It’s common for brands to take off when they start selling on Amazon. With 300 million active users, countless opportunities exist to reach new people and promote your company’s products if you use the platform. However, this unexpected success can throw off your future inventory plans.
New Amazon sellers don’t have an accurate picture of how much inventory they need to keep in stock, so it is common to regularly run out. However, if you can’t fulfill your customer orders, your Amazon rankings will decline and you’ll lose future chances to make sales.
With a set of tools and a great strategy, it can be easier to create and understand your Amazon seller inventory management needs—even in the beginning when your sales amounts are relatively unknown. Inventory management tools help predict how much inventory you need, the best time to reorder, and how to also minimize stock to increase cash flow. Learn more about the best tools to manage inventory on Amazon as well as tips and strategies to maintain that inventory and become a top seller.
What Is Amazon Inventory Management?
Amazon inventory management is the process Amazon sellers use to manage their inventory for their Amazon store. It involves:
- keeping track of current inventory
- forecasting how many products are expected to sell in the future
- optimizing inventory levels to meet current demand
Sellers that don’t manage their inventory well will have difficulty serving their customers. Running out of stock means you miss sales and offer a poor customer experience. On the other hand, if you stock too many products, you’ll spend more on warehouse space.
Inventory management helps sellers find the perfect balance between having enough stock to fulfill demand and not ordering too much inventory, which can waste resources and affect cash flow.
The Importance of Amazon Inventory Management
Getting products to customers quickly is essential in today’s online eCommerce space. Customers expect quick delivery times—and if you can’t provide that level of service, you risk losing customers to your competitors.
Inventory management will help you fulfill shipping times and keep customers. But there are other benefits to optimizing your inventory management strategy and processes as well.
Avoid Running Out of Stock While Waiting for New Items
Having long lead times can be a killer for businesses. Some suppliers will take weeks to send your supplies—and if you handle some of the manufacturing process yourself, you’ll need to wait even longer to have new products ready to ship.
This means you may have an extended period where you’re out of stock in your store if you haven’t planned ahead for longer lead times. And if Amazon believes that your store has problems keeping items in stock, the A9 search algorithm may devalue your listing and promote other products that keep a good stock level.
Meet Sales Demand
An Amazon seller inventory management strategy is vital to meet fluctuating consumer demand. If you have a slow-selling product, you’ll want your inventory management amounts to be cost-effective but available for when you do get sales.. But what happens if your company gains more exposure and starts selling more products?
In high-growth periods due to marketing campaigns that gain unexpected success or a new trend that shifts demand toward your product, stocked inventory is key. If you don’t have a handle on your inventory, all the time and money you used to gain that exposure won’t be effective. Instead, consumers will get to know your brand as a company that runs out of products and can’t meet expectations.
Avoid Excess Inventory and Restrictions to Cash Flow
If you’re concerned about running out of inventory, you may experience the temptation to buy a lot of excess stock and put it in a warehouse. Although this does reduce the chances of running out of stock, it also presents another problem.
Holding too much inventory ties up cash in warehouse storage and in the product that you may not get back quickly. It reduces your cash flow—which hurts your ability to invest in other growth avenues for your business.
Collect Data About Selling Trends
If you have adequate stock for your product at the moment—that’s great. But do you know how much of each product you’re selling and which produce the best profit? And do you know how to plan ahead so you don’t advertise stocked items to customers if you don’t have them?
Inventory management isn’t only about supplying the actual product; it also includes understanding the performance data for your items, so you know which ones you want to advertise and invest more in. Since you know these products sell well, increasing promotion and stock levels is less risky.
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Using Helium 10’s Amazon Inventory Management Software
If it sounds a bit overwhelming to develop an inventory management strategy for your new Amazon store, you’re not alone. Most Amazon sellers don’t have time to monitor and optimize their inventory.
One of the problems with managing inventory manually is the risk of error. You’re relying on yourself or your staff to enter information correctly and to update stock when things change. Even if you have a talented team, that doesn’t mean they will never make mistakes.
The best way to avoid this problem and streamline your Amazon shop is to use inventory management software to handle the heavy lifting. Helium 10’s inventory management software is an Amazon product that allows store owners to manage their inventory in one central location and streamline their processes.
There are so many benefits to using an Amazon FBA inventory management software program like Helium 10, including:
- It saves time: Investing in seller inventory management software will automate much of the manual work. This means you can focus on higher-priority tasks that will help push your Amazon business forward.
- It has better accuracy: Human error is inevitable, even with the best staff. Small mistakes can eventually lead to more significant issues when you don’t address them. Investing in inventory software will remove the chance of entry errors. You can rely on software to accurately track information to ensure you have the best data to make decisions.
- It provides great data visibility: A big benefit of using a software program to manage inventory is having all your data in one place. You aren’t relying on individuals to gather data in spreadsheets. Instead, you can log into your inventory management portal to see and build reports about what’s happening with your inventory and gather valuable insights that help you make better business decisions.
- It easily manages reorders: You have to pay constant attention to your inventory levels when managing it manually, so you can put in a purchase order on time to refresh your stock. With inventory management software, you can automate that process by applying rules to your inventory system to send purchase orders on your behalf.
- It offers accurate inventory predictions: Since you collect so much data in your inventory system about the historical performance of your product, the software provides a lot of ways to see how it performs over time. You can see how well your products perform at each point of the year and if any products are doing better today because of your marketing efforts.
One of the things that makes Helium 10 one of the best Amazon inventory management software options is that it encompasses all of the benefits above plus ease of getting it up and running.
Helium 10 is one of the most powerful All-in-One Amazon seller tools on the market today.
How To Set Up Helium 10
The first step to using the Helium 10 Amazon inventory tool is to sign up for an account on the website. Once you sign up, you’ll have access to a dashboard for managing your account.
Helium 10 offers sellers the ability to connect directly with their Amazon dashboard. If you aren’t currently connected, you’ll see a notification at the top of your dashboard directing you to make the connection. Once done, you can use Helium 10 to manage your Amazon stock.
Once you connect your Amazon account and can read your stock levels, you can use Helium 10 to order stock and create POs.
To create a PO in Helium 10:
- Enter the purchase order or restock suggestion screen and create the new purchase order
- Enter your order name, order type, packaging type, supplier, and estimated arrival date on the popup
- Add the SKUs to the order
- Confirm the order and export an Excel sheet or PDF to send to your supplier
Once you confirm the order with your supplier, you can transfer it to your Amazon FBA storefront by creating an inbound shipping request.
To create an inbound shipping request in Helium 10:
- Click the “Create inbound to FBA” button on the purchase order section from your generated order
- Enter the order name, packaging type, supplier, and estimated arrival date
- Confirm your shipment
- Log into your Seller Central account to confirm the order
One of the best features of Helium 10 is that you can easily view reorder suggestions and decide if you want to place the order or not. This helps you optimize your stock on Amazon and avoid overordering.
To see reorder suggestions in Helium 10:
- Find the feature in the restock suggestion section of your dashboard
- View your dangerously low stock levels, recommended items to reorder, and each item’s estimated remaining stock levels
Helium 10 also gives you insights into your inventory trends by examining how much you sell during each part of the year. You can accurately see your sellthrough stats and the minimum stock you should always keep in the warehouse.
- These insights in your reports will help you understand the best times to order and the proper amount to keep in stock.
While you can get many insights from the Helium 10 inventory dashboard, you may also want to export your data for use in other tools.
To export data from Helium 10:
- Simply load up the information you want to view
- Once you load the information grid, select the “export” option in the list of actions available
- You can export your results to Excel, CSV, and PDF formats
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Other Amazon Inventory Management Tips
When learning how to manage your inventory on Amazon, it isn’t always enough to know the basic functions of your inventory management software. There are a few more tips that top-sellers on Amazon use to keep items in stock and eliminate items that don’t sell well.
Stay Tuned Into Seasonal Needs and Sales Trends
Understanding sales trends is vital for keeping the proper inventory in stock. For different verticals, such as gardening, you won’t sell as many products during every season of the year.
Understanding these trends will help you analyze the information in your inventory management system through the lens of seasonality. You’ll know how to double check the reorder suggestions during times when your product just won’t sell much. This will free up cash flow for other projects until you return to your industry’s busy seasons.
Be Prepared for Supply Chain Issues
The supply chain can be one of the most unpredictable parts of your business. Things can work great for a long time, and then out of nowhere you’re hit with unexpected shipping problems that lead to delays.
Supply chain issues can present themselves in a number of different ways:
- Manufacturing delays
- Transportation delays
- Price fluctuations
- Raw material shortages
- Discontinued products
It’s important to understand all of these problems and develop solutions and backup plans for each one. If you don’t have other options to secure your inventory, you’ll struggle to get new products for your customers if an issue arises. Finding alternate vendors for your items can ensure that you have multiple ways to get them if one vendor becomes delayed or stops making the product. If the shipping transportation for your product is delayed, develop a plan to communicate that information to your customers and offer discount incentives.
Have a Plan for Products You Will Discontinue
As time passes, you may find that a product doesn’t perform as expected. Based on your inventory management tool’s suggestions and your own analysis, you’ve decided it doesn’t make sense to order this item again when you run out of current stock.
Once you finally decide to pull the plug on an item, you’ll need a way to get rid of the rest of your stock so you can free up space for new items. You can do this by running discounts, bundling the item with other products, or donating it to a charity.
Slow Sales if You’re Running Low on Inventory
Even the best planning won’t help you in every situation. You can run into unexpected issues with suppliers or see a sales trend that doesn’t line up with your normal inventory orders.
If you want to avoid running out of stock and hurting your Amazon rankings, think about slowing sales during these unexpected times. You can do this by raising prices, slowing marketing, or increasing your shipping time. Only use factors that you can quickly change back when you get enough inventory in your warehouse again.
Communicate With Suppliers
Staying in regular contact with your suppliers can help you avoid unexpected problems. Work to understand their challenges and if they foresee any problems that will cause issues in getting products in on time.
It’s also important to communicate your needs. Let them know what lead times you require and learn more about what shipping times to expect now (and in the future).
Sign Up for Helium 10 To Manage Your Amazon Inventory
Helium 10 is one of the top Amazon inventory management tools available for Amazon sellers. It offers all the tools sellers need to manage your product listings, optimize Amazon PPC ads, and optimize stock and inventory for the platform.
Allow Helium 10 to be your partner in Amazon selling success. Sign up for a free trial today and test how it works for your Amazon business.
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