To be successful in your Amazon business, you can’t get away from Amazon inventory health management.
If sellers can do a good job of Amazon inventory health management, they can avoid at least two major profit “killers”, one is due to out-of-stock resulting in loss of sales, and the other is due to the backlog of inventory, inventory stranding and high storage fees.
Why Maintain Healthy Amazon Inventory Levels?
There are two types of sellable inventory that can generate unnecessary long-term warehousing fees:
Overage inventory: both inventory that has been stored in an Amazon operations center for more than 365 days and is subject to long-term warehousing fees.
Idle Inventory: i.e., ASIN items that have not been sold for six consecutive months or longer and have been stored in an Amazon Operations Center for more than 180 days.
If you want to know more details about Amazon inventory health management, you can click on this article:
The Importance of Amazon inventory health management
Today, consumers have high expectations for the convenience of online shopping, speed of delivery, and with it, high demands.
According to what we learned, 68% of consumers expect order packages to be delivered within 0-3 days, and 47% go for higher priced products in order to enjoy faster shipping and delivery services;
In addition, the average consumer is not willing to spend time waiting for sellers to replenish their stock, and the majority (70%) of consumers are dissatisfied if the delivery of order packages is delayed.
If the product is often out of stock, no inventory, consumers will choose other sellers of the same or similar products, so that the competitor’s listing rankings have been going up, while your listing rankings may plummet.
Another situation, if the product inventory is too much, there is a backlog, and sellers use FBA logistics, it will produce long-term storage fees, the cost of this fee is very high.
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If you don’t want to just read these text interpretations, you can click on the video below to help you understand more quickly about Amazon inventory health management：
Amazon inventory health
How to improve the Amazon inventory health for FBA sellers
Make a good stocking plan
Sellers should grasp the number of days of sellable inventory in real time, and replenish the inventory in a timely manner when the number of days is less than the number of safe days.
Days of saleable inventory = inventory quantity / average daily sales, replenishment lead time = (days of stocking + procurement cycle + days of arrival + days of saleable).
Stocking plan to take into account the freight, delivery time, purchase quantities, etc., in addition to reference to competitors’ product curves, predict the direction of the market, prepare in advance.
Real-time grasp of the number of orders and inventory
Sellers can only understand the real-time store data in order to manage inventory in a timely manner, to avoid stock-outs or inventory redundancy. Therefore, we can develop a safety stock program with the help of U-Max cloud ERP tools, and wait until the inventory is lower than the safety stock, inventory redundancy to remind us in real time.
Timely disposal of slow-moving inventory
There are the following ways to deal with slow-moving inventory:
Promotional activities: In order to reduce losses, sellers can carry out corresponding discount promotional activities for inventory items, such as buy one get one free, full reduction, bundled sales, etc.. Price reduction is always effective and can be good to improve the ranking of the store.
Delete Inventory: If the inventory is not selling well and the storage cost is too high, sellers can choose to delete the inventory and ship the goods back to them to minimize the loss.
Amazon Clearance Program: Participate in the clearance program on Amazon station and sell the inventory to the third party clearance wholesaler at a low price.
To manage inventory scientifically we need to comprehensively consider the mode of transportation, purchase quantity, cycle time, delivery timeframe, etc. We also need to monitor sales trends in order to adjust inventory levels in a timely manner and ensure that inventory levels match sales plans to maximize profitability with sound Amazon inventory health practices.
If you want to know more about it, click on Amazon Seller Center.
