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Amazon Inventory Management Pains

With Amazon inventory, there can be a lot of problems, and those issues may last for months before anything is figured out. This article examines 3 significant challenges you may encounter, as well as how to address them.

The problem of running out of inventory is a nightmare, since people are used to convenience on Amazon and therefore won’t purchase items that are out of stock. If you do this, your keyword rank will drop dramatically, as will your Best Seller rank, and your revenue will drop dramatically. Out of stock customers turn to competition, and they leave positive reviews for their competitors, whereas your company receives negative reviews from out of stock customers.

Another option is to over order in place of not having enough inventory on hand. Having excess inventory collects dust in warehouses and costs you storage fees that could be better spent on promoting a new product launch, developing marketing campaigns, and upgrading your manufacturing process.

The following are 3 common problems with Amazon inventory management, along with a few possible solutions  like  inventory management software

Management of the supply chain is inadequate

There is no such thing as disappearing products that are re-appearing somewhere else. Keeping their safety in mind during the transfer requires them to be handled swiftly, carefully, and efficiently. Without an effective supply chain management program, your product quality and availability will suffer, your buyer relationships will be at risk, and your resources will be stretched thin.

You should keep an eye out for two main things:

  • Mistakes made by suppliers

It’s not unheard of for suppliers to be unreliable, and issues with the manufacturing process can cause an insignificant issue to snowball into a complete shutdown. It can cause disaster for suppliers (and their buyers) when this occurs, and they are not prepared for the situation. Rifts can result in long-lasting issues between buyers and suppliers due to resentment.

  • Inefficiency in the process

It doesn’t necessarily mean that a supply chain is running optimally, simply because it is adequately functional. In the absence of periodic review and revision, your supply process is likely inefficient, and it might not be noticed because your supplier is complacent and doesn’t care. Consider every step in the chain: are you getting the best results you can?

What are some ways in which you can optimize supply chain management?

First, make sure that your supplier is transparent. If they don’t tell you the steps of their production process, then you won’t be able to provide suggestions for improvement or determine how likely delays are.

Learn what goes into your product by reviewing your manufacturing process. Allow your suppliers a reasonable period of time to produce your goods, and measure the time between the time you contact them and when it leaves the warehouse. Identify inefficiencies within the process and work to eliminate them.

It’s not a good idea to wait until you are out of inventory to discover these inefficiencies. Waiting too long will mean that you will not be able to deliver the products on time, which will negatively affect your reputation. Simply a few negative Amazon reviews can put businesses at risk.

  • Running out of stock

Online businesses are particularly affected by running out of stock, as noted in the introduction. Online shoppers can go to a different store and find what they want, as opposed to offline shoppers who might return at a later date.

There are several reasons why you may find yourself low on stock: 

  • >Not monitoring all outlets for sales

Amazon isn’t the only way to list your products, so you may also list them through other sites. If you can’t determine how to distribute your stock evenly between multiple sellers, you may be facing a problem.

You run the risk of seeing your inventory run dry much sooner than you expected if you forget one of the outlets, and it sees an unexpected and major influx of orders. If you want to avoid this, all your inventory should be factored into the sales you run, regardless of the outlet. Monitor everything you have be it is overstock inventory or out of stock inventory and address them accordingly and timely. 

  • Sales get out of hand

It’s a good thing to sell as many things as possible, but moving too quickly may result in difficulties. It seems that there must be a balance between offloading stock as quickly as possible and avoiding the issues that come with running out of stock completely?

  • Not factoring in holidays or seasons

In general, sales increase during certain times of the year, especially around holidays and seasonal changes. Gifts are given to mark the passage of time, celebrate special occasions, and get their hands on new products (as well as older ones soon going away). Be sure to stock up based on the calendar.

Make sure you are aware of international holidays as well if you ship internationally (which Amazon does quite a lot). Popular holidays like Chinese New Year and Ramadan are sure to spike sales.

What can you do to prevent running out of stock?

Your first step in decreasing your sales velocity if you frequently run out of stock is to take action. You should limit PPC (Pay Per Click) ads you run and other marketing campaigns, and estimate when you will be able to restock your inventory.

Additionally, (or instead of) marketing changes, you can try adjusting your prices. You will make more money per item when you charge more, and you will naturally lose sales if you charge less. Be careful not to raise your prices so much that you turn away prospective customers, as they may think you offer high prices when they actually offer low prices.

  • Descriptions and prices are incorrect

It will invariably cause errors to manually enter and adjust the prices and descriptions of many products. Pricing items too high or too low can lead to lost sales, as well as lowered profit margins.

In addition, you might damage internet and external search traffic if you mess up a key phrase. In the event you make such a major mistake that you need to reach out to customers to address it, you will earn (and merit) bad reviews.

What is the best way to synchronize prices and descriptions?

By synchronizing prices and descriptions in one dashboard, you can minimize the need to enter things manually and reduce the risk of data input errors.

Solution to every inventory issue

It can be annoying and time-consuming to deal with all of these issues when dealing with Amazon inventory, but if you’re proactive, you will not have to. Investing in tools to automate your business is one of the best investments you can make.

Inventooly is the best inventory management software to help you manage your stock. It is useful for both overstock inventory and out-of-stock inventory. If you are struggling to understand inventory insights, running out of stocks or bad supply chain management, Inventooly can address these all issues for you.

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