Quick Insights Into Inventory Management for Amazon

Are you an Amazon seller? If yes, these are some of the most popular marketing factors that you might have given importance to ensure the growth and success of your business – Amazon Rankings – Product listing Optimization Ad Campaigns.  

Every Amazon Seller wants the products to be ranked on the top of the Amazon search results page to increase the product’s visibility and boost sales. While many factors do help achieve the rank, Inventory management is one of the important factors that play a crucial role in the success of your business.

Effective implementation of Inventory Management ranks your products on the top search results and raise your revenue.

What is Inventory Management and Why is It Important for Amazon Sellers?

Inventory management is all about monitoring the product’s weight, size, quantity, supply, and keeping track of the stocked goods from time to time based on the demand.

It’s not just stocking and tracking the goods but building an efficient strategy focused on customer satisfaction and optimum level of inventory that helps in the growth of your business.

Maintain the optimum level of inventory – Save the Costs

Ensure that your inventory is not too high or not too low. Too high inventory may result in dead or spoiled stock and unnecessary costs on the rent of occupied space. Too low inventory may result in late delivery to the customer that may lead to bad reviews affecting your sales.

Inventory Management – Customer Satisfaction

The expectations of customers today have reached great levels. You can build the trust of the customers with the timely delivery of your products.

Amazon users have become accustomed to one or two-day delivery and to meet their expectations, you need to make sure that the products are ready for shipment and reach the customers on time.

Timely deliveries also lead to positive feedback and increase the ratings of sellers, thus boosting sales.

Advantages of Inventory Management

  • Improves Amazon Search Rank
  • Increase Customer Satisfaction
  • Boost sales
  • Saves money

How Inventory Management impacts Amazon Search Rank?

Amazon’s algorithm relies on several factors to rank a product listing on the search results page. Two important factors related to Inventory management that affect the Amazon Search Rank are

Product Availability

Typically, if your products are out of stock for a long time, they do not show up in the Amazon Search Results. Users do not wait for your products if they are out of stock. They just go to other competitor products to purchase.

Similarly, if your products are frequently found out of stock, your listing likely gets knocked down in the Amazon rankings, even when your products are available.

Positive customer experience is necessary to avoid losing sales, your product’s organic ranking as well as your Ads visibility.

Reviews and Ratings

Every review on your product, whether positive or negative, counts in a product’s ranking. Product availability has a direct impact on the reviews and rankings.

Continuous feedback on a product from the customers is vital for an Amazon seller, as it boosts search results. Moreover, fresh reviews that specify the benefits of the products attract more customers and increase conversion rates. 

No inventory implies no new product reviews from the buyers which in turn implies no sales, thus directly affecting the product’s visibility in the Amazon search results.

How to effectively manage Inventory?

Effective inventory management is the key to ensure the smooth running of your business. Keeping track of stock is no easy task.

You need to be mindful of Inventory management, as it can make or break your business.

Here are 6 tips for effective Inventory Management

Plan and Prioritize

Prioritize your inventory based on the demand of the products. This helps you to understand what products to be ordered or manufactured more frequently and fulfil customer’s needs continuously.

Analytics can help you plan your business and inventory management more efficiently. You can plan for seasonal sales fluctuations, forecast the demand of products, identify the trends, monitor the cost, estimate the profits, and concentrate on the shipments and products that require immediate attention.

Avoid Dead and Spoiled Stock

Deadstock is the inventory that doesn’t get sold and has been stored in the warehouse for an extended period.

Spoiled stock is the stock that may have reached the expiry date or defective products that do not meet the intended specifications of the customers.

A huge quantity of either of the dead or spoiled stock harms your business in many ways.

  • Invades valuable warehouse space which could have been used to store high demand and revenue-generating products.
  • Drop in the sales of a product.
  • Unnecessary wastage of money on storage and maintenance of products that are not profitable anymore.

Therefore, maintaining a steady level of inventory on Amazon is a crucial piece of a business’s profitability.

Keep an eye on your Inventory turnover rate

Inventory turnover is the number of products you sell in a given period. How fast the inventory sold is the Inventory Turnover rate.

A high inventory turnover rate indicates strong sales which suggest you promptly replenish the products of high demand and keep track of the stock.

Inventory Turnover Rate is important to estimate the amount of stock you need to order to maintain the stock levels.

Use Inventory Management Software

It’s a common fact that most of the Amazon sellers to date, use documents or spreadsheets to keep track of their inventory. Though this could work for small businesses with small inventories, it is time-consuming with a high margin of error and inefficient in the long run.

Inventory management software automates different aspects of inventory management with more accuracy and efficiency. It allows you to manage shipments and returns and interact with customers easier than ever.

It also helps to keep track of inventory levels in real-time so that you can map the trends to determine required inventory levels for your products over different periods, which is a key to making sound purchasing decisions.

Make Use of Real-time Analytics

Real-time analytics of your business is a great way for effective inventory management. It helps you to stay up to date on your stock’s selling performance and many other factors.

It helps you to monitor the traffic to your product listing and track the customer behaviour at all times and identify the products of the highest demand so that you can handle the inventory without being overstocked or out of stock.

Monitor and Analyze Supplier Performance

An excellent seller-supplier relationship is essential for the success of a business. Clear and proactive communication with your supplier goes a long way.

Let your supplier know the demand for your products beforehand so that they can ensure the timely supply of your stock and avoid the last-minute rush.

If your supplier is unreliable, he can mess up your stock with late deliveries, which impacts your sales. Discuss the issues and address them as soon as possible before they impact your relationship with the supplier and impact your business. 

The Bottomline

Your success as an Amazon seller ultimately depends on your customer’s satisfaction and timely delivery. With a proper and reliable inventory management system in place, you can plot an effective strategy to reduce the costs and boost your sales.

Did you realize the importance of Inventory management for your business?

Now, it’s time to implement the right inventory management techniques to survive on the highly competitive e-commerce platform – AMAZON.

If you need any professional help for your Amazon store management, get in touch with us at amz@fabongo.com.
Fabongo is a Vancouver, British Columbia based agency providing human resources to manage all things Amazon marketplace.


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