Within Skubana, sellers have the ability to automate available inventory allocation for products across different sales channels.
To begin, click into the Inventory module and then click on one of the Master SKUs, a new window will open up. You will see five different tabs, “Auto-Reorder Rules”, “Channel Allocation”, “Excluded Warehouses”, “Edit History” and “Channel History”. Click on the Channel Allocation Tab.
In this tab you will see five columns: Sales Channel, Rule Type, Value, Minimum Rule Type, and Minimum Value. Notice there are two different sections, green and red. These sections correspond to your inventory levels in your stock detail graph, which you can see for each SKU. To see this, click on a product in your inventory module, anywhere but the Master SKU itself.
On the right hand side of the window, you will see your inventory levels per warehouse under stock details. The green and red sections in your channel allocation correspond to the green and red sections in this stock details graph.
If your stock quantity level for this specific SKU is in the green it means that you have sufficient inventory, or above the minimum level, for the time being and the Channel Allocation rules for the green section will apply. If your stock quantity level is in the red it means you are below the minimum level of sufficient inventory and the Channel Allocation rules in the red section will apply.
Skubana can automatically set minimum levels for you or you can set them up yourself manually.
To have Skubana set minimum levels, go back to the Inventory Rules page by clicking into a specific Master SKU. Click on the “Auto-Reorder Rules” tab next to the “Channel Allocation” tab.
Skubana calculates your minimum level using this formula:
Minimum level = Sales Velocity x (Lead Time + Reorder Buffer) x (1 + Forecasted Growth)
As you can see on this page, the information for the other fields can be adjusted for your needs.
To manually set your minimum levels, click on the wrench symbol that is next to the “Min. Level” line under warehouse totals in the stock details window. It will open up a new window in which you can manually input a minimum level number.
Note: As mentioned in this window, if you have the Auto-P.O reorder functionality turned on in your global settings sections Skubana will auto calculate minimum inventory levels for all products and override any manual levels you have set.
Now that you have set your minimum levels, let’s go back to your Channel Allocation rules. Essentially there are two rule types available:
- % of Available: using this rule will apply only the percentage of available to the listing. For example, if you put 10 into the 'Value' while using this rule type, it will display only 10% of total available. If we have 1,000 units of this product available, Skubana will push 100 available units to the selected sales channel.
- Max Allocation: using this rule will simply allocate a maximum value to the selected sales channel. For example, if you enter a value of 200 to this rule type, it will reflect in the selected sales channel that 200 units are available even if we have a total available quantity of 1,000.
To better understand these rules, let’s refer back to the Channel Allocation window. Remember that there are two sections of rules, the green section and the red section.
The green rules apply when your inventory quantities are above the minimum level, and can be used more so as a sales strategy to generate demand by creating a sense of urgency for the customer.
When your inventory quantity falls below the minimum level the rules in the red section go into effect. The min. rule type is meant to restrict or control the selling of this product when it is in the red zone. This helps in preventing the overselling of this product. As opposed to when the inventory quantity is green, the min. rule type will display the % available or max allocation from the minimum quantity. To better understand this let’s take a look at an example using information from the image above.
Let’s say that we are currently in the red for a specific product, and we have a min. quantity of 100, and actually have 100 units available. If we look at the min. rule type for Amazon US with a % available value of 10, in this case Skubana will push to Amazon that we only have 10 units available in stock. If we get down to only 10 units available, this rule will push to the sales channels that we only have 1 available in stock; if we only have 9 units available, Skubana will push that we are out of stock.
If in this red section we use the max allocation rule, it will display the maximum quantity allocated from the minimum level quantity. This means that if we entered a value of 5 units in this field while 100 units are available and the min. level is 100, Skubana will push to the sales channel that we have 5 units available, regardless of the actual available units; if the available units is 90, it will still push 5 units.
Remember, the red zone is triggered once our available inventory quantity reaches the min. level. From here, Skubana will follow the channel allocation rules you’ve set up.