventory/ops teams, who are the first to be blamed when OOS items are sold to customers, but this goes way beyond a singular department.
Overselling has massive impacts on all your internal teams. And every team can help decrease the risk of overselling—if your DTC brand has company-wide inventory visibility and control.
Production and Design
The inventory-production feedback loop is essential for every brand’s success. Even the most innovative products are only successful when customers actually purchase them at a rate you can properly predict and respond to. When a product is selling well, your design team can design deeper into those styles (more colors, patterns, materials), and production can secure more time/space with the factory. The opposite is also true: There’s no sense in designing more patterns or securing more factory time if the product isn’t selling. Do you know which scenario you’re dealing with? Your business may depend on that knowledge.
Overselling complicates the inventory-production relationship and can lead to overbuying future styles based on inflated sales you only think you have. This, of course, can mean those future styles sit at your warehouse, where they burn cash until you have to discount them deeply. Bye-bye profits. This also wastes the time your designers spent iterating on the additional styles they thought you needed. Plus, you may have paid for extra time at your factory you definitely did not need. Did you pay for expedited shipping to get the unneeded products to your warehouse faster? That’s a shame.
Merchandising and Ecommerce
Your home page is your storefront window. It’s where you showcase your best-sellers, new designs, etc. If your merchandising or e-comm teams highlight a product and successfully increase sales, you’d better have that product in stock. If you see the product is overselling, your team will want to take it off the home page and move it off any product or category pages.
But what if you don’t have this information? The product stays highlighted on your site, then the customers who weren’t able to buy the oversold product see it and wonder why an out-of-stock product is being promoted. This makes you look like an amateur. Plus, when you do have a chance to replace the oversold product, you may have a less strategic product on the homepage or highlighted throughout the site, because you didn’t have time to proactively plan for it.
At the most successful brands, ops and marketing are in lockstep. Marketing knows how much to promote, or how many levers to pull, based on the inventory position of any given product. Seasonal down jacket? Pull all the levers in a very condensed amount of time, with the goal of selling out quickly. Khakis or another “evergreen” product? Pull the levers consistently over time to keep the product in stock for your preferred sell-through period, so all customers have a chance to purchase it.
What happens when these teams aren’t in sync? Marketing over-promotes a product that ops didn’t buy in a large quantity, and you oversell. What’s that look like from the customer perspective? Think of all the marketing channels used for promotion: email, social media, ads, website, media outlets, etc. If all these channels promote a product that is out of stock, you look like an amateur again, and customers are unhappy.
You may have published a blog post dedicated to this product. Do you hide that post? What if you worked with a renowned writer/photographer/model? What will they think if you don’t promote it? What if they've already promoted the post with their 50K social media followers? You’ve lost tens of thousands of dollars in customer acquisition cost (CAC), your team’s and others’ time and effort, and your brand’s reputation.
Active and focused inventory management is worth every ounce of effort you put into it. Inventory management is where great brands succeed… or fail. Make sure you’re in the succeed category.
Overselling is your CX team’s worst nightmare. What's worse? Learning from your customers that the order they placed is still pending after two weeks, and having to tell them you can’t fulfill it after all? Or learning about it from your Ops and inventory team and waiting for a wave of angry emails to arrive in your inbox? Literally, they have bad dreams about this.
Poor inventory management affects your CX team profoundly. The barrage of angry customers is challenging to manage, even for the most level-headed and experienced support folks. If overselling continues, it degrades team morale faster than you might think. It’s also just a flat-out waste of time, energy, and money. Ten emails per day related to overselling, 20 minutes to respond to those emails, x 5 days, translates to 50 emails a week and nearly two hours per customer support person. Instead of responding to these requests, they could be improving your knowledge base, building a virtual sizing tool, or doing any number of proactive, growth-oriented tasks that affect all your customers, not just the angry ones.
C-Suite and Leadership
If you don’t have an accurate, to-the-minute sense of your actual inventory, how do you know what products to buy more deeply to build your brand? How do you know what product categories to expand into? How do you know if and when to scale your team?
The answer is data. Not just any data—reliable data. When your data is full of oversold products, refunds, and lost CAC, these strategic questions become impossible to answer and high-level decision-making is perilous. A product that may look like a home run is actually a dud once you realize it oversold by 50% and you lost all the customers that were interested in the product in the first place.
None of this sounds good, and it’s not how you want to run your business. Luckily, you don’t have to.
“With pinpoint visibility, unplanned overselling is now optional,” says Mike Averto, ChannelApe’s founder and CEO. “ChannelApe’s intraday inventory-management system lets you move inventory faster and at higher margins, with no nightmares for your teams and no issues for your customers. Our real-time inventory visibility tells you how much you can sell at any given moment. You never need to oversell again.”