• Tony Minh Do

3 Tricks to Optimize Your Amazon Inventory Management

Learn how to maximize your profits by optimizing your Amazon inventory management! Sit back and watch your profits and Amazon business take off!


Amazon inventory management is an essential skill that all Amazon sellers need to build and hone if they want to maintain a steady flow of profit. Without managing your inventory correctly, it could be drastically detrimental to your cash inflow and your business' overall health. Depending on your business model (dropshipping, arbitrage, private label, and wholesale), inventory management can be a couple of items a month or hundreds of items a day.


These tricks will help all sellers but will be optimized using the wholesale model. If you’ve chosen the wholesale reseller route for your Amazon Business, you’ve made a good choice. Spearheaded by relationships with brand owners and wholesale suppliers, the wholesale model is low risk, fast, sustainable, and when done correctly, yields a high return on investment. Whatever your model may be, use these tips as a foundation to build your inventory management skills and maximize your profits today!


If you have no idea what I'm talking about and are asking yourself, "what is wholesale," you can check out our Beginner Guide to Selling Wholesale!


Selling Wholesale Using Replenishable Products


The first question that may come to mind, "what is a replenishable product?" and why should I care? When thinking of replenishable products, the first items that come to mind are consumables such as paper towels or toiletries. But when it comes to Amazon FBA, the business version of replenishable is a bit different.


A replenishable product is simply one that you can purchase from a brand owner or distributor, sell, and purchase more again to replenish your inventory. These products are not just popular or profitable, but ones that you can build a stock of the same products AND have a consistent basis to supply to consumers. As people buy from your stock, you easily order more from your wholesale brands and amazon wholesale distributors.


By focusing on replenishable products versus a one-and-done approach, you develop a business cycle of buy, sell, earn, buy again. This can be extremely difficult with other business models, especially dropshipping or retail arbitrage where inventory supply can be a bit scattered and inconsistent. With wholesale, your stock comes from building strong relationships with manufacturers and suppliers. Therefore replenishable products are significantly more reliable and consistent under the wholesale business model.


High Demand Products and Other Qualities to Look For


There isn’t one set type of replenishable product out there. But there are a few guidelines to help you define what it truly is.


Replenishable products are:


  • In sustained demand/desirable

  • Have predictable sales patterns

  • Able to be purchased in small, medium, or large bulk from brand owners/distributors


Headphones, weighted blankets, toys, undergarments, HEPA air purifiers are some examples. That doesn’t mean you need to run to the nearest distributor and buy out their inventory of these exact items. In fact, we’d encourage you not to! We’re just trying to illustrate what a replenishable product is so you’ll know what to look for when you want to build an inventory for your Amazon reseller business.


Hack the Process with Amazon Inventory Tracker


Finding replenishable products can take up a lot of product research time to pick the perfect products. One way to cut down this process is by using helpful FBA tools and product research tools. Sellgo offers an Amazon inventory tracker through the Product Tracker. The product tracker will collect data on all Amazon products to identify products that are in demand, display their sales patterns, and which suppliers are currently offering that item. The product tracker is your own personal Amazon product manager that leads you directly to high-demand replenishable products.


For more tips and information on how to find and track winning products, we recommend reading these articles on Super Tracking and A Guide to Product Analysis!


Inventory Management and Inventory Variation


Once you’ve landed a profitable replenishable product, it is up to you to manage your inventory. This involves a bit of planning with your supplier and keeping tabs on your inventory levels so as not to sink too low. The last thing you want to do is end up being out of stock of a high-demand product. That will send customers running to the next available seller and lead to massive profit losses.


Unfortunately, people can’t backorder out-of-stock items on Amazon. The customers have to either wait for the product to be in stock or move on. This can cause your Amazon seller listing to lose rank, lose positions in Amazon's buy box, and may make it more difficult for your products to reach customers in the future. Be sure to keep a steady inventory of your products. You can view your inventory in the Seller Central account under “Manage Inventory.”


Inventory management is not just stocking up on new products (looking forward), but also performing due diligence on old products (looking backward). Another key to increasing your profits is ensuring that you're not wasting resources on poor-performing products. One of the risks of wholesale products is that they can lose momentum very quickly. If you have a huge amount of stock of a product that is losing momentum, make sure to sell any excess inventory. Inventory that doesn't get sold takes up space and resources that could be used on better, more profitable products. So sellers need to look backward and sell overstock inventory as soon as possible. This will also enable sellers to find better-performing items that increase profitability and will also help with inventory variation.


Inventory Forecasting with Amazon Seller Software


The last trick every seller needs to know is the lead time and inventory forecasting.


Lead time is the amount of time it takes for your inventory to arrive once it is ordered. When stocking up on a new product, you’ll want to make sure you factor in enough time to prevent your current stock from running out before your new stock arrives.


Inventory forecasting is the concept of understanding sales trends and the impact of seasonality. By factoring in how quickly your items are selling, inventory forecasting can alert you when it is time to restock your product. As a result, sellers can estimate when they should restock and what seasons to prepare for. If you didn't know already, Amazon sale events like Prime Day and Black Friday, seasonal sales trends, and holidays can lead to sales spikes! This isn't anything new! Sales spikes happen all the time in brick-and-mortar stores as well! That's why malls are always packed around the holiday seasons and Black Friday sales are so popular every year!


If you stay up to date on sales trends, this is an excellent way to accelerate the growth of your Amazon Reseller Business and unlock your profitability to new heights. You also can use third-party applications or software solutions to manage your inventory and predict upcoming sales trends. Of course, you’ll want data you can trust that takes out the guesswork. We recommend using both Sellgo's Amazon Product Tracker and Profit Finder! These two tools will empower any seller to become a pro at inventory forecasting by using Amazon seller software. Sellers will be able to identify Amazon sales forecasting and can then order seasonal products to sell for their Amazon business.


Make Your Seller Central Account and Start Building Your Inventory!


After reading this blog, you know the best tricks to optimize your Amazon inventory management! Remember to focus on reselling replenishable products, keep your inventory stocked, and prepare for those sales spikes by forecasting!


After you create your free Amazon seller account and follow our tips, sit back and watch your bank account and Amazon business take off!


If you haven’t started your Amazon reseller business yet, check out the step-by-step tutorial on 7 Steps to Activate Your Amazon Central Account in 2021!

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