One of the most crucial parts of Amazon reselling is actually its inventory management. And one can clearly understand the significance of Amazon Inventory Management by the fact that in the third quarter of the year 2017, approximately half of Amazon sales were from third-party sellers.
The success of Amazon business depends largely on its inventory management for the following reasons:
- Inventory management will help reduce losses arising due to mismanaged storage, employee theft, or manual errors.
- Inventory management will help check losses that arise due to spoiled or perished goods by tracking the selling dates.
- It will help to manage inventory well, which will reduce the storage cost and also prevent losses that occur 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 to eliminate any kind of discrepancies that may arise when manually tracking the inventory or the documents that are not just time-consuming but also 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 to survive well in the market as well. Their use has several advantages such as safety and security of data, financial updates from time to time, and a lot of saved time. Some of the GST accounting software will make your account handling, a cakewalk.
Set a minimum level for inventory
Setting a minimum level of inventory will help the seller to 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 of deciding an appropriate time to send in the order to the supplier.
Always order well in advance
As an Amazon reseller, ensure that you never wait to place your next order or that you always order all your products well in advance. Even if you have just received a new order and started selling your products, it is a wise decision to place your next order to the supplier, considering the fact it can take almost 30 or more days for your supplier to manufacture and ship that product to you finally.
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 accurate account of the stock is made available to the seller. Such audits will give a much more accurate account of stock, reduce the irregularities, and give a fair idea of what should be the size of the next order. Hence including one of the basic features of an order management software.
Always have a plan ready for any kind of eventuality
Having a successful Amazon Business depends largely on having an efficient inventory management system. So, it only makes sense to have a contingency plan that can take care of any kind of eventuality that may arise with respect to the inventory. How well one handles such contingencies will actually decide how quickly the business recovers from the damage.
Figure out the Inventory Turnover Rate of your business
The Inventory Turnover Rate of a business is actually how fast the products are sold. If one figure out the Inventory Turnover Rate of the Amazon business, it gets simplified to find out the level of stock that one must maintain at all times. It is a great way to avoid over-buying or under-buying of products and thus avoid losses incurred due to faulty inventory valuations.
There are also forecasts tools such as the Amazon Selling Coach that can be used to track sales trends and figure out the quantities that are necessary to be maintained for the completion of orders.
As an Amazon Seller, it is imperative to maintain the right levels of inventory in order 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 that you can do.
Sharad Bhardwaj is a content analyst at SoftwareSuggest. He loves to advise and help people. In leisure time he likes to be involved in sports activities and listening to music. You can find him on LinkedIn and Twitter.