Handling Inventory When Changing Business Models

Introduction

When a business decides to change its business model – from traditional retail to e-commerce, from wholesale to retail, or expanding to omnichannel – one of the biggest challenges is inventory management. The amount of backlogged inventory, synchronizing inventory across channels, and avoiding overselling are issues every business faces.

Based on practical experience, the lack of a centralized inventory management system can increase conversion costs by 20-30%, while also causing many operational errors. This article will guide you on how to scientifically handle inventory when changing models, and introduce GTG CRM's Product & Inventory Management solution to optimize this process.

Challenges When Changing Business Models

❌ Disjointed Product Data

When selling on multiple channels (Website, Shopee, Lazada, TikTok Shop), each platform has its own management methods. This leads to businesses having to update product information, prices, and inventory on each channel individually – which is time-consuming and prone to errors.

❌ Unsynchronized Inventory Across Channels

A product has 10 units in stock but is listed for sale on 3 different channels. When one channel sells 5 units, the other two still show 10 units available – leading to overselling and customer complaints.

❌ Difficulty in Calculating Prices and Profits

When changing models, re-pricing products requires considering: original cost, VAT, operating expenses, and desired profit margin. Doing this manually on Excel is very easy to get wrong.

❌ Difficult-to-Handle Backlogged Inventory

Products that are not suitable for the new model need to be liquidated or adjusted, but there's a lack of tools to track and analyze their effectiveness.

Solution: GTG CRM's Product Hub

Product Hub is a centralized product and inventory management system that helps businesses:

• ✅ Centralized Management - One place to manage all products, inventories, and variants
• ✅ Omnichannel Synchronization - Connects Shopee, Lazada, TikTok Shop with two-way synchronization
• ✅ Real-time Inventory Management - Track inventory instantly, avoid overselling
• ✅ Automatic Calculation - Cost price, VAT, selling price, and profit are calculated automatically
• ✅ Website Integration - Products are automatically displayed on your website

Guide to Handling Inventory When Changing Models

Step 1: Inventory Audit and Classification

Before converting, you need a clear picture of your current inventory:

1. Create Warehouses in Product Hub

• Go to Product Hub → Warehouses
• Add main warehouses, sub-warehouses, branch warehouses
• Enter information: Warehouse Name, Code, Address, Contact Person

2. Import Product List

• Create products with complete information: SKU, Name, Category, Brand
• Add variants (color, size) if any
• Assign products to specific warehouses

3. Classify Products

• Group A: Products suitable for the new model, continue selling
• Group B: Products requiring price or strategy adjustments
• Group C: Backlogged inventory needing liquidation

Step 2: Re-price Products

Product Hub helps you calculate prices automatically based on the formula:

Selling Price = Cost Price + VAT + Desired Profit

• Enter the cost price of the product
• The system automatically calculates VAT according to regulations
• You set the desired profit margin (e.g., 20%)
• The system automatically calculates the final selling price

Example:

• Cost Price: 100,000đ
• VAT (10%): 10,000đ
• Profit (20%): 20,000đ
• → Selling Price: 130,000đ

Step 3: Synchronize Products to Channels

Once you have centralized product data, you can push products to multiple channels simultaneously:

1. Connect E-commerce Platforms

• Shopee: Connect your Shopee shop
• Lazada: Connect your Lazada shop
• TikTok Shop: Connect your TikTok shop

2. Push Products to Platforms

• Select products to push
• Configure information for each platform (if needed)
• Click "Push Products"
• The system automatically synchronizes

3. Two-Way Synchronization

• When orders come in from Shopee/Lazada/TikTok, inventory is automatically deducted
• Inventory is updated in real-time across all channels
• Completely avoids overselling

Step 4: Manage Backlogged Inventory

For products in Group C (backlogged inventory):

1. Mark Status

• Change product status to "Out of Stock" or "Draft"
• Products will not be displayed on the website and platforms

2. Create Liquidation Campaigns

• Create a separate product group for clearance items
• Offer significant discounts for quick liquidation
• Use GTG CRM's marketing features to run targeted ads

3. Track Performance

• Dashboard displays inventory quantity over time
• Reports on best-selling/slow-moving products
• Timely strategy adjustments

Step 5: Continuous Optimization

After changing your business model, monitoring and optimization are crucial:

Monitor Metrics:

• Average Inventory
• Inventory Turnover Rate
• Stockout Rate
• Revenue by Channel

Improve Processes:

• Use data to forecast demand
• Adjust reorder quantities
• Optimize inventory allocation between warehouses

Benefits of Using Product Hub

Important Notes

⚠️ Data Consistency: Just like ad principles – keywords must match the landing page, product information across channels must be completely consistent. If customers see a price of 100k on Shopee but 120k on the website, they will leave immediately.

⚠️ Preview Before Pushing to Platforms: Use the "Preview" feature to see how products will appear on your website before pushing them to e-commerce platforms. Adjust images and descriptions to suit each platform.

⚠️ Data Backup: Before changing your business model, export all product and inventory data as a precaution.

⚠️ Employee Training: A new system requires new workflows. Ensure employees are fully trained to avoid errors in the initial phase.

Conclusion

Handling inventory when changing business models is not easy, but with a centralized management system like GTG CRM's Product Hub, you can control the entire process scientifically and effectively.

Instead of worrying about disjointed data and unsynchronized inventory, you can now focus on business development with the confidence that the system is running smoothly.