Amazon Inventory Management: Common Problems and Solutions

Inefficient supply chains and inventory management cause global retailers to lose more than $1.8 trillion each year . While offline retail accounts for a large portion of this , e-commerce also suffers billions of dollars in losses .

Doing business on Amazon is even more challenging . Sellers need to ensure a strong supply chain like other traditional businesses , while also identifying and facing problems unique to the platform.

When selling on Amazon , it’s common to lose shopping carts due to out-of-stocks , incur extra costs due to overstocking , and errors in product pricing and descriptions . If these issues are not discovered and corrected in a timely manner, they can seriously affect your product’s search rankings and reviews.

In addition, sellers also need to choose between shipping modes such as FBA and FBM . FBA can help sellers achieve Prime delivery, but FBM provides sellers with more control and can help large enterprises reduce costs.

Below, the editor lists several common problems in Amazon inventory management , as well as feasible solutions for sellers when facing these problems .

Poor supply chain management

Establish an effective and transparent communication channel with suppliers and partners, and use their help to identify existing problems in the process. To avoid delivery delays, set realistic delivery times after taking into account all manufacturing and transportation processes , etc. You can even consider adopting automation tools driven by artificial intelligence to minimize uncertainty and human errors.

Stock depletion

According to a 2018 report, out-of-stock online stores cost global retailers $22 billion per year . Inventory out-of-stocks can occur for a variety of reasons :

Not paying attention to sales velocity : Sales velocity refers to the number of units sold in a specific period of time . If you don’t pay attention to sales velocity , it will be easy to run into inventory shortages .

Poor sales forecasting : Since product sales are inconsistent during holidays and promotional events such as Prime Day , not accounting for potential sales spikes can cause businesses to suffer .

Lack of monitoring of sales outlets : Without paying attention to additional sales channels, sellers will also face the risk of unexpected inventory depletion and stock-outs.

The first step to addressing these issues is to bring sales velocity under control by pausing active advertising and marketing campaigns.

Sellers can also try using intelligent inventory forecasting tools, which can identify market trends and help sellers better handle inventory and order issues .

Excess inventory

One way to deal with overstocking is to lower pricing in the short term, coupled with promotions. Sellers can also increase keyword bids in advertising campaigns to acquire new customers. However, consider the costs incurred by the operation and make strategic pricing .

Secondly, in order to avoid Amazon’s extremely high storage fees, sellers can use a transfer order to move excess inventory from Amazon’s warehouse to their own storage warehouse, but this is a last resort, otherwise it will complicate the problem.

Pricing and Description Issues

Incorrectly entering prices and product information can lead to lost revenue, and if product descriptions are incorrect or not optimized, sellers can also lose traffic due to search engine issues . Sellers can compile a file containing all product information to have a comprehensive control of their product data .

In addition , as far as I know, there are many automation and artificial intelligence tools that can help sellers monitor the system and provide services such as procurement , inventory forecasting and data analysis . Sellers in need can pay more attention to it.

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Inventory Management