So you want to know: how does Amazon manage inventory work? If you sell on this site, proper inventory management should be the thing you know by heart. Think about this for a moment. Problems with the stock, in particular with the availability of the product, can have quite tangible consequences. The purpose of this topic is to explain how to help your sales growth. Furthermore, we include some secrets about how to manage inventory.
- 1 The importance of Amazon inventory management
- 2 Manage inventory Amazon like a Pro
- 3 Final Thoughts
The importance of Amazon inventory management
In order for cash flow to be inexhaustible, it’s necessary to use Amazon inventory management, even though it’s not a quite an easy task. Starting your business, you don’t immediately think over all possible issues. It’s often more reasonable to solve them as they appear.
Adaptation of prices, market fluctuations – these can be traced by an application like Sellery. But sales can’t be successful based only on one point, such as the price.
The most important factor is the amount of inventory. It’s especially important for a seller. A lack of stock negatively affects the list of goods, which in turn may have other consequences. For example, a falling sales volume. Every issue must be considered separately. How to manage inventory on Amazon? Let us consider the most common issues and their solutions.
Basic issues when managing inventory on Amazon
1. Products that are not in stock
For other sites this is not so critical, but for Amazon this mistake can become fatal. If Amazon knows that you are empty in stock, then an order from a buyer won’t come to you and your lists of goods will go down lower in rating. Control that. The only solution for this is by filling the shortage.
If we were talking about other companies and their websites we could mention a “date of arrival” tag, which is placed on a product that is out of stock at the moment. Amazon doesn’t give this option. Some companies try to cheat by increasing the time for processing the order of the goods to show Amazon that they are fully in stock, but it can be considered as fraught with consequences.
- If the arrival of products is late, you cannot process customer orders. As a result, the seller’s rating drops. It’s more difficult to restore it than to get it in the first place.
- The shopper on Amazon is always expecting to get fast delivery – within 2 or 3 days. If your delivery is more than a couple of days you will always be lower than others in the seller’s list.
2. Out of stock means a low rating
The result of a purchase search is also formed by the presence of the goods in stock. Search ranking for buyers is created by the availability of the products. This is one of the key factors in the search algorithm. With a lack of goods, your lists may not be available at all, and you can’t manage orders on Amazon.
However, if you are a seller of a unique, rare product, the search result won’t be such an influential factor. But if you have competitors with the same products, it will be difficult to be in the top.
3. Low sales means fewer reviews
Another important factor in the formation of the seller’s rank is the presence of reviews on the product. Receiving a review from the shopper is very important for the seller on Amazon. It’s worth the time because it can take you to the top. Fresh reviews attract the attention of new buyers. That’s how a product starts to sell itself. But if you don’t have sales, then you can’t get a review, which means a lower ranking.
So, we considered all the problems. Now it’s the time to find the solutions. Let’s get started.
Manage inventory Amazon like a Pro
Full understanding of the FBA
In order to understand how Amazon works, experts advise using such a service as the Fulfillment by Amazon (FBA). You may have to spend some money, but Amazon FBA inventory management is worth it. Especially when we are speaking about such things as warehouse outsourcing and inventory management.
In addition, this service also offers free shipping, as well as Prime shipping. Today, buyers first look at the availability of this option. Amazon FBA inventory management is the right key for those who want to stay in the game today.
Optimize your product sales volume
Analysts advise spending time on optimizing the classification of goods, as well as on work with meta tags. Why? Because it will have further benefits. If you run the advertising campaign or the buyer searches for a product, such actions will be very useful in the future. Distributing products into categories and Amazon will help you to increase sales volume.
Tax policy has also postponed its imprint on Amazon. Even if the site stores your goods in its own warehouse, you are still responsible for them. Managing and monitoring this isn’t so easy of a task as it seems. That’s why it’s better to entrust all of this to the FBA.
Using Amazon tools to manage your inventory
You can manage inventory using different applications. Amazon sellers manage inventory in their own way. But in any case, they are related to Amazon’s Seller Central service. This section offers a lot of different data with which you need to work successfully. One of the most important bookmarks is the Manage Inventory screen.
Here you can trace and change the information about your products. Namely, you can:
- View product listings (active, inactive, and suppressed)
- Add a new product to the list
- Change quantity
- Adjust price
- Track delivery by FBA
- Estimate the sales volume or the FBA that the seller performed
- Find out your goods’ current stage of delivery
If you work with large volumes of goods you can use third-party applications for more productive work. But in any case, all the changes and actions with the goods will be displayed in the Seller Central.
Amazon Selling Coach, in turn, has many tools that are undeservedly undervalued by sellers, even now. Selling Сoach gives the opportunity to track possible sales trends and see the site’s rating. Tracking is one of the most important steps of the restock. Amazon will show you how long your stocks are full enough. This will help to accurately predict how much time you need to order the goods and what its volume should be.
This application will send you mail when there is a need to replenish the stock. The message will come in advance so you are insured from the fact that in your warehouse there are no goods, and as a result, your business will be successful.
Some sellers seek help from other services and hire specialists to solve such issues. But we strongly advise you to pay attention to tools in Sales Central and Amazon Selling Сoach. Use them, because they have everything you need to successfully manage your stocks.
Amazon Sales Models
Each seller has an individual sales style. Replenishment of goods is directly related to your own type of sales. For beginners, there are five main sales models. Amazon provides information about each:
- FBA Retail Arbitrage – Clearance sales, 5 – 8 Days for FBA receipt.
- Private Label Importer – Overseas manufacturers, 4 – 8 weeks.
- Multichannel Ecommerce Seller – Wholesale suppliers, 1 – 6 weeks.
- Retail Store also Selling on Amazon – Wholesale suppliers, 1 – 6 weeks.
- Manufacturer – Self, Your production schedule.
Your finances should be ready for stock purchases
The Amazon system works in such a way that sellers receive payments only twice a month. Therefore, you always need to have some funds to replenish stocks. Not being able to multiply and replenish stocks leads to all the problems listed above. Now let’s look at the solutions of this problem.
One of the most popular ways to work with money on Amazon. From your daily income, a certain percentage is sent to your bank account.
Professionals often use several credit cards as well as Payability to achieve the most convenient results for themselves. Pairing credit cards, as well as programs with zero percent, is something that should interest you. They give you the opportunity to buy more goods for the warehouse. Amazon inventory issues are often caused by the credit card system.
Loans or Lines of Credit
These are more profitable than credit cards, but suitable only for a very profitable business. As a rule, they have a low percentage, but there is one difficulty. They are hard to get, especially when you are just starting your own business. A great option is to buy a huge volume of products.
Amazon’s third-party inventory tools
If you think that the standard set of tools on Amazon is not enough, then you can try other services or different software. For example, you need to transfer data from your own website or from another site to Amazon, but there is too much of it. What do you do? Use a third-party service! Other tasks may also arise. Here is a list of applications and what they are used for:
- Inventory Labs & Scoutify App – Retail Arbitrage Sellers & FBA sellers.
- SellerEngine Plus – Merchants needing full Amazon account management tools & FBA sellers.
- JoeLister – Sellers on both Amazon & eBay.
- Forecastly – Amazon FBA & Amazon international sellers.
- Skubana – Volume Amazon sellers.
This is just a small list of applications for working with data. In fact, there are many more. Almost every application has a free trial period. So you can appreciate whether it suits you or not. Take a test drive with that and through experimentation you will know exactly what you need.
How you manage your stocks on Amazon depends on the business model you use. Every seller has its own Amazon inventory management strategy. The key to effective sales is the use of the tools and applications in the trading platform (as a rule, they don’t require any costs). As your business grows, try different tools and approaches, then combine them. If you are just starting your business or want to set it up, then there is a ready-made solution.
What if you can not restore your seller’s account or get to the top of Amazon’s merchants? AMZ-Expert is a team of professionals who will help you sell products successfully and easily. They can develop a business model, find weaknesses and eradicate them. Inventory management is one of their strengths.