Do you have an idea about what Amazon Inventory Management is and how it is managed?
Do you know what software can be used for managing the inventory?
Amazon has become the world’s largest market where millions of products are bought every second. Seeing this as an opportunity, a lot of people are opening up a business on Amazon.
However, the mistake they are making is that they are not managing their inventory on Amazon.
In order to get more sales, good rankings, and increased profits, it is important to have an inventory management system.
In this blog, EJET will tell in detail about what Amazon inventory management is and how to manage the inventory.
Furthermore, we have also added a list of the best Inventory management software made for Amazon. Let’s talk about this without wasting any more time.
Table of Content
Chapter 1: Amazon Inventory System – Can it Increase the Profits?
Chapter 2: 7 Ways You Can Improve Amazon Inventory Management
Chapter 3: Why Amazon Inventory Management System is Crucial for Amazon Sellers?
Chapter 4: Main Impacts of Improper Amazon Inventory Management
Chapter 5: What to Look For When Selecting Amazon Inventory Management System?
Chapter 6: Best 7 Tools for Amazon Inventory Management
Chapter 7: Advantages of Using Amazon Inventory Management System
Chapter 8: Frequently Asked Questions About Amazon Inventory Management
Table of Contents
Chapter 1: Amazon Inventory System – Can it Increase the Profits?
Selling on Amazon is a perfect way to make money and develop a successful business. However, it requires you to have an inventory management system.
But, what is an inventory management system and why is it important to have one. You will have the ideas after reading this chapter.
1. What is Amazon Inventory Management?
The way Amazon works is you list an item and whenever a customer likes that item, he/she places an order. Then, you deliver pick that item from your inventory and deliver it to the customer.
The word “inventory” here is important because it defines the way you do the business. Let’s say that you have an inventory of 500 doormats. What happens when you ran out of that stock?
Well, that is where Amazon inventory management comes in. Inventory management allows you to track your stock, profits, orders, and sales.
Basically, it handles all the processes that are required for the e-commerce business. It is important because if not taken care of, the downside of not having inventory management can cause a lot of losses.
2. Side effects of running out of Amazon inventory
What do you think happens when you run out of inventory? Are you thinking that you will place another order with your supplier and he/she will deliver the items to your warehouse?
Well, what will happen between the times you placing the order and getting it after 10-15 days?
Actually, getting out of stock impacts the seller in many possible ways and if you are an FBA seller, the impact is very significant. Here is how running out of Amazon stock affects any seller.
- Losesales and competition
The first and foremost effect of running out of inventory is that you lose sales. Customers who are looking for the product won’t wait for you to fill up the stock.
They will buy the item from another shop. Thus, this leads to losing sales.
The second side effect is that you will lose the competition. Amazon actually places a penalty if you are not generating sales.
Your product listing goes from active to inactive and in this time period, you won’t be able to make any sales. If there are no sales, the listing loses its ranking and that can become very difficult to recover.
- The best seller/hot product trap
One of the greatest mistakes sellers make is that they launch a product that is hot at that current time. Yes, they can make a lot of profits. However, it is not the best practice because there are multiple reasons.
Running out of stock is one of those multiple reasons. The thing is when you run out of stock, your competitors will be getting an advantage.
And another thing is if you take 10-15 days refilling the stock, there are chances that the product won’t be top-selling at that time.
These are some of the downsides of running out of stock on Amazon. And, that is why it is important to have a management system that will help in keeping a check on everything.
3. Do sellers need an Amazon inventory management system?
The thing is they do need a system that keeps them updated about their business. Because if not, there can be consequences that can lead towards you getting losses on your business.
An inventory management system comprises tools that show detailed analysis such as leftover stock, sales, orders, and PPC campaigns.
Together, these values show to apply strategy so that owners can get the most out of their profits.
Another main aim of these tools is that they reduce the carrying cost by giving accurate fees and syncs your inventory with the listings.
This allows a seller to have a hassle-free balance between the business.
4. Can the Amazon inventory management system help in increasing profits?
Whether you believe it or not, Amazon’s inventory management tools can put in a huge effect on the business.
It can help you in checking the orders and how many products are left in the warehouse. Then you can be mentioned when the inventory is not enough.
With the inventory management system, you can easily manage your business on Amazon. The effects can increase profits in an astonishing manner.
So, these tools can help in scaling the business and getting a lot of profits.
Also read on: Supplier Relationship Management in China: Everything you Need to know
Chapter 2: 7 Ways You Can Improve Amazon Inventory Management
Yes, the tools are effective and can result in greater advantages. But, to get those advantages, first, it is important to discuss the 7 ways that you can use to improve Amazon inventory management. Here are the points that you need to follow.
1. Understand the inventory turnover rate
The first thing that you need to take into consideration is your Amazon inventory turnover rate. Basically, Amazon’s inventory turnover rate is how fast you sell your inventory in terms of time.
To get the figure of this, you need to see how much time you sell your products. This helps you in avoiding over-buying or under-buying.
There are various tools available out there that help you in doing that. Amazon sellers have a dedicated tool available that tracks the trend of your daily sales.
Secondly, there is another tool called Amazon Selling Coach, and that gives you the figure of remaining stock.
2. Keep up with the supply chain lead time
Moving towards the second point, it is keeping up with the supply chain leading time. A supply chain is referred to as moving items from the initial point (e.g supplier) to the final point (warehouse).
Leading time in the supply chain is how much time does a product takes to get developed and shipped to the warehouse.
By learning about this, you will be able to see who at which point is involved in making and getting the product. If you want to make a smooth supply chain, you have to keep yourself on top of the suppliers.
Plus, the time can also be taken care of if you place alternate solutions for delivery. These delays can take up to weeks so the better solution is that you keep a reserved stock in case there is an issue.
3. Plan for unexpected sales fluctuations
One of the mistakes that sellers make is that they don’t plan for seasonal fluctuations. What happens is seasonal demands put in a lot of effects because they become hot selling and increased production time. So, the idea is to plan for these types of seasons.
If you see an upcoming seasonal time, make sure that you have stocked the items at least a couple of months before.
Moreover, it is important to consider the supplier’s extended time because if not, you won’t be able to sell in that season.
4. Allow Dropshipping as an emergency method
Consider dropshipping as an emergency backup if you are not able to meet the sales demand.
Dropshipping is a less risky solution because you don’t have to keep a stock. Your supplier will deliver the item directly from their warehouse whenever you get a sale.
One more thing to consider is that you have to select variable suppliers for drop-shipping because you have to make profits.
Dropshipping a product can have more fees because of different factors, so make sure that you have negotiated considering that with the supplier.
5. Create a working strategy for sales and promotions
Promotional deals like free shipping or sale can grow your business effectively if you are doing right. However, with these promotional deals, there is a chance your product gets on the best sellers list and that can leave you with an empty inventory.
There are no sellers who want to make their customers angry and lower Amazon’s ranking. So, make sure that you have placed a strategy if in case you are planning a promotion.
Consider adding a limit to how many products will be sold in the promotional offer. Once that number is reached, you can close the promotion. This way your brand will have awareness and demand.
6. Try to slow down the demand when it is required
The best sellers on Amazon follow a strategy and that is controlling the demand of their product. When in a sale or promotional offer, your products will sell at great speed. However, if you run low on stock, that can have consequences.
So, the idea is to control the demand. If you see that you are running low on stock, you can increase the prices or stop the PPC campaign. These tips will slow the demand in the case of lower Amazon inventory.
7. Use the inventory management system
The last point in managing Amazon inventory is adding a system that can track your business in every possible way. That is where Amazon’s inventory management software comes in.
They can track the stock, sales, purchases, and all other factors involved in this business. We will talk about these systems in the coming chapter.
Chapter 3: Why Amazon Inventory Management System is Crucial for Amazon Sellers?
Let’s talk about the issue that whether the Amazon inventory management system is important or not. EJET has added some points that are in favor of inventory management systems for Amazon.
1. Make sales and attract more shoppers to your product
One of the best advantages of an inventory management system is that you can make huge sales without running out of inventory.
See, inventory management systems consist of a feature that will tell you whether you’re low on the stock or not. They will notify you whenever the stock is low.
Some of the systems have a dedicated feature of re-ordering the inventory when it is reached the critical point.
This way, you can make the sales without ever going out of stock. They will send the email to your supplier and everything will be sorted out without putting in any effort.
2. Reduce the costs of inventory with Amazon Inventory System
The sellers who have not invested in the inventory management system always get into the problem of over-stocking. They buy the stock in huge quantities and then their money is stuck.
These systems work on sales trends and give you the number of required quantities based on that trend. This way you don’t get to face the issue of over-stocking and tying up money in the shape of unsold stock.
3. Reduce the risk of selling spoiled items
If you are into the business of selling products that have expiry dates, then an inventory management system is the best partner for you.
The software allows you to track the dates of these products and if the items are past that date, you can remove that from the listing.
This way, you will be able to prevent the selling of expired items to the seller. Hence that will save the business.
4. Reduce the risk of losing the inventory
Inventory management systems for Amazon have all the essential tools that will help you in keeping the money. For instance, they have the power to track the items, and this way the employees won’t be able to steal the items.
Secondly, you can reduce the losses, because the software tells about the errors you are making. And, as it can manage inventory, you will be able to see whether your stock is mismanaged or not. Hence, all these points will prevent money losses.
5. Sync the inventory according to product type
One of the most daunting tasks is linking the inventory with its product type. Basically, if you are selling multiple garden items, you will be able to sync all garden products under one category.
This allows efficient management of the products and the whole inventory. Every inventory management system for Amazon has this feature and it will make your business way easier.
6. Create the listing without any hassle
Lastly, the advantage that the inventory management system has to offer is that creating the listing.
Yes, you can create the listing from these systems without needing to open your seller dashboard. You can add pictures, descriptions, and tags easily with the inventory management software.
Chapter 4: Main Impacts of Improper Amazon Inventory Management
What happens if you are out of stock? That is the question that arises in the mind of a new seller.
If you are out of stock, the impacts can affect your business in ways that you cannot imagine. Here is what you can expect if you have not managed the Amazon inventory.
1. Sales will not rise and listing can be lost
What happens is when you are out of stock, Amazon hides your listing because you are not able to sell the services. When your listing is hidden, the customers cannot see your listing and won’t be able to buy the item.
That means there will be no sales. No sale means that your listing won’t be ranked. If you are not quick enough, there will come a time when your listing will be lost in the pages.
That is a bad thing because no customer wants to scroll 18 pages in order to buy your product.
2. There is no new updated comments can attract customers
As we said, you won’t be able to make new sales because you are out of stock and Amazon has deactivated your listing. The disadvantage of that is your product will not have new reviews.
No new reviews mean future customers won’t be able to see what is right or wrong with your product. Once on your products’ detail page.
The newest comment is be posted on 2 months ago, the customers may feel that your shop has some problem, and stop buying. Hence, there will be losses.
3. Lose customers when you need more time to replenish stocks
If you are not able to manage the Amazon inventory, you will lose the existing customers.
The thing is when you are out of stock, your customers will buy the competitors because they want that product. While you are re-stocking, the customers will buy from the sellers that are offering the same product.
Chapter 5: What to Look For When Selecting Amazon Inventory Management System?
Here are some of the things that you need to consider when you are looking for the best inventory management system.
There is no hard and fast rule that all of these things should be present. However, if every feature is there, the outcome will be better.
1. Does it offers Sales channel support?
One of the first things that you should look at in the Amazon inventory software is the sales channel support.
While the sellers who are only working on Amazon desire this feature, the online who are running stores on eBay, Walmart want a multi-channel system. So that they can interact with their customers easily.
Another important thing is retail sites like Etsy don’t have sales channel support. So, it becomes essential to have software that gives sales channel support.
2. Can it optimize the integration?
While you are looking for an inventory management system, consider this point because it is important. Much software out there only sync with the front of the business and that is sales channel support.
The thing you should consider is whether the system can link with all of the business processes associated with your brand. In simple words, whether the software can optimize the integration or not.
If your software is able to place the order request to the supplier whenever you are running low on stock, it is great. The second important integration is managing the social media campaign for your product.
If the inventory management system can do that, consider that. And, the third thing is managing promotional and sales offer. These are some of the key integrations that you should look for.
3. Does if provide multiple business processes?
Latest generation Amazon inventory management systems have the capability to handle multiple business processes.
While the Amazon inventory management system only gives useful information, the new software can give a deeper insight into the business.
With these, you can perform tasks such as accounting and order. The software can communicate these factors and will help in restocking.
Secondly, they can give real-time financing reports. With this, you can track how much you paid for shipping, packaging, and you can also create an invoice for the orders.
4. Can it provide optimal order frequency?
Overstocking or under-stocking can have negative impacts on the e-commerce business.
If you are under-stock, you will lose the competitive advantage and if you are overstocked, your money will be stuck in the form of unsold inventory.
So, the best solution is that track your sales and order the items accordingly. Well, that can be a daunting task for many sellers.
However, if you invest in an inventory management system, you can avoid that. These will give you a fixed figure of the quantity that you need to order.
This way your order frequency will be at the optimum range.
These are some of the features that you need to consider while you are looking for inventory management software for Amazon.
Try to get the software that has all of these features, because that will help you in managing the business properly.
Chapter 6: Best 7 Tools for Amazon Inventory Management
Let’s talk about some of the best software that will help you in managing Amazon’s inventory. Every software is known for its own features and gets the work done.
We have added the software by keeping one thing in mind that is easy-to-use UI. Because an e-commerce business can become a headache for some people. Let’s move forward.
1. Orderhive
The first inventory management system that is worthy enough to be on the list is Orderhive. Orderhive comprises of latest features that will help you in getting the most out of the business.
Not only Amazon, but Orderhive also works with major retailers such as eBay, Etsy, and Walmart.
Order have has features such as:
- Auto inventory update
- Auto Shipment
- Invoice and Email
- Social media campaign management.
2. Sellbrite
If you are looking for software that offers user-defined UI for the e-commerce business, then Sellbrite is the one for you. Sellbrite packs the power of scaling the Amazon FBA business.
Not only Amazon, it works with all major e-commerce sites. The system gives an automated response that is required for managing the business.
Some of the features of Sellbrite are:
- Create a listing on every e-commerce site
- Sync inventory across all platforms
- Ship orders using the advanced learning system
3. Sellics
Moving towards the third Amazon inventory management system and that is Sellics. There are two versions of Sellics, one is for vendor central and one is for seller central.
However, the features and UI is somewhat the same for both accounts. The reason Sellics is here is that it has AI optimization, meaning it can link with your account and you can perform all business processes.
Other features include:
- Advertising
- Profit calculator
- Availability of SEO tools
- Review management system
4. Expandly
Expandly is a perfect tool to grow your business because it has multi-channel support, meaning you can link all e-commerce stores to the same account.
The system uses an easy UI that will help the new sellers in scaling the store. It offers a 3PL support feature so that you can run the business in an efficient manner.
Expandly offers features such as:
- Order management
- Shipping management
- Listing creation
- Shipping labels
- Inventory re-stocking
5. Veeqo
Veeqo is a one-stop shop for your e-commerce store that links with the backend of your seller account. With the system, you can connect your sales channel and interact with the customers without any major effort.
Moreover, you can also attach a shipping account and can place the orders directly from the system.
Veeqo comprises of features such as:
- Real-time visibility across all sales channels
- Replenish stocking and invoicing
- Back-end integration6.
6. Stitch Labs
In Amazon selling the business, it is important to keep yourself updated with every sale and order.
That is what Stitch Labs has to offer. With the system, you can use the power of the sales channel and deal with customers without needing to open the seller account.
Stitch Labs gives these perks:
- Point of sale option
- Third-party logistics
- offers purchasing decisions
7. TradeGecko/Quickbooks
The last inventory management system best for Amazon inventory management is from TradeGecko.
Whether it’s FBA or FBM, Trade Gecko provides the best solution that helps in managing the store. You can create the listing, track sales, and interact with the customers.
Other features that come with Trade Gecko are:
- 8 Users support
- Multiple sales channel integration
- Multiple currencies
- Zonal shipping rates
- Advanced user rights
Chapter 7: Advantages of Using Amazon Inventory Management System
There are many advantages of using an Amazon inventory management system. However, those advantages differ from product to product.
That is because each product requires a different category. But, some of the basic advantages are the ones that are common. Let’s talk about the benefits.
1. Automatic inventory updating
Amazon business requires one to keep updated with the status of their inventory. Otherwise, the seller will go out of stock and that is pretty bad for the business.
Secondly, if you have no tabs on the current inventory, there are chances that you do the over-stocking.
In order to prevent these mishaps, inventory management systems are introduced. These systems can automatically update the status of the inventory.
It will give you a real-time figure of what is happening with the inventory. Moreover, some of the systems even place the order if the inventory is in critical condition.
2. Track the items in the Amazon/Merchant warehouse
Another important feature of any inventory management system is that you can track the item in the FBA warehouse or the merchant warehouse. Basically, it is important to know the status of the order.
Let’s say that a customer has placed an order of shoes. If you have an inventory management system, you will be able to see what is happening with the shoes.
Whether they are out from the pallet or are packed/ready to ship. With this information, you can also update the customer about the situation of his/her order.
3. Gives the freedom to focus on strategy
E-commerce business requires a lot of strategies in order to be successful. For instance, you should know when to apply promotional offers, when to run the campaign.
Whether you want to give a refund or change the order. These are some examples.
However, this strategy-making process requires time. If you have not invested in an inventory management system, you won’t have enough time for that.
But with the system, it will do the mundane tasks without your interference. What’s more, you will have time to develop new strategies for your business.
4. Can handle multiple stores using one software
Since we are talking about time saving, here is another feature of most of the inventory management systems and that is managing different stores.
Inventory management systems support multiple channel support, meaning you can connect different stores and run them all together.
If you are a business owner operating on Amazon, eBay, Etsy, and other major websites, then you should definitely buy an inventory management system.
Chapter 8: Frequently Asked Questions About Amazon Inventory Management
1. Is it important to have an inventory management system?
In today’s world of e-commerce industry, it is important to have an inventory management system. For the reason that you are required to respond quickly to business processes.
Having an inventory management system allows you to be quick and run the process in an efficient manner.
2. What happens if a seller does not maintain Amazon inventory?
When a seller does not maintain the inventory, he/she goes out of stock and then Amazon deactivates the listing. Deactivating means there will be no sales and time will come when you will lose your listing.
After that, there will be no new customers or reviews and existing ones will leave also.
3. Which is the best tool to manage Amazon inventory?
There are plenty of tools available out there that offer the best features. However, if you want a recommendation, we prefer you to buy from Expandly, because it can integrate with the system at a deeper level. And it will give you detailed insights into the business.
4. Can we create an Amazon listing using the Amazon inventory management system?
Yes, inventory management systems offers the feature of creating the listing directly from the app. There is no need to open the seller’s dashboard and then create the listing. You can even add pictures, keywords, tags, and descriptions from the dashboard.
Conclusion
Starting a business on Amazon can become a huge empire, provided you are following the right steps.
One of those right steps is managing the Amazon inventory. Amazon inventory management is a crucial task because it defines the pillars of your e-commerce business.
We gave you a detailed insight into what Amazon inventory management is and how it affects your business.
We have also added a list of the best Amazon inventory management systems, so that you can choose the right one for you.
We hope this blog will find you in its best and will be fruitful in setting up a successful business.
