(This post was originally published on April 15, 2014. We’ve updated it for accuracy and completeness.)
When you sell one or two items around the house on eBay, inventory management isn’t an issue. You have one designer purse to sell. You list it. Now, you have no designer purses to sell.
But, if you’re using eBay as a sales channel for your business, managing inventory can get a lot more complicated.
In this post, we’ll dive into what those complexities are and how you can overcome them.
eBay Inventory Management Challenges
Selling on eBay presents some unique inventory management challenges, including the following:
eBay can hold your money.
If a customer files a claim (legitimate or not) about their transaction with you, eBay can hold the customer’s money, pending investigation. This means you may not have the cash to pay a supplier for new inventory or to operate other parts of your business.
You can’t shut your business down, because you don’t have to cash to acquire inventory. Remember, cash is king.
Mismanaged inventory has bigger implications on eBay.
Sometimes you sell an item you don’t have in stock. It happens. (It doesn’t have to). Then, you have to to explain to your customer that they’ll either be refunded or they’ll have to wait for the item to come back in stock.
On your webstore, this scenario isn’t ideal, but it’s relatively isolated. You may upset the customer. You may lose the customer. They may leave a nasty review on your site or someone else’s. But, their disappointment doesn’t really impact your webstore’s ability to sell in the future.
If this unhappy customer came from eBay, the damage is more lasting. eBay has always focused on seller integrity by taking ratings seriously. Even a few negative ratings can get you flagged and can cause you to lose your “top seller” rating. Again, eBay hold on to your money.
Margins can fluctuate.
If you’re selling on eBay, it may not always be for a static price. (It is an auction site after all.) Even if you sell at fixed prices, you may need to adjust them periodically to be competitive.
It means your margins can fluctuate, so you need to watch the cost of your inventory a bit closer.
What if you sell on more than just eBay?
Selling on eBay alone can be challenging enough. What if you also sell on your own webstore? Or Amazon? Or Etsy?
Now, you’ve got to manage multiple sales channels. You’ve got deal with different rules and product data requirements for each. You’ve got sales at different prices, for different quantities, from different places eating into your inventory.
This increases your risk of selling something you don’t have in stock.
Overcoming Inventory Management Challenges
Fortunately, there are some strategies you can use to overcome some of the inventory management challenges that eBay presents.
eBay Listing Software
Turbo Lister gives you the ability to manage your eBay listings more efficiently. It’s more about listing than it is managing the transaction of a sale. But, making this part of you business easier will free you up to manage inventory more effectively. And, Turbo Lister is free!
SixBit starts at $20/month, but gives you a more feature-rich eBay management experience. It actually helps you manage your inventory, shipping, and customer communication.
If you are strictly an eBay seller, these tools may be enough. But, what if you’re bigger than just eBay?
eBay’s Large Merchant Services API
eBay describes their Large Merchant Services API as:
eBay’s Large Merchant Services make it possible for a Seller’s application to send very large amounts of inventory to the eBay site, and to download single and multiple line item order information. These services have been designed to make a large merchant’s workflow more efficient by leveraging eBay infrastructure to use parallel execution and to automatically retry on errors.
In layman’s terms, eBay provides an interface that allows you to integrate your own technologies with eBay. You can build eBay into your platform.
Using the API, you could integrate your eBay listing information into your customer and supply chain management systems (probably an ERP). With integrated data you can set manual and programmed business rules about how to handle inventory issues. For example: don’t list an item that you won’t have in stock for two weeks.
You need to have the resources, technical competency, and reason to invest that much money into this integration. It’s probably only a realistic option for big companies–think “big box” retailers. Most smaller and even mid-sized retailers, won’t see a return on their investment into this integration.
You shouldn’t be surprised that the Multichannel Insights blog would suggest this option…
The middle ground between one-off listing tools and fully-custom integration is to use a multichannel integration solution. (Full disclosure, this is what nChannel sells.) This solution allows you to leverage a digital integration with eBay, without limiting you to eBay or requiring you to build it from the ground up.
A strong multichannel integration solution should integrate with your webstore, all of your marketplace accounts, your ERP, and your POS system. It behaves as the core of your technology platform, keeping everything in sync.
Specifically, it keeps your inventory in sync. That way you don’t sell items you don’t have. It also gives you the ability to do things like fulfilling eBay sales from in-store stock. Imagine trying that if you’re managing eBay listings manually!
What To Do Next
Your next steps really depend on your situation. If you’re a very small seller or hobbyist trying to sell on eBay for some extra cash, checkout the listing software options.
But, if you’re a retailer who wants to grow–who needs to manage inventory across more than one channel–check out our multichannel inventory management solution. We provide connectors for eBay, Amazon, the top eCommerce platforms, ERPs, and POS systems.