Managing your Amazon inventory effectively is essential for every Amazon FBA seller serious about making a living. It helps you avoid two big money-losers: not having enough stock to fulfil orders and paying too much storage fees because you have too much.
Finding the sweet spot between under and over-stocking is the essence of effective Amazon inventory management. You can determine the appropriate reorder frequency with the correct plans to optimise your inventory levels.
Learn why Amazon inventory management is vital for your Amazon FBA business with 3 bonus tips to manage your Amazon inventory effectively.
What is Amazon Inventory Management?
Amazon inventory management encompasses everything from keeping on product availability to optimizing storage at fulfilment hubs. Learning to manage your Amazon inventory efficiently is necessary for a company to run smoothly and successfully in the cutthroat Amazon marketplace.
Seamless Amazon inventory management is critical for every company dealing in product sales; Amazon is no exception. The essence of it is closely managing your Amazon inventory. To avoid stockouts—which can result in missed sales opportunities and unhappy customers—too closely, monitoring the number of each product in stock is crucial. Furthermore, it is crucial to steer clear of overstocking since it might squander funds and lead to the buildup of stale or outdated products.
By maintaining a steady equilibrium between supply and demand, this critical process supports your company. The possible outcomes of careful Amazon inventory management are improving supply chain efficiency, satisfying customers’ demands, and optimizing product availability.
Why Is It Important To Manage Your Amazon Inventory?
Every thriving Amazon FBA business has one thing in common: excellent Amazon inventory management. You can do a lot more with command of your Amazon inventory management if you do it yourself:
Draw in customers to ensure consistent sales: Customer satisfaction is directly proportional to Amazon’s inventory management quality. Customers will repeatedly return to your store if you consistently fulfil their requests. Customers are also less inclined to buy a comparable product from your rivals.
Cut down your overhead cost wherever possible: Although your product stock is a valuable asset to your company, it also has the potential to be a burden. If you need to rent a storage facility, poorly managing your Amazon inventory might drive up storage expenses.
Seamlessly manage your Amazon inventory: One way to keep from having too much of a good thing is to keep track of what you already have in stock.
Take precautions for perishable goods to avoid spoilage: Proper Amazon inventory management is essential for preventing the deterioration of perishable goods, such as food items, nutritional supplements, cosmetics, and more. You risk losing your initial investment if you don’t sell these things before they expire. Keeping tabs on your stock makes running sales easy or providing discounts to move perishable goods.
Precisely manage your order fulfilment process: Keeping track of the products you have in stock is only part of managing your Amazon inventory. Making sure your organizational control plan is effective is also essential. You can keep your clients pleased, complete their purchases accurately, and reduce returns using SKUs or correct labelling on your products.
3 Tips To Manage Your Amazon Inventory:
Keep an Inventory of At Least 30–45 Days
A good rule of thumb for managing your Amazon inventory is to have enough stock to cover your anticipated sales volume plus or minus thirty to forty-five days. This equilibrium keeps you from running out of supply or having too much inventory. One way for Amazon FBA sellers to predict how much money they will make is to look at Amazon’s inventory data and monitor their sell-through rate.
Prepare For The Unexpected
Things sometimes go differently than they are. Problems can arise anytime with your supplier, shipment, customs, or the FBA warehouse.
Place an advance order for additional units to ensure a smooth supply chain.
Extra units can be kept in your warehouse or a third-party fulfilment centre. Manage your Amazon inventory in FBA or use FBM to fulfil orders despite delays.
Consider doing this only if you’re very good at anticipating product demand and have plenty of stock. Don’t order additional if you are strapped for cash or need somewhere to store it.
Manage Your Slow-Moving Amazon Inventory
One way to manage your Amazon inventory is to eliminate old stock, stop it from rotting, and save money on storage by running sales and giving discounts. Run a special promotion to move inventory and free up warehouse space if some of your products last sold over three months ago.
On the other hand, to prevent Amazon inventory management fiascos, you should also be strategic with your promotions and sales. Limit the amount of promoted items you can have in your inventory. To avoid running out of stock entirely, you can remove the promotion after you reach that amount and then sell the remaining stock for the usual price.
However, if you want to sell out a specific item entirely, you should establish a threshold value that covers four hours of promotional sales. You will have ample time to handle incoming orders while Amazon removes the deal.
Key Takeaways:
By implementing these 3 tips to manage your Amazon inventory and understanding the importance of proactive Amazon inventory management, you can conquer the challenges of the Amazon FBA business. Remember, the sweet spot lies between never letting your stock dip below optimal levels and avoiding the pitfalls of overstocking.
Embrace data-driven insights, anticipate the unexpected, and strategically manage your slow-moving inventory. By mastering these essential elements, you’ll ensure a steady flow of sales, keep your customers happy, and optimize your profitability, ultimately transforming your Amazon FBA business into a well-oiled machine.
If you’re an Amazon FBA seller feeling overwhelmed by having to manage your Amazon inventory, feel free to contact one of our Amazon inventory management experts at Prime Retail Solutions.
With our proven inventory management techniques, we will adjust and implement a bespoke approach to streamline and manage your Amazon inventory based on your unique product mix and customer demand on Amazon. Get in touch with us today!
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