One of the most crucial parts of Amazon‘s reselling is its inventory management. And one can clearly understand the significance of Amazon Inventory Management because, in the third quarter of 2017, approximately half of Amazon sales were from third-party sellers.
Inventory Management Tips for Amazon Resellers
The success of Amazon’s business depends largely on its inventory management for the following reasons:
- Inventory management will help reduce losses due to mismanaged storage, employee theft, or manual errors.
- Inventory management will help check losses due to spoiled or perished goods by tracking the selling dates.
- It will help to manage inventory well, reducing the storage cost and preventing losses due to money that gets idle in unsold goods.
- It will help to maintain the requisite stock so the customer is not often disappointed by products running out of stock.
Inventory management doesn’t necessarily have to be a tedious task always. If the following tips are used, better Amazon inventory management can be achieved easily.
Tips for Amazon Resellers to Improve Inventory Management
Use good inventory management software.
Using good inventory management software is a great way to improve inventory efficiency and eliminate any discrepancies that may arise when manually tracking the inventory or the documents that are both time-consuming and inefficient. Retailers using inventory management software such as Amazon Seller Central have reported an almost 40% increase in inventory efficiency. Not just the right inventory management software but using proper accounting software can help a business survive well in the market. Their use has several advantages, such as the safety and security of data, financial updates from time to time, and a lot of saved time. Some GST accounting software will make your account handling a cakewalk.
Set a minimum level for inventory.
Setting a minimum inventory level will help the seller ensure that the product never runs out of stock and the customer does not get a reason to go to the competitor’s line of products. Having a consistent inventory number also does not put one under pressure to decide an appropriate time to send to the supplier.
Always order well in advance.
As an Amazon reseller, ensure that you never wait to place your next order or always order all your products well in advance. Even if you have just received a new order and started selling your products, placing your next order with the supplier is wise, considering it can take almost 30 or more days to manufacture and ship it to you.
Organize regular audits of your inventory.
An inventory audit for a company is probably the most challenging task ever as it takes away a lot of time and is also quite labor concentrated. But if regular inventory audits are organized weekly or monthly, a much more accurate account of the stock is made available to the seller. Such audits will give a much more accurate stock account, reduce irregularities, and give a fair idea of the size of the next order. Hence including one of the basic features of order management software.
Always have a plan ready for any eventuality.
A successful Amazon Business depends largely on an efficient inventory management system. So, having a contingency plan to take care of any eventuality concerning the inventory only makes sense. How well one handles such contingencies will decide how quickly the business recovers from the damage.
Figure out the Inventory Turnover Rate of your business.
A business’s Inventory Turnover Rate is how fast the products are sold. If one figures out the Inventory Turnover Rate of the Amazon business, it gets simplified to determine the level of stock one must always maintain. It is a great way to avoid over-buying or under-buying products and thus avoid losses incurred due to faulty inventory valuations.
Forecast tools, such as the Amazon Selling Coach, can track sales trends and determine the quantities that must be maintained to complete orders.
As an Amazon Seller, it is imperative to maintain the right inventory levels to stay in the competition and, thus, the importance of Inventory management. To put things into perspective, according to research, free 2-day shipping is the number one reason individuals choose to become prime members. So, as an Amazon seller, investing in Inventory Management is the least you can do.
Sharad Bhardwaj is a content analyst at SoftwareSuggest. He loves to advise and help people. He likes participating in sports activities and listening to music in their leisure time. You can find him on LinkedIn and Twitter.