There are many capable inventory management systems on the market, but adapting independent and specialist wine business to generic (ie, one size fits all) stock management software, when they’re bursting with complexities and the need to manage numerous inventory types, is far from easy, nor ideal.
Not just inventory management
Wine inventory management is challenging enough in today’s market of dynamic physical and virtual stock scenarios and sources of supply. However, finding the right management platform, capable of mastering all the various inventory types, and that is able to simplify the multi-step workflows and day-to-day processes typical of a wine business, is the key to realising operational and digital efficiencies that will improve how a wine business is managed.
These workflows encompass sourcing, shipping, landing and transfers, and the ability to connect to multiple sales channels, the range of which are starting to expand and are becoming increasingly attractive.
As Stuart Dale, founder of Crop & Vine, explains, “It was a huge headache for us if I’m totally honest, (selection of an ERP equivalent business management solution), when we looked at the market and went to evaluate systems. We weren’t going to get a Salesforce, it was far too inefficient and all the other systems we looked at were really for Tesco-type stock management and big volume retail supermarkets and that obviously comes with a huge cost.”
“We wanted something that was essentially a one-stop-shop for all of our invoicing, supplier, client and stock / inventory management. What the Hub gives us is a central hub for everything – a tool for the day-to-day management of our wine business.”
Stuart Dale, Crop & Vine
Wine market specialisation
When considering what constitutes the best wine inventory software, begin with identifying requirements or characteristics specific to wine and spirits specialists, and matching those to the workflows of available business management software.
Having a technical platform that understands different inventory types is proving to be the key for many independent wine companies; for both differentiating and tracking stock and accounting for sources of supply that are only purchased once a sale has been committed.
Meanwhile referential data that underpins inventory management, cleansing virtual stock feeds and consignments, brings a higher level of integrity to stock management, notably within fine wine lists or portfolios.
Inventory management needs for a stockholding business model
For a stockholding wine business, inventory types can include en primeur stock, purchased stock inclusive of Incoterms, stored stock consolidated in a warehouse (being duty / tax suspended), owned physical inventories (both in bond and duty paid), stock purchased and being transferred on a group shipment, or stock purchased from an agency, distributor or importer for immediate transfer or future delivery.
Inventory management needs for a low stock model
For a low inventory model wine business, sources of supply encompass stock lists from other wine merchants, client stored wines (consignment), Liv-ex trading exchange virtual stock, or stock from agencies that can be offered for sale by a business and added to a sales order before they are subsequently committed to as a purchase.
Accountability for virtual stock
Virtual stock describes the taking on for sale of a stock list, then selling from it, before committing to purchase.
It’s increasingly common for businesses to want to tie up less working capital in wine inventories, meaning that at least some part of the wines of their stock list doesn’t sit on their balance sheet.
Virtual stock workflows are designed to start with the import of third-party stock lists; mapped and matched to (or incrementing) a referential products database; followed by margin calculation; offering that stock for sale; generating a sales order that then creates a purchase order back-to-back; that in turn starts the transfer and pre-advice / goods in process.
An effective virtual stock business operating model demands efficiency throughout the entire workflow management continuum. Maintaining up to date stock positions, good margin management, quick payment to suppliers, timely transfers from suppliers and goods in reconciliation processes and excellent customer communications. Repeated many times a day, hundreds or perhaps even thousands of times per month.
When to invest in a wine inventory management system?
Working with any kind of stock volume and wider sources of supply, or where selling omnichannel (ie offline and online simultaneously), necessitates a multi-channel wine inventory management system to avoid overselling and painfully time-consuming activities.
We did 20 years working off Sage and also made that our stock management system, so we did everything on this one package which was very much made for Accounting. It did work, but it wasn’t precise and there were errors that would not have happened if we had had a specific method for doing certain wine related things.
Maisie Turner, Decorum Vintners
Similarly Bud Cuchet, of Cuchet & Co, had years of business experience when starting his wine company and identified quickly that manual data entry was not a viable solution long-term.
“I started out using the inventory management functionality in Xero, but also needed to carry on using 3 different spreadsheets. Why? Because I wasn’t able to put rotation numbers [ warehouse generated unique case identifiers] into Xero; I also wasn’t able to run off a price list or stock list, nor was I able to send release instructions to my warehouse from Xero. These were manual processes that took up valuable time, needlessly. My biggest fear during this time was making a human error, and the potential for it to be a costly one. The realisation of how much time I was spending on a single order presented me with a very simple choice: I either needed a way of automating it, else I needed to employ someone just to do order processing and fulfilment admin.”
Stock integrity is key
When global supply chains become stressed, and shipping costs increase, exacerbated by regulatory friction and import obligations, stock integrity becomes more critical than ever, especially in regards to movement of goods-out and goods-in processes.
Gilles Corre from Asset Wines summarises the complexity as follows,
“Managing stock that is in multiple locations – warehouses, duty paid office, duty paid cellar, at the producers, traders and wherever else it is, knowing when it’s going to reach you, when you’ll be able to deliver it – is a very complex thing to do. Trying to do that on your own without software that manages all those problems, is almost impossible to do correctly”.
So how complicated can it really be and what’s the answer?
Most people don’t realise how complex it’s going to be, and how time-consuming and how error-prone it can be, and how expensive errors are in managing this stock. That’s the number one value of Wine Hub – that you can manage your stock and Wine Hub does that very well.
Gilles Corre, Asset Wines
Inventory excellence within your wine business management platform will ensure your business achieves stock integrity. Plus the huge added bonus here is stock integrity enabling superior customer service, so you stay one step ahead of your competitors!
Maddy Hollick explains the impact having the right business and wine stock management partner has had for IG Wines.
“We have a much better sense of where we are in terms of our stock management. We had a couple of systems before that gave us little snippets of information that we needed, but the Hub has been great at giving us things like inbound stock, shipments, outbound stock, linking up to LCB, through to Ecommerce where customers can arrange their own delivery for themselves. It’s given us a lot of knowledge on our stock and our customer service has gone from very low to very high.”
Learn more about the Wine Hub’s advanced inventory management.