The next-in-line tip is inventory planning or management. Managing inventory is the heart of the fulfillment by Best Amazon FBA Inventory Planning; therefore, stay focused as I take you through essential points that will help your business to excel.
Moreover, the following tips will help you increase the Inventory Performance Index (IPI) score. IPI score ranges from 0 – 1000, where 450 – 550 is considered a good score. A score below 350 will add overage fees and limit the IPI storage.
1.Two Months of Inventory | Best Amazon FBA Inventory Planning
When launching a product, it is wise to have two months of inventory. Running out of stock will not only give competitors an edge but also affect your ranking on the site. These rankings take time to get back on track; thus, two months of inventory is necessary to be on the safe side
On the other hand, too much stock can be costly, and you’ll end up paying storage and inventory fees. The worst case could be that you are sitting on a dead product, losing all the investment. Therefore, two months of inventory is perfect, which can be estimated on the product type and market demand; usually, 300 – 500 units are considered safe.
2.Don’t Send All the Stock to Fulfillment Center | Best Amazon FBA Inventory Planning
For instance, you order 500 units for two months of a product. Sending all the stock will cost you storage charges which can lower the profit margin, especially in the later months of the year when charges are almost three times the early months. Send 250 units for the first month and as the sales climb and you are left with 50 units at the fulfillment center, send in the remaining 250 units. The next batch order should be placed after the remaining 250 units are sent. To ensure disrupted supply for the next two months.
3.Predicting the Sales Velocity | Best Amazon FBA Inventory Planning
Predicting is always a difficult task, but there are ways in which an estimate can be reached. It is recommended not to use meat-and-potato keywords as there is not much social proof and competing against top sellers is difficult for beginners. Let’s suppose you do rank high with short-tail keywords, but then you have to manage the inventory by ordering in bulk as sales are quite high. It would be even more disruptive if the stock’s finished. Try using two long-tail keywords as a beginner to understand the market trend and familiarize the business working mechanism. Later, you can use one long-tail keyword and two short-tail keywords to boost sales concerning inventory.
200 UNITS LIMIT RESTRICTION | Best Amazon FBA Inventory Planning
Temporarily, brand new ASINs have a restriction of 200 units in the US. There are a couple of options to overcome this restriction by following the terms and conditions of Amazon FBA.
- Start with smaller quantities and build up your limit. You can build up to reordering 1,000 units.
- Use FBA (Fulfillment by Amazon) and FBM (fulfillment by Merchant). Sell as many units as you have ordered since there is no unit limit restriction on FBM. However, FBM
- will come up with challenges like shipment issues, refund management, customer support, storage area, and more, all handled by the seller.
- You can order as planned, say 1,000 units, but use a third-party prep center in addition to FBA.
So these are best amazon FBA inventory planning. We have to follow these to make best planning for amazon FBA. These tips help us to increase our inventory performance. If you want to learn more about amazon FBA business then visit amazon FBA.