Director of Growth Marketing
Here's how to recognize any major issues with your Amazon inventory before they start to affect your FBA business.
From a faulty supply chain to leaks in your Amazon inventory management system, there are plenty of ways that your FBA business can lose profits throughout the fiscal year. The reality is that inventory issues in ecommerce have evolved over the past few years, and this has undoubtedly changed the profit-making game for professional sellers like yourself.
According to this research from Adobe, ecommerce shoppers saw a 250% increase in 'out of stock' messages in 2021 compared to early 2020, in pre-pandemic times. What are some of the leaks in the supply chain and inventory management flow that lead to a customer getting an out of stock message? The answer is: a lot. And with Amazon Prime being the name of the game, online shoppers are prioritizing efficient (and speedy) delivery more than ever before. These are important things that all Amazon FBA sellers should be aware of.
But when there's a problem, there's almost always a solution. Management in life – and in business – is all about balance and awareness, so keep that in mind when planning out your latest Amazon inventory management strategy. Even if you currently have an efficient management system working well in your FBA business, it's always a good idea to be aware of any potential issues that could arise. Just like the product listings in your Amazon storefront, you have to constantly keep this part of your business optimized.
When revamping your Amazon inventory management, you must consider each step in the process. From procurement to manufacturing to the item arriving at your customers doorstep, you want each step in the inventory management process to go well. It's all connected, after all. One leak in the system can eventually lead to a loss of sales and your profits on Amazon.
To clarify, this blog post will focus on the beginning to end of your Amazon FBA inventory management process, from item procurement to the final product delivery (and hopefully, a rave customer review to follow!).
So, are you ready to up your inventory management game?
Here are some of the most common inventory management issues that FBA sellers face, including surefire solutions that will help to keep your Amazon business running like a well-oiled machine.
What happens if your supplier suddenly goes MIA? Not choosing the right supplier is one of the most common Amazon inventory management mistakes you can make as a professional seller. A solid supply chain is the base of your inventory management system, so you have to start off on the right foot by picking a good supplier.
Work to cultivate A+ communication with your suppliers and you’ll run less of a risk of a sudden break in the connection if your supplier can’t deliver. We outline this here in our blog post on the importance for FBA sellers to prepare for supply chain issues in 2023. Source the goods for your products from a place that you trust and you’ll avoid big inventory management issues down the line.
With everything moving so fast nowadays, not to mention the pressure that Amazon FBA sellers face to keep up with increasing demand and the speed with which to deliver, quality control of your inventory can sometimes get overlooked. While it’s not typically at the top of the priority list for Amazon inventory issues, it’s still an important one.
Sending a product that is not up to standard can lead to negative customer reviews, and this can really bring your product ranking down, affect your metrics, and the list goes on. One solution to this issue is to be transparent as possible and be available to your customers. Get back to basics. There’s so many moving parts in this business and it’s essential for professional sellers to maintain their focus on these (what might seem like) little details if they want to stay at the top of their game.
To stay efficient and to keep your Amazon business running, you have to plan for success throughout the year. Not planning for growth when a new business opens their Amazon store is one of the main reasons why many first-time sellers fail in the first 90 days.
Planning for your Amazon business to grow means focusing on your inventory management and making sure that it’s optimized for success.
Amazon PPC ads for growth: Not sure what planning for business growth looks like in the ecommerce space? One thing you can do is to invest in a tool that will optimize your inventory management. Based on your best selling products and using data-driven technology, Mayan’s advertising optimization tools sync your product performance with your ad budget, so that you don’t have to worry about any wasted ad spend.
Another major Amazon inventory issue you want to avoid! Not keeping track of your sales velocity can result in sudden inventory stockouts. This will automatically hurt your PPC ad campaigns, get you negative reviews on your product listing page, and you’ll lose profits.
Solution: FBA sellers should cultivate a quick low-demand strategy for the product, which will help to avoid any inventory stockouts. What this looks like: Decreasing your ad bids for that product, optimizing the page to remove any promotions, coupons, or anything that helps the product sell well. This blog post has some tips on optimizing your PPC campaigns when you have low inventory.
Don’t make the mistake of not planning for demand. Part of preparing your Amazon business for success is to consider any major increases in your product demand, and this translates as proper inventory forecasting.
A good place to start is to get your Amazon holiday calendar in order at the beginning of each year and make sure your business is on track during these 365 days. Check which holidays (including Prime Days and Black Friday) will typically bring in the most demand for your products and plan accordingly. Some holidays might not be as successful as others, but that’s okay. If your inventory is managed properly (and is aligned with your advertising strategy), your products will have the best chance to sell.
Dealing with excess inventory - overstocking - is the flip side of suddenly running out of stock. Isn’t that always the way? While this major Amazon inventory issue tends to be a common occurrence, what matters is how you respond to the problem.
There’s a few things you can do to quickly get rid of any excess inventory before you really rank up those extra FBA warehouse storage fees. You can: do a price reset and put your products at much lower prices, sell your excess Amazon inventory to liquidation companies, or create an Amazon removal or disposal order.
Another major issue that Amazon FBA sellers typically face is not choosing the right inventory management software for their business. Don’t let this happen to you! Choosing the best tools that will work for your business and its unique demands will be an essential part of your success as a seller.
Fixing these issues should all be a part of your winning Amazon inventory management strategy. From preventing sudden inventory stockouts and the importance of choosing the right supplier, knowing what these common problems are and dealing with them quickly and efficiently will save your business lots of time and money. Ready to get started?