The above question might have struck your mind several times if you are an Amazon seller. Effectively managing the inventory is an essential part of becoming a successful seller. By working your list, you can easily avoid significant profit killers, accruing high storage costs because of overstocking, and losing sales as the products go out of stock.
The management of inventories has emerged as the primary differentiator between successful and unsuccessful retail operations. It is essential to have proper inventory management to reduce unnecessary costs and streamline your business process.
What is Inventory Management?
Inventory is the number of products a business holds to sell in the marketplace. Ecommerce Inventory management is the process of storing and tracking these products to meet the demands of the customers efficiently. It also includes strategies a business implements to source, process, and store products to prepare them for sale.
Poor Ecommerce inventory management may result in a loss of profits due to a shortage of products or the higher cost of storing overstocked products. However, the results of poor management may not be visible for a few weeks. But things may go out of control when it becomes apparent. Sellers may experience unfulfilled orders, and products may stay out of stock and lose sales, dead stock, spoiled products, or too high storage costs.
Successful ecommerce inventory management is finding the perfect balance between overstocking and shortage. Using the right strategy for your inventory, you can quickly determine how often your list needs restocking to maintain optimal levels.
Why do Amazon Sellers Need Inventory Management?
In this competitive world, customers don't wait for a product to come back in stock. Instead, they immediately start looking for alternatives if they find a product out of stock. As per statistics from JungleScout, 68% of Amazon customers from the United States expect their products to get delivered within the first three days of placing the order. Moreover, almost 50% of them are ready to pay more for faster delivery, and 70% will be upset if their product is not delivered on time.
If the product continuously goes out of delivery, customers will start looking for products from competitors. This way, sellers will lose not only sales but also organic traffic. With more customers preferring other products over yours, your listing's organic ranking will drop gradually.
Here are four reasons why Amazon sellers need to take control of their inventory:
1. Attracting more sales: If the product listing constantly shows out of stock, the potential customer will prefer buying from the competitors, and you will keep losing profit as an Amazon seller.
2. Reducing inventory cost: When the inventory is not managed correctly, it may have too much inventory, and sellers may have to spend more money to store unsold products.
3. Reducing inventory loss: With proper ecommerce inventory management, sellers can reduce losses from inventory mismanagement, damages, spoils, and errors.
4. Reducing product spoilage: If you are selling perishable products, an effective inventory management strategy can help track the sell-by and expiry date of products to avoid spoilage and reduce unsellable products.
While ecommerce inventory management is crucial for every Amazon seller, most small businesses don't have a proper ecommerce inventory management strategy. However, taking inventory control is straightforward and avoids losing profits and extra storage costs.
There are various methods available to you for managing the orders and inventory of your Amazon store. To get you started, here are a few steps you can take:
Planning for Inventory
It is generally a good idea to coordinate the supply of your items with the typical demand for them to design your inventory more effectively. The gauging and planning should be done point-by-point to make this possible. To put it another way, you need to ensure that you are not sourcing excessively many or inadequate quantities of the items. Amazon provides a variety of reports that you can use to improve how you organize your inventory.
For example, the Amazon Selling Coach can provide assistance in distinguishing inventory openings in light of your deals and the information regarding your current inventory. It provides individualized recommendations for streamlining your stock levels. On the page where you oversee inventory, you can also view the details of your postings and the status of those postings. You are prompted on this page to address inactive or out-of-stock postings so that you can evaluate the quality of your inventory and determine ways to improve it.
Amazon sellers who provide faster delivery of products usually experience higher conversion rates. With such a massive demand for products, it is ideal for the sellers to maintain an inventory of four-week as it will provide sellers with enough time to:
- Distribute Inventory
- Maintain timely delivery records to provide better customer satisfaction
- Reduce stock shortage and lost sales
- Avoid overstocking of products to save on storage cost
Managing Supplies and Inventory Sourcing
If you source less than the required inventory quantity, there is a greater chance that you will run out of stock during peak demand, which can drive up your ordering costs. Sourcing too much inventory can also cause a drain on your cash flow by acting as a large investment and providing adequate income.
Before submitting the request to your provider, it is wise to analyze the patterns of the previous deal time frames and identify the upcoming events that can influence your supply and demand. Consider consulting with various Amazon listing services due to the changing factors, such as product quality, ability to coordinate, exchange controls (especially while sourcing globally), value-added administration, and cost.
By maintaining a four-week inventory, sellers get enough time to source new products and restock their merchandise before the product goes out of stock.
Keeping Track of Inventory
Putting away inventory requires a lot of careful consideration. When performing tasks in a warehouse, it is not uncommon to cause damage to the items. Pack your things carefully so that the item you are transporting will not get damaged in the process. Ensure you store your inventory in a physically secure place. Storage options for various product categories are additionally impacted by environmental conditions such as temperature and humidity. Make sure your staff is well-prepared to reduce the number of inventory administration problems.
Stock of Perishable Items
The First-in-First-Out feature is valuable for managing time-sensitive or quickly depleting supplies. This implies the list obtained should be dispatched upon accepting a request.
This reduces the risk of obsolescence and limits your returns/guarantees due to accidentally sending out-of-date items to customers. To implement this system, you must conduct effective distribution center management rehearsals.
For perishable or aging products, you must create an effective strategy to sell them before they perish. Sellers can opt for Amazon's Inventory Performance Index, which provides them with recommendations like limited-time promotions and offers to sell these products quickly. Sellers can choose this feature when the stock remains unsold for over 90 days.
Wrapping Up
You may now understand the significance and benefits of inventory management in your business. In conclusion, you must discover the ideal partner to work your list effectively. Amazon Listing Services provides you with the best ecommerce inventory management solutions your business desperately requires. In the interim, you can contact us at info@amazonlistingservice.com for answers to your questions and pricing information.