200,000 pieces of goods all turned into inventory! The seller's products were removed from the shelves due to a prank, and it took 6 months to clear the inventory

Only sellers who have experienced it know how terrible the pain of inventory backlog is.

There are thousands of reasons for the occurrence of inventory: wrong product selection, infringement of the store being closed, etc., all of which can lead to inventory backlogs. If it is caused by your own decision-making errors, then there is nothing to complain about, but if it is caused by a spoof, then you will vomit blood three liters.

But in any case, the inventory has been generated, and how to deal with it and speed up capital turnover are the issues that sellers should be more concerned about.

Products were removed from shelves due to pranks, and 200,000 yuan of goods became inventory

If you search for the word "inventory" on Facebook, you will see a bunch of posts from sellers about clearing out inventory. For example, a seller on the US site posted: 20,000 more kitchen paper rolls in LA, looking for a channel to collect inventory offline in Los Angeles.

Obviously inventory is a heavy burden for sellers to carry.

There are many reasons for inventory backlogs.

For example, seller Xiao Zhang missed the peak season because his Christmas products were taken off the shelves. He had prepared more than 200,000 goods, and the advertising fees he spent before the pre-heating were completely wasted. In return, he had a pile of accumulated inventory, which took him a full six months to clear last year.

Also, because products temporarily need certification, they are forced to be taken off the shelves, resulting in a large backlog of inventory.

As a result, a fascia gun previously sold to Japan was suddenly classified as a medical device and required certification. As a result, all links to the product on Amazon Japan were forcibly removed, and some sellers' millions of stocks immediately became a heavy burden.

In addition, Amazon FBA logistics was also a major cause of inventory backlogs last year and this year .

Amazon warehouses have been extremely slow in warehousing and putting goods on shelves recently. Once the wrong time is chosen for a product, the goods will probably never see the light of day again and will be directly piled up in the warehouse.

Some small sellers had more than 600,000 pieces of goods that they had earned with their profits stuck in Amazon warehouses this year because of a warehouse overflow at Amazon. Orders dropped sharply because they had put all their earnings into the warehouses. In the end, they lost all their money because they could not turn over the funds.

An Amazon seller who sells home products said that because he was afraid that the store would always be out of stock, he chose to send dozens of cabinets at one time. However, he did not expect the order volume to be sluggish and ended up with nearly 10 million in storage and unsold goods fees, which almost cost him a fortune.

In February of this year , Amazon will implement a new round of inventory performance restrictions. In addition, Amazon will charge monthly storage fees and long-term storage fees. Those unsaleable products and out-of-season products have become a burden for sellers.

Some sellers have already suffered from this. The seller Xiao Huang's goods took two months to put on the shelves, which led to increased inventory costs and poor capital turnover. In addition, a new product was taken off the shelves due to ASIN restrictions and has not been able to be sold since then. Under multiple pressures, he suffered a loss of more than 1 million last year.

Loss of 50 million, the best seller also suffered from inventory backlog

With inventory backlog, certain losses are inevitable.

Some sellers suffered losses ranging from tens of thousands to millions. There were even some that suffered losses of tens of millions due to inventory backlogs during big sales.

Previously, a seller said that due to his lack of risk resistance and blind product selection, he had a backlog of inventory in the Amazon warehouse and eventually lost more than 1 million.

In fact, it is not just ordinary buyers who have their profits eaten up by inventory or even suffer serious losses, but also big sellers.

For example, Jiazhilian’s inventory backlog is very serious, and in 2019 alone its inventory lost nearly 50 million yuan.

According to the letter that Jiazhilian sent in reply to the Shenzhen Stock Exchange, Jiazhilian's inventory volume in 2019 was 4.49 million pieces, but its sales volume was only 1.69 million pieces, and it suffered a loss of nearly 50 million yuan in inventory management, most of which was caused by damage, loss, and return of goods, and failure to handle returns in a timely manner.

Relevant data show that from 2017 to 2019, the total loss of the value chain performance was 41.12 million yuan. It can be seen that its inventory loss in one year is higher than the total loss of performance in three years.

In addition to Jiazhilian, the old seller in East China, Zeshang Technology, had a revenue of 107 million yuan in the first half of this year , with a net profit of only 330,000 yuan , but its inventory balance was about 12.51 million yuan, of which about 1.562 million yuan was in sales and about 9.51 million yuan was in inventory . This situation is exactly the proof of the saying, "All the money earned turns into goods."

How to prevent inventory backlogs

The new year has arrived, and many sellers are still worried about inventory backlogs. Although stranded inventory is stressful, sellers can take some measures to prevent inventory backlogs.

1. Sellers should not delete listings or offers immediately

If you are out of inventory and have no plans to restock, do not immediately remove your offer from Manage Inventory. Without an active offer, any potential lost inventory or customer returns will be stranded.

2. Before sending FBA goods, sellers should fill in the listing information completely

Doing this ahead of time can help prevent listing errors from happening. When first creating a brand new listing, Amazon allows sellers to skip steps like adding images or product features. If sellers don’t include this information before your inventory arrives at the FBA warehouse, it runs the risk of being held up.

3. Complete proper research before listing your items and sending your listing to FBA

Before buying inventory for a product, make sure you are allowed to sell it - especially if you are selling it wholesale or at a profit. Be 100% sure you are allowed to sell that specific brand or category.

4. Be 100% accurate when creating FBA shipments

Another reason your inventory may be stranded is if an FBA warehouse receives more inventory than specified in your shipping plan, or you send items that were not included in the shipping plan. Make sure this information is 100% correct to limit issues that can occur during shipping.

5. Don’t price below or above your minimum and maximum price settings

Some sellers set minimum and maximum prices for their products in Manage Inventory. However, if one of your ASINs is priced higher or lower than the set numbers, Amazon will ban it. For example, if a seller sets your minimum price at $13.99 and you accidentally price your item at $13.98, the listing will be disabled and your inventory will be stranded.

However, no method is foolproof. If there is still inventory after taking various measures, the seller can also take some inventory handling measures to speed up the capital turnover. For example:

If the product quality is excellent, you can send the product to some popular bloggers on social media such as Facebook and Twitter, and ask them to increase the product's reputation and expand its influence, thereby effectively attracting traffic to the product and achieving the purpose of clearing inventory.

If the product value is very low , you can choose to buy one get one free, set up coupons and discounts, or give away an item of low value as a bundled sale. This can also drive sales of another product. If there is a lot of inventory, you can participate in Lightning Deals to quickly clear it out.

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Zeshang Technology