As an Amazon seller using Fulfilment by Amazon (FBA), one of the most important aspects of your business is managing your inventory levels. You want to avoid having too much or too little stock in Amazon’s fulfilment centres. Here are some tips and strategies for sellers to help keep just the right amount of FBA inventory.
Forecasting Sales and Demand
The starting point for good FBA inventory management is having an accurate sales and demand forecast. Look at your historical sales data in Amazon to estimate future demand. Factor in any seasonality, promotions, and product lifecycles. Sales velocity tools can automate this forecasting. With an estimate of future sales, you can plan your inventory needs accordingly.
Set Ideal Stock Levels
Once you have a sales forecast, determine ideal stock levels for each product. Consider your lead times and how long it takes to replenish stock. As a general rule, you want at least two weeks’ worth of inventory to avoid stockouts. Also, factor in variability and spikes in demand. Setting minimum, maximum, and reorder points for each product ensures you have enough inventory to meet sales, while not going overboard.
Monitor and Track Inventory Levels
Ongoing monitoring of your inventory levels is key. Use FBA tools to regularly check stock levels across Amazon’s fulfilment centres. Watch for low stock on high-velocity products. Be ready to order more from suppliers before you run out. Also, track products that aren’t selling and consider repricing or removing them from FBA. Many brands find monitoring and tracking inventory by themselves to be a difficult task to handle, so they use solutions that provide Amazon Brand Management or other marketplace management systems. This helps them understand what and which stocks they currently have and update them respectively.
Use an FBA Prep Centre
Using a prep and shipping centre can help UK sellers easily scale their FBA business. These centres receive your inventory, prep and label it to Amazon’s requirements, then ship it directly to Amazon’s FBA warehouses for you. Working with prep365, your premier Amazon prep centre in the UK, saves time and ensures your products get to FBA efficiently.
A good prep centre will also provide inventory management services. They can store a buffer stock of your top products to quickly replenish Amazon as needed. And they’ll consolidate shipments across your product range to reduce FBA check-in fees.
Optimise Replenishment Time
Look for ways to reduce the time it takes to replenish your FBA inventory when needed. Using local suppliers and manufacturers will significantly decrease your lead times versus sourcing internationally.
Multi-channel fulfilment software can automatically create restocking purchase orders when inventory gets low. Fulfilment centres with warehouse space can house buffer stock for faster replenishment.
Improving replenishment times means you can keep less excess stock in FBA but still avoid going out of stock between shipments.
Rotate Seasonal and Promotional Products
Manage SKU churn in FBA by regularly rotating your catalogue. Remove slow selling products in favour of faster selling options. Plan seasonal inventory switches – don’t let winter coats clog up your FBA space in summer.
Promotional products and limited editions can be cycled through FBA to keep stimulating sales. Just be careful not to overstock on temporary spikes in demand.
Analyse Sales Data and Trends
Make full use of Amazon’s analytics to gain insights into what’s driving your sales and how inventory levels are impacting this. Identify your top selling SKUs to prioritise stock levels. Look for rising stars where demand is strong but inventory can’t keep up.
Following these tips and strategies will lead to a lean, efficient FBA operation.
