When the inventory is insufficient sellers need to develop a corresponding Amazon FBA inventory replenishment strategy based on sales demand and inventory to realize replenishment of products to meet sales demand within a certain period of time.
FBA inventory replenishment strategy
Safety stock
Safety stock is the inventory prepared to prevent the instability of supply and demand, and the uncertainty factors include the sales surge caused by promotions, logistics delays and so on.
Generally speaking, the larger the safety stock, the smaller the possibility of out-of-stock, but the larger the safety stock, it may lead to the emergence of a large amount of surplus inventory, which will generate a large amount of warehousing costs for cross-border e-commerce sellers.
So the amount of safety stock also needs to take into account factors such as sales volume, goods delivery time and other factors. Cross-border e-commerce sellers can refer to the following calculation of safety stock: safety stock level = expected average daily sales volume * arrival time period.
Average sales sellers can be based on the product 7 days, 14 days, 30 days, 60 days sales, or even longer sales to go to the statistics, in order to get more accurate, close to the actual sales data.
But in fact, there is no standard way of calculating safety stock, sellers need to summarize the reasonable amount of stock suitable for their own business based on past historical data, procurement.
FBA inventory replenishment
Safety days
Safety days refers to the number of days of inventory buffer in order to prevent out-of-stock caused by abnormal conditions. Cross-border e-commerce sellers can stock up for the appropriate number of days according to the sales performance of their business, usually ranging from 7-14 days.
FBA inventory replenishment Volume
The FBA inventory replenishment quantity is the number of products that need to be replenished, which can be calculated by referring to this formula: replenishment quantity = safety stock + quantity of stock in transit – current stock – sold and unclaimed stock.
However, the replenishment quantity is not a stable factor, subject to the supplier’s delivery cycle, inventory costs, sales volatility, product attributes, etc., may produce different replenishment quantities.
Replenishment point
Replenishment point is when the inventory reaches a specific value, it is necessary to replenish, replenishment point is mainly considered product transportation time in transit, acceptance into the warehouse time, pre-sale finishing and processing time and so on.
General replenishment point calculation, can refer to the use of the following calculation: replenishment point = safety stock + average daily sales volume * average stocking time.
In addition to this, in the case of the Amazon platform, for example, the data that sellers have to refer to for replenishment are as follows:
- FBA in-stock inventory: the number of existing inventory in the Amazon warehouse, including on-sale and transshipment inventory
- FBA in-transit inventory: the number of goods sent to Amazon warehouse that have not arrived at Amazon warehouse
FBA inventory replenishment
If you want to know more details about FBA inventory replenishment, you can click on this article:
How to avoid the risk of FBA inventory replenishment?
For cross-border sellers, it is also crucial to effectively monitor the stock of goods and demand dynamics, and arrange for replenishment in a timely manner, so as to prevent problems before they occur.
Daily monitoring of sales and inventory
In the daily operation analysis, sellers should pay attention to whether the sales situation is within the established range, in addition to the daily sales changes and growth. The emergence of continuous growth and decline in sales, or a surge and rapid decline, we must make a good response plan and make timely adjustments.
In addition to the sales situation, FBA warehouse, local warehouse inventory changes also need to pay attention to, especially the number of warehouses, the need to meet the sales needs of multiple stores.
Manual statistics on sales performance data, inventory and then analyze, often investing more time, and it is difficult to avoid errors in manual statistics.
Continuous optimization to improve sales forecasting
Sellers can preset the sales of products in advance before carrying out the sales of each product, monitor the actual sales situation and the gap between the target sales, and continuously optimize the sales plan. With a large amount of data to ensure the accuracy of the plan, but also can prompt the supply chain personnel to do a good job of stocking and replenishment support.
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