According to Statista, half of Amazon’s sales are from third parties. Selling on Amazon can be very rewarding, but it’s not an easy task, especially once you start selling in bulk. As your orders grow, so do your inventory needs. To be successful, you need to have a solid inventory strategy in place.

This article covers 5 tips to improve your Amazon inventory management. But first, we’re going to explain why it’s important for Amazon sellers to manage good inventory in our amazon PPC guide.

Reasons that Amazon Inventory Management is Crucial for Amazon Sellers

Here are the main reasons why you need to manage your Amazon inventory.

  • Attract Customers and Make More Sales If you don’t run out of supplies, your customers will buy from your competitors.
  • Reduce Storage Costs Too much inventory will put your money off the seller’s goods and increase storage costs.
  • Reduce Inventory Loss – By constantly monitoring your inventory levels, you can minimize losses from poorly managed storage, error receipts, and employee theft.
  • Minimize Errors – When you sell defective items, inventory management can help you detect expiration dates and avoid damage from damaged or non-refundable items.

About half of small businesses don’t have a proper inventory management system, but it’s easy to get more granular control over your Amazon inventory.

5 Tips for Better Management of Your Amazon Inventory

1. Using the Amazon Own Inventory Management Software

Manually tracking your inventory in documents or spreadsheets is time-consuming and erroneous. Inventory management software is the best way to automate your inventory management tasks and make sure you have enough, but not too much, year-round. Retailers often see warehouse management software increase their warehouse performance by about 40%.

The Amazon Seller Central Dashboard has many built-in tools that you can access for free.

Within the dashboard, Amazon Selling Coach reports important inventory data to help sellers track inventory levels and purchase needs. By tracking your sales and inventory trends, Amazon inventory management tools tell you how much you’re selling on Amazon on a daily, weekly, and monthly basis. You can then set trends to determine the desired inventory levels for the product at different times. This comprehensive view of your sales and inventory trends is the key to making informed purchasing decisions.

2. Getting a Hang of Your Inventory Turn Over Rate:

How fast you sell through your Amazon inventory is usually called your inventory turnover rate. To determine your inventory turnover rate, you need to know how fast your products are selling on Amazon. From this information, you can estimate how much inventory you will need to maintain inventory between inventory supplies. It also helps to avoid buying more or less when re-ordering stock.

Generally, the goods that Amazon sellers import are aimed at a 3-month inventory turnover rate, which means that you expect sales to be sold by inventory order in 3 months. One of the best ways to predict your inventory turnover rate and rearrangement needs is to use a predictive tool that tracks the daily sales trends of your product. Amazon’s built-in inventory forecasting tool, Amazon Sailing Coach, detects sales based on your available inventory and recommends the quantity you need to fulfill the order from time to time through your Sailor Central Dashboard.

3. Understanding the Lead Times of Your Supply Chain:

Your supply chain refers to the movement of inventory from initial purchase to delivery to your warehouse. Lead time is when it takes time for the order to arrive and for the inventory to arrive. Knowing your supply chain and lead time can help you determine who, who, where, and when you are involved in sourcing, receiving, and storing Amazon inventory.

To make sure your supply chain is running smoothly, you have an overview of your suppliers’ preparation and supply plans and you have an emergency for the worst-case scenario. This is especially important when using overseas suppliers as ship delays can take weeks to resolve. Make sure you have stockpiled supplies to meet unexpected delays in the delivery of goods overseas.

4. Devising a Plan for Seasonal Sales Fluctuations:

Seasonal demand and holiday purchases affect inventory as customer demand and supplier lead time take longer. It is important to know which items are moving fast at certain times of the year.

It is important that you anticipate your inventory level at least a few months in advance. You want to increase the number of goods ordered in high sales cycles and reduce your orders for out-of-season product orders.

It is also important that suppliers adjust the growing season times for inventory during the off-season. This allows you to place orders that are delayed due to other factors such as weather requirements and weather conditions. By maintaining open communication with your suppliers, you can also avoid unexpected delivery delays and other hassles.

5. Set a Strategy for Various Promotions and Sales:

Promotions like sale prices or free shipping offers are useful to grow your Amazon business. However, increased sales due to hot promotions can wipe out your inventory before your next delivery, resulting in backlogs, angry customers, and low Amazon rankings.

One way to avoid this is to set a limit on the number of items advertised in your inventory. Once this number is reached, you can end the process and sell any remaining shares at a higher price to avoid running out of stock.

If you intend to sell in full, you will need to set a limit of four hours of ad sales. You can find this number in Seller Central. Four hours is the key here, as it can take up to four hours for Amazon to complete an operation. This allows you to provide enough inventory to cover sales that will come as soon as your promotion is over.

Another way to make a successful operation is to order a reserve of advertised products from your supplier with a future shipping date. If your process is successful and you need immediate warehouse shipping, you can contact the supplier to postpone the shipping date. However, if the promotion is delayed, you can cancel or extend the shipping date of the repayment order to avoid filling it.

Concluding Thoughts

It takes time to build your reputation as an Amazon seller, and you can’t afford to lose your reputation or hard-earned space due to poor inventory management. Use the tips shared in this article to manage your inventory in a better and more efficient way and stay competitive on Amazon. If you want insights on developing and growing your business then visit