Depleted Amazon inventory will depress your profile ranking and negatively impact future sales.
For small- and medium-sized businesses, selling on Amazon offers access to an actively engaged platform of online shoppers from around the world. Succeeding as an Amazon vendor, however, comes with its own learning curve. From deciding whether to register as an Individual or Professional seller to selecting the right fulfillment partner for your business, you’ll have plenty to keep tabs on.
Most importantly, you’ll need to stay up to date on the status of your inventory. If Amazon runs out of your product, you run the risk of incurring seller penalties — not to mention critical customer reviews that could harm your profile and dissuade shoppers from doing business with you in the future. Taking the following steps will help ensure your products remain in-stock and available to customers whenever and wherever they may need them.
1. Stay On Top of Your Inventory
It may seem obvious, but the best way to avoid shortages is to do everything in your power to maintain an adequate inventory. Finding the right balance, however, is easier said than done.
Because of Amazon’s fulfillment and storage fee structure, it isn’t always cost-effective to keep too many products in the platform’s warehouses at a time — you’ll run up considerable charges the longer your items have been on Amazon’s shelves. Instead, try to find an equilibrium that takes advantage of Amazon’s infrastructure without breaking the bank.
To help, check out Amazon Seller Coach located in your Seller Central account. This tool keeps an eye on inventory for each of your items as well as total sales. After enough time as an active seller, the coach will make recommendations on ideal inventory levels for your business. Be warned, though: Amazon Seller Coach isn’t foolproof, as vendors have occasionally reported issues with inventory reports and delayed guidance.
2. Foster Open Communication Throughout Your Supply Chain
It’s possible to do everything you can to maintain ample stock in Amazon’s facilities and still come up short. If you sell your items but don’t manufacture them, for instance, delays at one stage of your supply chain may lead to widespread disruption throughout it.
Avoid this kind of friendly fire by staying in regular communication with your suppliers. If they anticipate material shortages that will affect your ability to keep up your inventory, you need as much warning as possible to make other plans. Alternatively, if you can guarantee a minimum order each month, place them as early as possible so that you aren’t left empty-handed while kinks work themselves out.
Likewise, make sure all of your supply chain stakeholders are informed and aware of expected surges in demand. If you make and/or sell Christmas ornaments, for example, it’s a good idea to prepare your suppliers for larger orders in the months leading up to the holiday season. This way, no one is caught off guard during crunch times that are crucial for your business.
3. Have a Contingency Plan in Place
If you’ve done all of the above and still face dangerously low stock, there are some last-ditch measures you can take in order to avoid penalties and negative customer reviews.
First, try to slow purchases until you’ve resupplied your inventory. For example, if you’re running any paid ad campaigns, you should consider pausing them temporarily to decrease consumer traffic to your product pages.
Second, it doesn’t hurt to store a modest amount of inventory in your own facilities if you have the space. While you cover the logistics of refilling your stock at Amazon’s fulfillment centers, you can convert your listings to Fulfillment by Merchant (FBM), preparing orders and shipping them out to customers entirely on your own. While this may cost you more in the short term, it enables you to continue fulfilling your orders, which keeps your customers (and Amazon) happy.
4. Partner with a Resourceful Shipping and Logistics Provider
Of course, depending on your business structure and long-term goals, FBA may not be your best option in the first place. For some companies, it makes more sense to partner with a third-party logistics (3PL) provider and opt for FBM as your baseline strategy. This can provide a number of benefits, including increased inventory oversight and visibility, dedicated customer support and strategic guidance, and more flexibility to drive savings and long-term value.
With over two decades of experience in international shipping and logistics, Primary Freight has the necessary expertise, relationships, and technological infrastructure to help you craft customized order fulfillment solutions and optimize your e-commerce program. Amazon’s online marketplace offers unparalleled reach and visibility for retailers, but the key to success and profitability isn’t just signing up — you have to know how to use it correctly.
If you’d like to learn more about Primary Freight’s array of award-winning shipping and logistics services, contact us today at (800) 635-0013.