30 Nov What Happens When I Run Out of Amazon FBA Inventory?
One of the most critical parts of Amazon FBA inventory management is calculating the right amount of product units needed in stock. If your stock level dips too low, you are at risk of running out of products. This usually happens when demand for products is higher than expected. The amount of inventory and safety stock is too low to fill all orders.
A stockout situation can happen due to delays in the supply chain, a shortage of working capital, or poor cash flow management.
Running out of stock can have a negative impact on your Amazon listing and account and can impact your future sales. Ultimately, it can mean losing against the competition.
To prevent this, you need a strategy to ensure that you never run out of stock regardless of the circumstances.
RUNNING OUT OF AMAZON FBA INVENTORY
When you run out of stock, Amazon will automatically remove your listing, marking it as “inactive”. And when you don’t have an active listing, you can’t sell!
If a product is not available for a customer order, three outcomes are possible:
A stockout situation can happen due to delays in the supply chain, a shortage of working capital, or poor cash flow management.
DEMAND FORECASTING
As an Amazon seller, it’s vital to invest in sharpening your sales forecasting. This process is all about anticipating demand so you can determine what products to order, how many of them, and when.
Demand forecasting lets sellers anticipate how much inventory to order and when. You can even leverage reporting and analytics tools to determine the stock level. With these data points, you can plan your stock replenishment cycle to prevent going out of stock.
Knowing where your business is going will help you to plan ahead in terms of your Amazon FBA inventory, investment, and marketing.
With demand forecasting, you can determine the reorder point by going off your sales history, current order quantities, and on-hand quantities.
The Amazon restock inventory tool provides recommendations on products to restock, suggested replenishment quantities, and ship-by dates. Amazon’s restock tool helps you keep track of your inventory levels so you can maximize sales by meeting product demand while avoiding overstocking. It essentially takes the guesswork out of determining turn or the velocity at which sales occur for a particular SKU.
GET SUPPORT
Every seller needs to achieve some level of flexibility in their inventory management cycle.
Some businesses run into stockouts because of a lack of funds to purchase new inventory. They struggle to ensure they have the working capital available to reinvest in stock and inventory purchases.
This can be particularly challenging when there are time-sensitive opportunities to scale up (like the holidays) but no funds or working capital on hand.
Luckily, a cash advance can solve this problem for you. A cash advance can provide you with an advance based on your future sales revenue.
Access to cash now can help you invest in your business, launch new products, manage inventory, or negotiate better payment terms with supplies.
