How to manage Amazon inventory well in the second half of the year
Freight skyrocketing, inventory management imperative!
As of July, at least 50,000 Amazon China merchant accounts have been affected by the closure, and more than $1 billion worth of overseas inventory needs to be cleared. Preparation for the busy season in the second half of the year began, but the global congestion, 353 cargo ships motionless, 570 ships waiting for loading and unloading, cargo always floating on the sea. All kinds of uncertain factors, so that sellers of inventory management is more difficult, redundant inventory will be where to go?
1. Deep binding with suppliers
The outbursts have made relations between factories and cross-border sellers tricky. Some sellers would rather not deposit, also want to cancel the original order signed with the factory, the factory can only face a pile of production inventory staring, capital chain is difficult to operate. One factory revealed that it is not daring to accept orders from cross-border e-commerce companies, especially Amazon. No one knows when their shop will be closed. If they accept orders, they will lose money in case of an accident. In the future, the collaboration between the factory and the seller would be better to reach an alliance, similar to the Nan Ji Ren model. The approach of Nan Ji Ren is to take the factory as its interest alliance, the Nan Ji Ren control the core of the brand, the factory and Nan Ji Ren people fight together, there is no question of who exploits who. This can effectively prevent the order production cycle by a number of relationships to jump the queue and elongated, resulting in a shortage of embarrassing situation. Many big brands have specialists who liaise with suppliers to ensure information about order progress is kept in sync. It is necessary for Amazon sellers to know the production, transportation and arrival time of products. Respect and proper communication will be of great help to sellers. Sellers and suppliers can further understand each other and fix the delivery time to some extent.
2. Stock up on 60 days worth of stock In any case, sellers should keep inventory for about 60 days to avoid embarrassment caused by inventory shortage. Sellers can predict sales volume by checking Amazon inventory report and monitoring sales rate. The FBA sales rate is calculated based on inventory levels and product sales. Calculation method : (product sales in the past 90 days + order delivery) ÷ the number of FBA inventory units in the same period. Sellers can see the sales rate for each item on sale in the Inventory Age area of the Inventory dashboard in the seller center. A sales rate of more than 7 is considered a good show, which means sales are seven times the average inventory. If the sales rate is below 1, it means more inventory has been held than sold in the past 90 days.
3. Reduce tedipus inventory
If a seller overestimates how much a product will sell, there are several ways to relieve inventory pressure:
With promotions. Sellers can reduce inventory pressure by adding coupon codes, offering two-for-one deals, or offering deep discounts. Even if the seller is making a loss, if the product is sitting in a warehouse for a long time, the effort will be much greater than selling it cheaply.
Improve keyword bidding. Whether the seller is willing to spend money on advertising, have to admit that advertising is to increase product exposure, drive product sales of the most immediate method, improve the target keyword bidding products to seize good exposure "pit", so as to better realize the purpose of inventory.
Create a removal list. If a seller has a place to store items for sale other than their Amazon FBA warehouse, the seller can choose to create a removal order at the seller center and move the inventory to that location before being charged a large storage fee. Amazon sometimes runs promotions and offers to transfer inventory for free.
Clearing inventory. Clearing inventory is usually a last resort, and if all else fails, then the seller can try to sell any remaining inventory at a deep discount. This will allow sellers to regain liquidity to invest in better products
Donating unmarketable products. Sellers can also choose to donate the product to a charitable or nonprofit organization, such as Goodwill, for a tax deduction.
4. Prepare for emergencies
The epidemic has caused delays in logistics, transportation and customs clearance of products. According to statistics, 53% of American consumers have begun to feel that their online shopping experience has declined due to the unstable status of products in stock since March 2020. That requires sellers to start stocking extra goods, or even use third-party storage centers, to avoid the embarrassment of running out of stock if orders are delayed. Of course, if sellers have limited funds, it's best to stay put.
Inventory Manager is a market demand forecasting tool designed to calculate Inventory requirements for seller Amazon's FBA business. The tool will predict future sales based on demand, which will help sellers determine inventory to avoid shortages or overstock.
3. Reduce tedipus inventory
If a seller overestimates how much a product will sell, there are several ways to relieve inventory pressure:
With promotions. Sellers can reduce inventory pressure by adding coupon codes, offering two-for-one deals, or offering deep discounts. Even if the seller is making a loss, if the product is sitting in a warehouse for a long time, the effort will be much greater than selling it cheaply.
Improve keyword bidding. Whether the seller is willing to spend money on advertising, have to admit that advertising is to increase product exposure, drive product sales of the most immediate method, improve the target keyword bidding products to seize good exposure "pit", so as to better realize the purpose of inventory.
Create a removal list. If a seller has a place to store items for sale other than their Amazon FBA warehouse, the seller can choose to create a removal order at the seller center and move the inventory to that location before being charged a large storage fee. Amazon sometimes runs promotions and offers to transfer inventory for free.
Clearing inventory. Clearing inventory is usually a last resort, and if all else fails, then the seller can try to sell any remaining inventory at a deep discount. This will allow sellers to regain liquidity to invest in better products
Donating unmarketable products. Sellers can also choose to donate the product to a charitable or nonprofit organization, such as Goodwill, for a tax deduction.
4. Prepare for emergencies
The epidemic has caused delays in logistics, transportation and customs clearance of products. According to statistics, 53% of American consumers have begun to feel that their online shopping experience has declined due to the unstable status of products in stock since March 2020. That requires sellers to start stocking extra goods, or even use third-party storage centers, to avoid the embarrassment of running out of stock if orders are delayed. Of course, if sellers have limited funds, it's best to stay put.
5. Slow down the delivery of products
If a product is out of stock, sellers can reduce orders by raising prices and suspending advertising campaigns, which is a good way to maintain inventory rates. Even if slowing the shipment of products slightly affects the ranking, it's better than running out of stock altogether. Once the product is in storage, the price and advertising campaign can be restored.
6. Use inventory management software
Inventory Manager such as Jungle Scout's will do a great job of helping sellers manage Inventory and mitigate the risks mentioned above. Inventory Manager is a market demand forecasting tool designed to calculate Inventory requirements for seller Amazon's FBA business. The tool will predict future sales based on demand, which will help sellers determine inventory to avoid shortages or overstock.
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