Multichannel inventory management

Multichannel inventory management is keeping one count of a stock that is sold in many places at once, so that an item sold in one place disappears from all the others at that moment. The stock may be hotel rooms, bus seats, flight seats or shirts in a warehouse. Each place where it is sold, such as the business's own website, a travel site, a marketplace or a shop counter, is called a channel. The danger is selling the same item twice. Two people book the last room on two different sites in the same second, and one of them arrives to find no room.

Here is how it works in general. The business keeps the true count in one central system. Each channel shows what that system says is available. When a sale happens on any channel, that channel informs the central system at once. The system lowers the count, and then sends the new count to every other channel. When the count reaches zero, the item is closed on every channel. A cancellation or a return does the reverse: the count goes up, and the item opens again everywhere.

The hard part is time. An update takes a few seconds to reach every channel, and in those seconds two buyers can still choose the same item. So many systems hold an item for a buyer for a few minutes while they pay, and release it if they do not. Many businesses also keep a small buffer: they show slightly fewer items than they have, so that a late update does not cause a double sale.

Take, for example, a beach hotel that sells rooms on its own website and on a dozen travel sites. Its channel manager closes the last room on every site the moment one site sells it.

Consider online bus ticketing. A bus operator sells the same 40 seats at its own counter, through agents and on several apps, and the seat map on each of them must show a sold seat as taken.

For instance, a clothing brand sells on its website, in its stores and on two marketplaces. Its order management system keeps one stock count for all of them, so the last medium-size shirt is not sold on two apps. Airlines do the same through a global distribution system, which carries their seats to every travel site.

How is multichannel inventory management different from unified commerce? Multichannel inventory management keeps the count right, wherever the item is sold. Unified commerce goes further: the orders, the customers and the delivery are in one system too, so that any store can ship an online order. Some businesses also sell more than they have, on purpose. An airline may overbook a flight, because it expects a few passengers not to turn up. That is a deliberate decision, not a failure to keep the count.