Any Amazon FBA seller knows that managing inventory levels in FBA is not an easy task. You need to control the flow of inventory from your suppliers to FBA so the right items are restocked at the right time. Too little and you run the risk of going out of stock which affects your listings & seller metrics. Too much too soon and your margins are eroded by exorbitant FBA storage fees. If you plan to place stock in FBA in the 4th quarter you need to be sure that you will in fact sell your products or higher storage fees in the 4th quarter will be the worst Christmas present you’ve ever received. If you have long lead times or don’t have tight control over inventory availability for shipment to FBA the restocking dilemma is a one that can tank your business. So what are your options?
Amazon provides some limited inventory management and forecasting tools in Seller Central, but what if you also sell on other channels and/or need more sophisticated analysis of sell-through, blended with the unique nature of your supply chain. There are 3rd party software programs that assist with not only managing inventory levels in FBA, but also integrate other channels and provide higher level analysis, reports and tools.
Another related approach is to maintain more control over your inventory replenishment into FBA by storing inventory and shipping the right quantity to FBA at the right time. If you also sell direct through your own website and other marketplaces you can maintain one inventory to support fulfillment for all sales channels, including FBA replenishment.
Once you’ve applied an approach to controlling inventory levels in FBA warehouses you still have to get your products to the FBA warehouses. Amazon has taken a page from the compliance enforcement departments at retail chain distribution centers and become quite specific about how inventory is prepared for induction into their facilities and communicated prior to shipment. Not only do you have to prepare shipments in Seller Central to advise Amazon what you want to send, but once they split up your shipping plan into multiple shipment IDs you now need to separate the inventory accordingly (or you can pay placement fees and have Amazon do it for you). Unless you’re selling through Commingled Inventory in which case the UPC will suffice, you will need to apply FNSKU barcode labels to each selling unit of inventory, polybag or over pack items as necessary, pre-assemble bundles or kits, apply 2 dimensional barcode labels to each carton to indicate any mixed FNSKUs inside of each carton, apply a barcoded carton ID label generated from Seller Central to indicate the shipment ID and other shipment information, and if shipping UPS or Fedex to FBA you will need to measure & weigh each carton and input the information per carton to create UPS/Fedex shipping labels using Amazon’s accounts and apply them to the correct cartons. Seems really easy right?
Product marketers that source inventory and sell on Amazon and other channels tend to not also have a core competency in doing all of the above functions, as well as run a warehouse, hire & maintain warehouse staff, and keep up to date order & inventory management systems. Usually your time is much better spent procuring inventory, marketing & selling product, maintaining your e-commerce presence on Amazon and other marketplaces & sales channels……oh and don’t forget about saving some time for yourself and your family.
This is where an established and professional fulfillment center comes into play. Outsourcing product storage, FBA prep and replenishment and pick & pack order fulfillment can allow a product marketer to focus on their core competencies and not try and learn new ones. Beyond doing the job right, a successful 3PL fulfillment center can also provide valuable insight in streamlining your distribution model, save money on shipping through volume discounts with carriers and strategically placed fulfillment locations, apply variable pricing to align your costs with your revenues (which is particularly valuable for seasonal or promotion-based businesses that would otherwise occupy facilities 12 months per year), scale with your growth and enable you to participate in programs like Seller Fulfilled Prime as alternative to FBA.
About Swan Packaging Fulfillment: We were established in 1986 and have evolved with the market and adapted to the demands of sellers for the past 32 years. We offer a combination of high capacity warehousing in NJ and CA, direct-to-consumer order fulfillment, kit assembly & packaging services, API integrations to all shopping carts & marketplaces (Amazon, eBay, Walmart.com and others) and many order management systems & ERPs. Our integrated suite of Amazon support services includes FBM fulfillment, support for Vendor Central and Vendor Express, Seller Fulfilled Prime and comprehensive FBA Prep services (including FNSKU labeling, polybagging, kitting/bundling and Seller Central administration). Centralizing all of your inventory in our facilities allows you sell across channels and focus on running your business. Please visit us at www.swanpackaging.com and contact Tim Werkley at 973-790-8417 or firstname.lastname@example.org.
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