Effective Amazon inventory management is crucial to your growth and long-term success on Amazon. In addition to staying in stock, you need to have a backup plan (or two) for order fulfillment. You also need to know your numbers to make sure your products are staying profitable.
In this article, we’ll discuss five strategies for streamlining your Amazon inventory management processes.
Calculate Your Lead Time For Proper Amazon Inventory Management
How far in advance do you need to plan to keep your top-selling products in stock? Lead-time varies by product, by the supplier, who ships orders to buyers, and much more. Keeping track of the moving parts associated with each of your products can be incredibly challenging, especially if you stock many different products or items with variations.
You and your team need a clear picture of how long it takes to get each of your products sellable, from manufacturing to shipping to packaging to order fulfillment and every step in between. In addition, you’ll want to cultivate great relationships with your suppliers and keep track of important events that may cause order delays. Depending on your business needs, it might make sense to consider utilizing a supplier CRM to keep your team organized.
Stay in Stock
Finding the right Amazon inventory balance requires both sides of your brain and a little luck. Keeping Amazon inventory management at healthy stock rates is critical. After all, you didn’t spend all that time and money building your sales rank to let it slip away by not having inventory available. Even worse, you don’t want to hand your hard-earned traffic over to your top competitors!
If you are using Amazon FBA to fulfill some or all of your orders, you’ll need to factor shipping and receiving time into your lead time calculations. FBA recently implemented restock limits by storage type, so you may need to prioritize which items you send to FBA. You’ll also want to maintain a good IPI inventory score.
Overstocking will cost you money, especially at FBA fulfillment centers or a 3PL. You don’t want to get stuck paying for storage space for inventory that won’t sell. On the other hand, you certainly don’t want to run out of stock on your most profitable items. No matter how you fulfill orders, you need a backup plan, which brings us to the next strategy.
Make a Backup Amazon Inventory Fulfillment Plan
The importance of diversifying is one lesson we can all learn from the global pandemic. Amazon FBA has incredible logistics and is known for reliability, but even the best systems can fail when something unexpected happens. As an Amazon seller, you should always be prioritizing customer experience- the marketplace is outright obsessed with it. In order to provide a superior customer experience, you need to be able to fulfill orders quickly.
Many sellers rely on Amazon FBA to fulfill orders, which is particularly useful because enrolling in FBA means their products are eligible for Amazon Prime’s fast and free delivery. But successful sellers always have a least one backup plan for fulfilling orders. Whether you choose to fulfill orders from your own location, a 3PL, or even a storage unit, your backup fulfillment option will give your business additional flexibility.
However, you definitely need a system for keeping track of where your inventory is and how much inventory you have. RestockPro by eComEngine is designed to help FBA sellers manage Amazon FBA inventory that has been sent to fulfillment centers as well as local inventory. The software provides restocking suggestions based on your current supply, demand, lead time, and many other factors to help you restock the right products at the right time
Know Your Numbers
There are many fees associated with selling and fulfilling orders on Amazon. You need to have a clear understanding of how those fees and all your other costs impact your Amazon auditing bottom line for each SKU you sell. Failure to factor in all costs can result in improper pricing. You might even end up selling products at a loss. Get to know the numbers to make sure this doesn’t happen to you. After all, you’re in business to make money!
If you’re fulfilling orders with FBA, it’s important to know that many FBA fees are calculated based on item dimensions. If your product is measured incorrectly, you may be entitled to fee reimbursements. GETIDA will audit your transaction history to find discrepancies and file Amazon FBA reimbursement claims on your behalf
Manage Excess Inventory
If you have too much Amazon inventory that isn’t selling, you need to get it moving to avoid long-term storage fees, storage limits, and opportunity costs associated with having your money tied up in stale inventory. Depending on the products, you might want to try decreasing your price, optimizing the listing, advertising, or driving traffic from outside of Amazon to help sell the items. While these strategies might not be great for profits, they are often better than your other options for managing excess inventory because you can increase your sell-through rate more quickly.
If none of those options work, or if you just want to get the inventory out of FBA, you can submit a removal order to have excess inventory returned to you so you can sell it on another marketplace, donate it, store it locally (may work well for seasonal items), or take another action. You may also choose to have Amazon dispose of inventory on your behalf for a fee. Another option is to use FBA Liquidations to recover part of the value of your inventory; with this program, Amazon works with a liquidator on your behalf.
Restock at the Right Time
RestockPro is designed to help you streamline Amazon inventory management, from managing suppliers and creating POs to printing custom stickers and labels. Automating as many inventory tasks as possible allows you to spend more time growing your business.
We’ve partnered with GETIDA to offer $500 in Amazon FBA reimbursements at no cost to you. Automate your inventory management processes and FBA reimbursement claims to free up your time for other tasks.
