Multichannel fulfilment explained

What are the benefits and challenges of multichannel fulfilment, and how can a WMS help? Find out in our industry guide.



These days, multichannel fulfilment is standard practice for online retailers.

The theory is simple. Businesses sell their products on multiple platforms. A seller of fine Persian rugs, for instance, might sell on their own website, eBay, Etsy and TikTok.

Behind the scenes, sellers can store items in a centralised inventory pool. The orders are then shipped, whether by a private warehouse or a third-party logistics (3PL) provider.

The main reason for the unstoppable rise of multichannel fulfilment is the fact that it creates more sales opportunities for businesses. Increasingly, customers shop all over the shop and are rarely faithful to a single seller.

It can also help prevent stockouts and overselling – but only when inventory is accurately tracked and synchronised across sales channels. Without good inventory visibility, selling across multiple platforms can actually increase the risk of stock mismatches.

Finally, multichannel fulfilment lets sellers leverage partners. They can focus on sales while handing fulfilment and warehouse management to a third party.

Multichannel fulfilment would, of course, be impossible without warehouses. So, it's no surprise that a warehouse management system (WMS) can play a key role in making it an effective and profitable approach.

But before we look at how a WMS can help, let's take a closer look at the approach itself. How exactly does it work?

How does multichannel fulfilment work?

Key to many multichannel fulfilment operations is the notion of centralised storage. Your inventory is kept in a warehouse, whether that's your own private warehouse or a shared space in a logistics provider's network of warehouses.

You advertise your wares on multiple storefronts. These are connected via application programming interfaces (APIs) or software plugins to your fulfilment operation.

When an item sells on one platform, inventory information can be updated across connected channels. This means you can sell in multiple locations without inventory confusion or letting customers down.

The rest is business as usual. The order is sent to the warehouse, and the item is picked, packed and shipped to the buyer.



What are the benefits of multichannel fulfilment?

There are three key benefits of multichannel fulfilment.

1. It lets you harness multiple sales channels

The first benefit of multichannel fulfilment is that it does what it says on the tin. It lets you run multiple sales channels with shared inventory.

So, rather than overseeing a sprawling and confusing network of platform-specific inventories, you get to deliver results – and goods – from a single stock.

This increase in inventory control means you can reduce the risk of overselling. Stock numbers can be automatically updated, giving you the visibility you need to give the customer what they need.

2. It can unlock cost savings

By reducing or eliminating overselling, you can save money that would otherwise be wasted on returns. Meanwhile, consolidating inventory may reduce the need to duplicate stock and storage space across different channels.

3. It's easy to scale

Last but not least, multichannel fulfilment is easy to scale. New sales channels can be added without necessarily needing to rent more warehouse space or hire more staff.

These three benefits all add up to one big benefit: customer satisfaction. By providing fast, reliable shipping across multiple sales channels, you give customers what they ask for and increase the chance they'll come back for more.

What are the challenges of multichannel fulfilment?

Multichannel fulfilment is a popular choice for a reason. That's not to say, however, that it doesn't bring with it some challenges of its own.

1. Compounding costs

The first challenge relates to fees. In some cases, fulfilling orders from external marketplaces can cost more than native platform shipping.

2. Inventory risks

While good inventory management can help prevent stockouts and overselling, this is only possible if you have comprehensive inventory visibility. Without this, you could face stock mismatches – and an angry customer at the other end of the process.

The same goes for general inventory control. With a cloud-based WMS, you can ensure your warehouse inventory is accurate and visible. Without it, you could be looking at a SKU jungle that needs to be constantly – and manually – updated.

3. Return issues

Returns, too, rely on inventory visibility. Without it, return paths can quickly get confusing. Processing returns from different sales channels can lead to difficulties with tracking and restocking and can make customers wait for their refunds to be processed.

By this point, it should be clear that technology and integration play a major role in overcoming the challenges of multichannel fulfilment. With a WMS in place, you can manage many of these challenges more effectively.

How can a WMS help with multichannel fulfilment?

The main way a WMS can help with multichannel fulfilment is by putting everything in one place.

A WMS gives you a centralised dashboard where all your warehouse inventory is visible and accessible, no matter how many locations it's spread across.

And with a cloud-based WMS, stock can be automatically updated as goods move through the warehouse. Every time a member of staff picks, packs or ships an item, its status is updated – whether through barcode scanning, pick-to-light systems or voice-picking headsets. Appropriate integrations can then pass updated inventory information back to connected sales channels.

This so-called "single source of truth" can help prevent overselling. You're no longer in a position where a customer can buy an item that's just sold out on another channel.

A WMS can help you streamline your picking and packing processes. You can use it to combine orders into batches and print custom packaging.

You can also integrate a WMS with voice-picking headsets. This can lead to near-perfect picking accuracy – a metric that will be felt by your customers first and foremost.

Shipping processes can be made more efficient and more cost-effective. Where supported by the relevant integrations, your WMS can help select an appropriate courier based on factors such as cost, speed and delivery requirements.

Finally, a WMS can generate real-time analytics. This gives you insights into speed, efficiency and channel-specific stats – all from a single centralised dashboard.

At Minster, we provide two highly capable cloud-based WMS solutions, both ideal for eCommerce and other forms of direct-to-customer fulfilment.

CORE, our entry-level system, provides an impressive set of features right out of the box and can be up and running in just 24 hours. EDGE, meanwhile, is an enterprise-grade system that can be extensively customised and integrated with support from our expert UK development team.



Want to see our eCommerce WMS software in action? Book a demo to learn how our solutions can help your multichannel fulfilment operation grow.