Amazon Prime Day is coming soon Is your inventory still sufficient? How should you distribute your inventory in a reasonable way?

Is your inventory sufficient for Amazon Prime Day? How should you distribute it?

Half of 2023 has passed in the blink of an eye, and looking back at the past five months, the market has not been optimistic.

Amazon’s net sales for the first quarter were $127.358 billion, a 9% increase compared to $116.444 billion in the same period last year. Excluding the negative impact of $2.4 billion brought about by exchange rate fluctuations, Amazon’s net sales in the first quarter increased by 11% compared to the same period last year.

Among them, Amazon’s advertising business has grown rapidly, with revenue increasing by 21% year-on-year to $9.5 billion.

In addition, sales in physical stores increased by about 6.6% to $4.8 billion. Amazon’s e-commerce market share and the number of Prime members in the United States have stopped growing. The first-quarter financial report showed that the revenue of Amazon’s third-party seller services surged by 17.7% in the first quarter, reaching $29.8 billion.

Based on the latest financial report, the expert still maintains the view that the Amazon market is always improving. However, when the promotion of major brands exceeds 9% and accounts for a relatively large share, it inevitably indicates that many small sellers are stagnating and may even decline or exit. This also proves that the Amazon market has approached saturation and stability, and is no longer a market where you can step on a popular product and get rich overnight. Therefore, if you are still observing the market, you must think twice before acting. If you do not have a strong supply chain support or sufficient funding, then Amazon is no longer an easily accessible market.

Currently, the market competition is fierce, and orders are relatively unstable. Therefore, it is particularly important to control inventory. Putting aside optimization and other early preparations, the most important thing is to make an accurate estimate of the inventory of the product. Often, the ultimate failure of Amazon sellers is due to excessive inventory and long storage time, resulting in high storage fees.

So today we’re going to talk about inventory, how to estimate it, and how to better manage restocking.

How to restock new products?

First of all, let’s start with restocking new products. Many fans often ask how many units should they order for the first batch. 20 or 50? Actually, this depends on the market demand and your own strength. We need to analyze the sales volume of competitors, the size of the market, and the quantity we can produce. If we ship by sea, we must estimate at least two months of sales. Another thing is product testing, and now VINE has sent out 100 testing units. If you are confident in your product, this is a good opportunity to increase the number of reviews in the early stages. If it is a high-end product, you should send as many as possible, because now reviewers are more difficult to find and it is unlikely that all of them will be taken. Of course, this does not apply to products with high unit prices.

So according to this logic, when controlling inventory in the early stages, we must consider the number of testing units, as well as the potential positive impact of reviews on traffic and conversions. Therefore, sales may also increase. Based on the current market, if you have a decent product and are ready for testing, it is generally recommended that the number of testing units should not be less than 100, and if it is a private model product, 200-500 units are acceptable. Amazon has an initial market, and if the product is good, selling hundreds of units is not a problem. However, the most important thing in the future is customer feedback. If the feedback is good and you have many positive reviews, then congratulations, this product can be sold steadily. But now almost every category is saturated, so it will be difficult to achieve explosive sales at once. Generally, a link will have a stable period and a rising period, so some optimization and advertising adjustments are needed here. But remember, any adjustment is periodic and needs to last for a period of time, maybe a month or two, so that the level of traffic can truly change.

How to replenish stable links?

Next, we will look at how to replenish stable links. After we have the original data for our links, what we need to do is to analyze the data reasonably.

First, we need to know the sales data, which is the sales data of the past 3 days, 7 days, 14 days, and 30 days. Understand the recent sales situation of the product, whether it is stable, and the monthly sales situation.

By setting the weight of these four sales, we can get a comprehensive daily sales. ERP can easily assist us in completing this action.

But the most important issue is how we balance this ratio. If the product is not out of stock and has been stable, then I would suggest that the weight of sales in the past 30 days should exceed 50%, or an average distribution is also possible. If the product has been out of stock in the past two months, and the product has not exceeded 30 days since it arrived, then reduce the weight of the past 30 days and focus on increasing the weight of the past 14 days and 7 days.

If it has been more than 30 days since the arrival of the product, and the recent sales are climbing, then you can increase the ratio of the past 7 days and 3 days. The standard for increasing the ratio is that a single condition exceeds 25%.

Then, we can set the stocking time, which also has several dimensions. We just need to input our actual situation during ordinary times.

After you have set it up, you can get the purchase quantity and the recommended storage quantity calculated by the system.

Then, we can also check whether our inventory is tight by the inventory status. This can also be regarded as inventory warning.

Through ERP, we can improve our efficiency and manage multiple products more quickly and conveniently. Prime Day is coming, and I hope that all sellers can plan their inventory well before the festival and welcome the sales peak season in the second half of the year!

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