Amazon inventory management techniques and solutions

March 27th, 2024 18 minute read
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James Humphreys

Senior Content Manager

March 27th, 2024 18 minute read
What is Amazon inventory management? Amazon inventory management system is a software tool that helps businesses of all sizes manage and track their inventory levels on the Amazon marketplace.

Nowadays, everyone is online, either sitting at home on a computer or marching around with their face glued to a tablet.

It can’t be stressed enough how important it is for manufacturers to be leveraging e-commerce to get their products in front of customers. This is precisely why many D2C manufacturers decide to get set up with Amazon to sell their products, which is a good idea since Amazon ships a mindboggling 66,000 orders per hour.

Optimizing your Amazon inventory management is critical if you want to get in on this action. Otherwise, you won’t be able to fulfill orders on time and damage your business reputation.

That’s why we’ve put together this article to help you get the most out of inventory management for Amazon — let’s begin.

Inventory management for Amazon sellers is a crucial part of any retail business, and when it comes to selling on Amazon, having good inventory management practices can make all the difference.

What is Amazon’s inventory management?

Amazon sellers must have a good inventory management system for success.

But what exactly is Amazon’s inventory management?

In short, it’s a way for you to keep track of your inventory and ensure that you have the right products in stock at all times. It can also help you save money by preventing overstock and reducing the need for storage space. Many different software programs and services are available that can help you with your Amazon inventory management.

Some are designed specifically for Amazon sellers, while others are more general in purpose.

To choose the right one for your business, you’ll need to consider factors such as:

  • Price
  • Features
  • Ease of use
  • Customer support

In this article, we’ll go over everything you need to know about choosing and operating an Amazon inventory management system.

Inventory management for Amazon sellers allows you to control the items in your inventory and keep track of their sales.

Why is inventory management important on Amazon?

Inventory management is critical for Amazon sellers for a number of reasons.

First, it helps to ensure that you have the right products in stock at all times. This minimizes the risk of losing out on sales due to inventory shortages. Second, effective inventory management can help you avoid costly storage fees.

Amazon charges sellers a long-term storage fee if their inventory levels exceed certain thresholds.

Finally, good inventory management practices can help you keep track of your profitability.

By knowing how much each product costs to produce and ship, you can price your items more accurately and avoid selling at a loss. If you’re selling on Amazon, these tips will help you manage your inventory more effectively:

1. Keeping track of your inventory management

Keep track of your inventory levels using an Excel spreadsheet or inventory management software.

There are several reasons why inventory tracking is so important for Amazon sellers. The most obvious reason is that it helps you track your stock levels and ensure that you never run out of products to sell. This is especially important if you sell products in high demand or are seasonal items.

Another key reason why inventory tracking is so important is that it can help you avoid costly mistakes.

For example, if you miscalculate your stock levels and order too much inventory, you could have excess stock that ties up your cash flow and costs you money in carrying costs. On the other hand, if you underestimate your stock levels and run out of products, you could miss out on sales and damage your reputation with customers.

Inventory tracking can also help you improve your overall operations and make your business more efficient. By keeping track of your inventory levels, you can identify potential issues early on and take steps to correct them. For example, if you notice that you are constantly running out of a particular product, you can adjust your manufacturing processes to ensure that you have enough stock on hand at all times.

Overall, there are many reasons why inventory tracking is so important for Amazon sellers.

By keeping track of your stock levels and avoiding mistakes, you can:

  • Save money
  • Improve your operations
  • Protect your reputation with customers

2. Setting reorder points

Set reorder points for each product to ensure that you never run out of stock.

At Amazon, it is essential to monitor and adjust your reorder points for your inventory to meet the demand for your products. This helps ensure that you always have enough goods in stock to fulfill orders while quickly minimizing excess inventory costs. By tracking the sales of your products and other factors such as ordering trends and manufacturing lead times, you can determine a suitable reorder point that will minimize wastage and maximize efficiency.

There are several different ways to set reorder points for your inventory at Amazon.

One common method is to calculate an average number of days’ supply based on past sales rates and order lead time, then use this figure to set a target to reorder point. Another option is to use a safety stock calculation, which considers the amount of time that it would take to receive more products if an order was placed. While these methods can be useful for determining your optimal reorder point, you may find that a different approach works better for your specific business needs.

Ultimately, setting appropriate reorder points at Amazon is about striking the right balance between keeping enough inventory on hand to meet demand while minimizing costs and waste.

By taking the time to understand your products and customer base and learning from past ordering trends and sales figures, you can develop a strategy that will help you optimize your supply chain management processes and make the most of every sale. With this knowledge in mind, setting reorder points for your Amazon inventory can be an easy and effective way to

  • Increase efficiency
  • Optimize your ordering processes
  • Maximize profits

3. Get set up with FBA inventory management

Use Fulfillment by Amazon (FBA) to take advantage of Amazon’s world-class fulfillment network.

There are many reasons why sellers need to use Fulfillment by Amazon (FBA). Perhaps the most important reason is that it allows them to offload their products’ picking, packing, and shipping to Amazon. This can free up a lot of time and energy for sellers, allowing them to focus on other aspects of their business.

Additionally, using FBA inventory management can improve your chances of getting your products into Amazon Prime, leading to increased sales.

And finally, Amazon provides customer service for products they fulfill, so you don’t have to deal with unhappy customers. Overall, there are many advantages to using Fulfillment by Amazon (FBA) as a seller, and it is definitely something to consider if you are looking to streamline your business.

4. Use Amazon’s repricing tool

Take advantage of Amazon’s automated repricing tool to stay competitive on price.

When selling on Amazon, sellers need to keep their products competitively priced at all times. This is where automated repricing tools come in — they help sellers quickly and easily adjust their prices based on market trends and other factors, ensuring that their listings remain highly visible in search results and attract as many sales as possible.

With an automated repricing tool like Amazon’s Instant Repricing, you can take advantage of a range of powerful features that will help you get the most out of your listings. These features include:

  • Profit calculator
  • Stock forecasting & analytics
  • Competitive pricing analytics

Overall, using an automated repricing tool like Amazon’s Instant Repricing is a fast, easy, and effective way to ensure that your products remain competitive and help you maximize sales on Amazon.

5. Perform data analysis

Monitor your sales data regularly to identify trends and adjust your inventory levels accordingly.

Monitoring your Amazon sales data is essential for running a successful business on the platform. With so many different tools and resources available to you, there are many different ways to track and analyze your sales data.

Some of the most important insights that can be gained from monitoring your Amazon sales data include:

  • Identifying trends in demand can help future forecast sales and stock up on inventory in advance 
  • Tracking competitor pricing information lets you know when to re-price or set up discounts to stay competitive in the market 
  • Spotting opportunities for new products or categories that the market may underserve

By staying on top of your sales data regularly, you can ensure that you are always one step ahead of the competition and positioned for success on Amazon.

You can streamline your inventory management process and keep your business running smoothly on Amazon by following these tips.

Amazon seller inventory management can ensure that your inventory is well-stocked, orders are processed quickly, and customers are satisfied with their shopping experience.

Tips for handling Amazon inventory management

Amazon seller inventory management is key to success for an e-commerce business.

And if you’re looking for tips on effectively managing your inventory, look no further than Amazon.

As one of the largest e-commerce retailers in the world, Amazon knows a thing or two about managing inventory. They operate more than 1,137 fulfillment centers in the US alone. So, whether you’re looking for tips on how to streamline your inventory management process or utilize technology better to track and manage your stock, Amazon is a great resource.

Here are a few tips on effective Amazon seller inventory management:

1. Keep track of product information

In addition to tracking individual units, you can also track things like:

  • Dimensions
  • Weight
  • Barcodes
  • Other data

This can help you make the most of your storage space and avoid overstocking.

Product information is critical to any business for a variety of reasons.

First, it helps businesses keep track of their inventory and know when items need to be restocked. Second, it can be used to help businesses determine which products are selling well and which ones are not. Finally, product information can be used to create marketing and advertising campaigns that target specific items or groups of items.

In short, product information is an essential part of running a successful business.

2. Use empty space wisely

Don’t let empty space go to waste.

Use it to store extra inventory or seasonal items that you know you’ll need later on.

Any business knows that space is a crucial asset and must focus on routing manufacturing planning. It can be the difference between a thriving business and one that struggles to stay afloat. There are many ways to use space wisely, and it’s important to consider all of them when planning your factory, warehouse, and store layout.

3. Utilize barcodes

Barcodes can be a great way to keep track of your inventory and ensure that everything is accounted for.

There are many reasons why it is important to utilize barcodes for business. First and foremost, they provide a fast and accurate method for tracking large amounts of inventory or goods. Without them, companies would have to manually enter data about all of their products, which can be time-consuming and lead to mistakes when entering the information.

Furthermore, barcodes offer another benefit — they can store more information in a smaller space than traditional methods such as paper forms.

Businesses can save on storage costs while benefiting from the efficiency gains provided by having this type of technology at their fingertips. Lastly, barcodes can also help improve customer service by giving consumers more information about products and providing an easy way to track down specific items.

4. Stay organized

A well-organized inventory is the key to success.

Be sure to label everything clearly and put things in order so that you can find what you need when you need it.

There are many benefits to staying organized, both in your personal life and your business.

In business, organization is key to maintaining a successful operation. An organized inventory system can save you time and money by streamlining your ordering process, reducing waste, and maximizing efficiency. It can also help you keep track of your inventory levels to avoid stock-outs and always have the products or materials you need on hand.

For example, ABC inventory is a popular storage technique employed by manufacturers.

5. Keep an eye on your stock levels

Don’t let your inventory get too low or too high. Keep a close eye on stock levels and reorder items to avoid running out or having too much on hand.

First, you want to ensure you have enough inventory on hand to meet customer demand. If you run out of a product, your customers will go elsewhere. Second, you need to know your inventory levels to order more when necessary.

Keeping track of your inventory will help ensure that your business runs smoothly and efficiently.

There are several ways to keep an eye on your inventory levels.

You can track stock manually by entering numbers into a spreadsheet or database or using automated WIP tracking software to log sales and product levels automatically. Another option is to integrate both methods so that your staff can access the information quickly and easily.

Whatever method you choose, it’s important to consistently monitor your inventory to know which products are selling well and which items aren’t moving as much. This will help you decide when to order more of certain products and discontinue others. By keeping an eye on your stock levels, you’ll be able to run a more efficient business with satisfied customers who always have what they need from you.

6. Use forecasting

Demand planning helps you predict manufacturing trends and plan for fluctuations. 

Thus helping you keep your inventory levels just right.

Forecasting is an important strategy for businesses of all sizes and types. Not only does it help with planning, but it also offers several other benefits, including helping to guide your decisions and keeping you ahead of the competition.

With forecasting, you can make better-informed business decisions based on data that has been collected and analyzed over time. This allows you to stay ahead of trends in your industry and seize opportunities before your competitors do. Additionally, forecasting helps you identify potential risks that could affect your business operations to mitigate or avoid these risks.

7. Review your processes regularly

Take some time to review your Amazon seller inventory management process and make sure that it’s still working well for you.

Several key reasons why regularly reviewing your processes is a good idea.

One of the most important benefits is that it allows you to keep up with the latest regulations surrounding inventory management to stay in compliance. Another advantage of regular reviews is that they allow you to identify areas where improvements could be made. This may involve tweaking existing procedures or even entirely new ones, depending on what issues arise during your review.

Overall, regularly reviewing your inventory management processes is essential for effective operations.

Taking the time to do so can ensure that your business runs as smoothly as possible.

Additionally, this process can help you identify areas where improvements could be made, ultimately leading to even greater success for your company. Therefore, if you have not already been conducting regular reviews of your practices, now is the time to start doing so. Your business will thank you for it in the long run.

8. Seek help if needed

If you’re struggling with inventory management, don’t hesitate to get professional help.

Inventory management is an important part of any business, as it allows you to keep track of the items that are available in your inventory and monitor their usage. This can help you ensure that you have an adequate supply of products at all times, which helps to ensure customer satisfaction and maintain a steady flow of income.

However, if you struggle with inventory management, it is important to seek out help from qualified professionals who can provide guidance and support.

A good inventory management team will be able to help you set up efficient systems for:

  • Tracking your inventory levels
  • Reducing waste
  • Ordering new supplies when necessary
  • And more

With the right help, managing your inventory can become much easier and less stressful.

If you’re struggling with this aspect of management, it’s important to reach out for support and guidance. Alternatively, you can look online for inventory management guides and software.

As you can see, there are many different reasons why it is important to seek help with Amazon seller inventory management if needed.

Whether you need assistance setting-up systems for tracking inventory levels or guidance on reducing waste, working with a professional team can make all the difference in the success of your business.

So don’t hesitate to get help when you need it – your business will thank you.

Many great tools and services make managing your inventory much simpler. For example, you could use ERP manufacturing software to automate your repetitive day-to-day tasks — manage your sales and manufacturing orders from one place by integrating with your Amazon account.

These are just a few tips for handling Amazon’s inventory effectively.

With the right tools and planning in place, it’s possible to have a streamlined process that makes life easier and helps boost sales.

Does Amazon own their inventory?

Amazon does indeed own some of the items that they sell. For example, in 2014, 40% of items sold came from third-party sellers.

If you sell items via Amazon, you don’t have to be concerned about who owns them. The items will still belong to you (until sold). Their business model is similar to consignment inventory. However, as an FBA member, your items are simply held by Amazon and distributed after paying a collection of fees.

Benefits of Automated Amazon Inventory Management

When running an online business, it’s essential to have a good inventory management system in place.

Without one, tracking your products can be difficult and time-consuming ⁠— plus, there is the risk of errors being made and stock going missing.

The best way to manage your inventory effectively is with automated tools. Automated Amazon inventory management systems help you keep track of which products are selling well and which ones aren’t and let you know when stock levels are low so that you can reorder before any issues occur.

A good automated tool for managing your Amazon inventory will also save you a significant amount of admin time and effort — simply set up the program once and let it do all the work for you.

Plus, with everything synced across multiple channels, there’s no need to re-enter or review data on each individual platform.

So what are the benefits of using automated tools like this?

1. Minimize admin time and effort

As we mentioned above, one of the key benefits of automating your Amazon inventory management is that it will save you a significant amount of admin time and effort. Simply set up your system once and then leave it to do all the work for you — no need to continually keep track of inventory manually.

2. Reduce the risk of errors

Automating your Amazon inventory management will also help to reduce the risk of human error, which can often be a problem when tracking stock manually. By using an automated tool, you’ll know exactly what is selling well and what isn’t, so that you can make informed business decisions with confidence.

3. Get real-time updates on live stocks

With automated tools, you’ll always get up-to-date information about stock levels in real-time — this makes forecasting easier than ever before and ensures that reordering is done at the right time.

4. Save synchronization time

With an automated inventory management system, all of your product information will be constantly synced across multiple channels, which means that you no longer have to manually update each platform separately. This not only saves you valuable admin time but also reduces the risk of errors being made along the way — no more duplicate data entry.

So, what Amazon inventory management tools are available for manufacturers looking to optimize their sales, manufacturing, and inventory management?

Katana ERP inventory management for Amazon sellers

Katana ERP inventory software is a third-party inventory management software that integrates with your Amazon account, giving you a centralized source for managing your sales, inventory, and manufacturing operations — in-house or outsourced.

Whether you’re using Amazon Seller Central or Fulfillment by Amazon, Katana’s end-to-end traceability gives you complete control over your Amazon inventory management. Katana gives inventory management for Amazon sellers the tools for real-time insights to ensure operations are completed on time and purchase management is optimized to avoid stockouts.

Thousands of Manufacturers with Katana make use of Amazon inventory management. Join them by booking a demo with Katana today.

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James Humphreys

Senior Content Manager

James Humphreys has produced content on manufacturing and inventory management practices for 5+ years. He began his journey into writing via the creative industry, writing and producing plays, some of which toured the UK and Europe.

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