Inventory is one of the most important parts of your business. If you have too little inventory, your customers will get frustrated. But if you have too much, you can potentially lose a lot of money. So how do you find the balance?
According to Amazon, “Inventory management is the process of tracking and storing products to meet customer demand quickly and efficiently. It applies to how you source, store, and process products to get them ready for sale.” Amazon also lists some issues that they have seen come from poor inventory management, including excess inventory, low stock levels, stranded or dead stock, spoilage, and high storage costs.
If you’re not careful, poor inventory management can be detrimental to your business. This blog post will discuss tangible ways you can manage your inventory and give yourself a leg up against your competition.
Here are 10 ways you can successfully plan your inventory as a Vendor Central 1P Seller:
Table of Contents
1. Keep a detailed record of your sales history
The first thing you should do is keep a detailed record of every sale you have ever made. This will give you a lot of valuable information, including which of your products are the most popular. It can also help with forecasting, gathering customer data, what you need to have more of, and what you need to have less of.
2. Get to know your customers
Your customers’ buying habits can tell a lot about what type of inventory you need to have in stock. Aside from that, you should get to know even more about them if you want to have more accurate information. The Amazon Demographics Report is a wonderful tool that can help you get to know your customers and give you information such as their ages, education levels, income, marital status, and more. This is a great tool to take advantage of when you are planning your inventory.
3. Keep good relationships with your suppliers
Your suppliers are a critical part of your business, so it’s important to keep up a good relationship with them. Keep clear lines of communication open and make sure they know you are appreciative of them. A healthy relationship with your suppliers will only benefit you in the long run.
4. Offer discounts periodically
If you have inventory that is getting old and you need to sell it quickly, there’s nothing wrong with offering discounts for it. In fact, this can be a great strategy to get more customers to your store. Although you’re not making the full profit, you’re still making some – and that’s much better than none.
5. Have at least four weeks’ of inventory in stock
With the ongoing supply chain issues going on across the world, it’s hard to know exactly when or if you’ll get your inventory on time, or in some cases, at all. Amazon recommends keeping about four weeks’ worth of inventory in stock so you don’t run out during the tough times.
6. Stay on top of supply chain updates
Going along with the last point, you should keep up with supply chain updates. The supply chain directly impacts your inventory, which directly affects your business. Keep a close eye on the updates and adjust accordingly.
7. Do regular restocks
If you notice you’re running low on a popular product, don’t be afraid to restock. You have proven to yourself that you can be successful as an Amazon business, so restocking your items shouldn’t be a problem.
8. Utilize Amazon’s inventory management tools
Amazon has a plethora of inventory management tools that are incredible for inventory planning. Those are available to you as a seller, so take advantage of them.
9. Do inventory forecasting
Inventory forecasting is a great way to know what items you’ll need in the upcoming months. Many items can surge in sales during holidays, seasons, and events, so take those into consideration when planning your inventory. For example, if you sell Christmas decor, you’ll want to add more inventory to your store toward the end of October or the beginning of November so you don’t run out.
10. Practice makes perfect
Finding the perfect amount of inventory for your specific situation can be a difficult task. Every store is so different, which makes it even harder. However, you know your Amazon store better than anyone. And as you practice your inventory management and planning skills, you will become better and better at it over time.
Planning your inventory can be tricky, but it should be one of the key parts of your business model. If you need help planning your inventory or making sure you’re staying on track, the Amazon experts at Laser Sight Digital can help. Contact us today for help building your Amazon business into something incredible.