How to Maintain a Healthy Stock Level (With Pricing)

October 4, 2018 by Price-Fuel

stock level

As 100,000 sellers on Amazon make more than $100,000 a year in sales, selling on Amazon is big business. However, if your stock level runs low, you can face serious penalties.

Here are 4 ways to prepare yourself to learn about and maintain a healthy amount of stock by managing your price.

1. Get To Know What It Means To Run Out

If you’re at risk of running low on your Amazon inventory, you need to figure out what that can mean on Amazon. In a brick and mortar store or through mail order, if you run out of something, that’s a lost sale, plain and simple. However, you can bounce back because you’ll get that item in again and be back where you started.

When you run out of something on Amazon, the effects can follow you for a while. Once you’ve shown that your shop runs low on stock, even just once, you could have your product listing flagged.

When Amazon ranks a search based on “relevance”, they take into account how often you’ve run out of stock. If you’re on Amazon and don’t have an item in stock, you can’t accept orders for back ordered items like you can on your site. If you don’t have anything in stock, your listing will disappear from search results.

When that happens, especially over a long period of time where a natural disaster or product shortages have impacted production, you face serious damage. Being out of the running is difficult and the longer you stay out of the running, the further that Amazon will penalize you. Once you do get your product back in stock, you’ll be struggling to claw your way back up the rankings.

If you feel like you’re burning through stock, managing your pricing so that it increases as you get lower so that you have time to replace your stock.

2. Use Amazon Inventory Management Tools

Amazon helps to give you control over your listings by offering inventory management tools. If Amazon developers know one thing, it’s how to manage data. When Amazon makes data available to you as a seller and a user, you should take advantage of it and assume it’s important.

Amazon’s algorithms are so robust that they can connect with the data on your Seller Central dashboard. If you know what the data is that Amazon provides, you can then make use of the Manage Inventory tool. With it, you can see all of your active and inactive listings.

If you don’t plan on bringing a product or service back, you can suppress the listing. Here you can add products to your inventory, change your quantity, and manage your pricing. For shops with huge inventories, you can perform a bulk upload or link up to your own third-party inventory software.

Your data will be in your Seller Central dashboard either way. Don’t forget to try out the Selling Coach tool.

With that, you can watch trend and see what the estimates Amazon can provide for how long your inventory will last you. Get “low stock” alerts and reorder in moments, saving yourself from ever running out of stock entirely. Using this tool will also help you to maintain the optimum pricing or to increase it if you think you need to save the stock you have.

3. Plan Your Inventory Orders

One of the best ways to plan out your inventory orders is to pay attention to lead times and watch the forecasting that Amazon provides.

The prevailing theories of inventory management say that you should always keep just enough of your inventory around to fulfill orders between shipments. While it sounds obvious and practical, it’s never quite so easy.

There could be any number of acts of god or shortages that could lead to changes.

To avoid overordering, you need to be looking at your inventory levels constantly. Comparing them to sales volume is the smartest move you can make. With the help of the Selling Coach tool, you can stay alerted of drops in inventory. When your orders are based on data, they’ll always be more accurate.

Forecasting your inventory is a challenge for any business owner. Who knows how much you’ll really need between ordering and arrival? Thankfully, by measuring trends inside your company and what’s projected by Amazon, you can get a clear idea of what you should or shouldn’t do.

Your sales model will make a major difference in what kinds of lead times you have. How often you restock and how long items take to arrive are dependent on the sales model you put in place. It also depends on the company that you choose to fulfill your orders.

4. Keep Some Cash Handy For Purchases

We’ve all seen our favorite local businesses, restaurants, or coffee shop in the middle of an inventory shortage. Whether it’s our favorite takeout place that suddenly has to use large containers for everything or our favorite cafe using storebought cups, it happens. When inventory drops for any reason, we need to be prepared.

Since Amazon operates on a system where you get paid every 14 days, you only get paid twice per month. IF you’re looking to have cash on hand to buy supplies when you need them, that might not be possible.

Since you have to balance things out, you won’t be able to get inventory at a moment’s notice. You need to keep things in stock at all times so you don’t have to rely on rush ordering or running out of something. Having some money on hand can be useful.

Pricing higher when you’re running low is the best move.

Stock Level is A Challenge to Manage

Keeping your stock level in line is a challenge for companies of every size. However, as your company grows, it’s hard to keep track of every single item in your shop without tools to help. Thankfully Amazon gives you the tools you need to do the trick.

If you want to try out our services to help you sell on Amazon more efficiently, sign up with us today.

Leave a Reply

Your email address will not be published. Required fields are marked *

Are you ready to dominate your market?