Managing Inventory When Selling on Amazon

One of the key aspects of selling successfully on Amazon is managing your inventory efficiently. With proper inventory management, you can ensure you have enough stock to meet demand without overstocking and tying up too much capital. Here are some tips for managing inventory for Amazon sellers.

Analyse Historical Sales Data

When deciding how much inventory to keep on hand, look at your past sales history on Amazon. Review how many units you sold daily, weekly, monthly, etc. Identify any peak sales times such as during the holidays or Prime Day. Use this data to forecast future demand and decide on your target inventory levels. Order enough to meet average demand plus extra to cover spikes.

Set Ideal Reorder Points

Determine reorder points for each product – the inventory level at which you need to replenish stock. Factor in lead time from suppliers, seasonal fluctuations, and safety stock. Monitor inventory levels in your Amazon Seller Central account. When they hit the reorder point, place a replenishment purchase order with your supplier. This ensures you don’t stock out before new inventory arrives.

Turn On Inventory Warnings

Use the inventory warnings feature in Seller Central. You can set parameters like a minimum threshold and preferred coverage length. When your inventory levels drop below the set threshold, you will get notified so you can take action to avoid running out of stock.

Manage Inventory Across Multiple Warehouses

If you use the Amazon multi-channel fulfilment option, you may store inventory in Amazon warehouses and your own facilities. Use unified inventory management to have a central view of stock levels across all locations. Adjust inventory allocation between warehouses to prevent stockouts and overstocks. Ship more units to Amazon as needed to meet spikes in sales. 

Using a third-party prep centre and fulfilment service, such as prep centre services at Prep365, can help streamline the process of selling on Amazon FBA. These services handle tasks like labelling, packaging, and shipping your products to Amazon warehouses for you. This saves you time and lets you focus on sourcing products and managing your Amazon listings. 

Ensure you pick a reputable service that is familiar with Amazon’s requirements. Clearly communicate your needs and expectations. Monitor their performance to ensure packaging quality standards and shipping times are being met.

Don’t Overstock Long-Tail Items

Carrying too much inventory ties up working capital and costs money. Avoid overstocking slow-moving products. Use historical data to identify your fastest selling SKUs. Keep more inventory of top products, while limiting stocks of slow movers. Let demand guide your replenishment quantities.

Plan for Returns

Factor in returns when deciding how much stock to keep. Analyse historical return rates. Allow for extra buffer stock during peak return seasons like the holidays. Have a process to quickly return excess inventory to suppliers if you overestimate demand.

Develop Backup Sources

Find secondary suppliers for your top-selling items. This provides a safety net if your primary vendor encounters supply issues. It also gives you options to get inventory faster when demand exceeds forecasts.

With the right inventory management strategies, Amazon sellers can maximise sales while avoiding costly problems like stockouts, dead stock, and cash flow shortages. Adjust and refine your approach using real data. Inventory optimisation is vital for Amazon success.