How to strategise your Amazon inventory management during Q4 2020
Amazon inventory management is incredibly hard during Q4, but this year it is guaranteed to be even harder. Let’s face it, 2020 hasn’t been easy since COVID-19 hit and Amazon became a lockdown necessity. With Q4 including Amazon’s 5th Prime Day as well as all the usual retail holidays found within this quarter, Amazon FBA sellers have even more reason to ensure their inventory management is optimised for this quarter.
On July 13, 2020, Amazon announced that they will be placing FBA inventory management restrictions during Q4 within their fulfilment centres. This is thought to be a security measure to ensure that the Amazon FBA service will not be as strained as it was during March this year, where Amazon was forced to freeze FBA shipments for non-essential products to cope with the increased traffic and demand on the marketplace.
How will Amazon’s upcoming inventory management restrictions affect FBA sellers?
- Sellers will be limited to only allow for stocking approximately three months’ worth of inventory.
- Sellers will need to maintain a score of at least 500 regarding their IPI (Inventory Performance Index) to avoid storage limits for the rest of the year.
- Brands with limited inventory may face supply chain struggles during peak sales seasons.
- Brands who compete for the same ASIN may struggle for FBA shelf space.
- Any adjustment by Amazon to improve quantity levels may be too late for FBA sellers to utilise.
- FBA Inventory processing times may become longer than they usually are during Q4 due to COVID-19 countermeasures in place.
How to plan your Amazon FBA inventory for Q4 2020
Maximise your inventory forecast
Ensure your inventory lasts the 3-month coverage window. Remember that Amazon traffic skyrocketed during UK lockdown.
Send your inventory out ASAP
Due to processing delays, it is imperative you send your FBA inventory to a fulfilment centre as soon as possible to ensure that your ASINs are accepted.
Utilise your data
Amazon data can help in determining which ASINs should be given high priority over others. Looking back at historical Q4 sales data from previous years may surprise you and help you establish which ASINs will have the best chance to improve sales over the quarter.
Make sure you have a Plan B:
Although Amazon FBA has proven its resilience in functioning as it should this year, Q4 is rumoured to place a much larger strain on the service. FBA sellers should consider a backup plan in case the service cannot keep up with the number of orders or stock runs out quickly within Amazon’s fufilment centres. Services such as Seller Fulfilled Prime, Fulfilled by Merchant or even third-party logistic companies will help in relieving pressure of potential disruptions.
Struggling with your Amazon inventory management skills?
Inventory management is just one small task when it comes to selling successfully on Amazon. In fact, managing your Amazon account operations can be a full time job in of itself. This year has proven the need to making sure that your Amazon account is running efficiently in all aspects, not just Content & PPC.
Luckily, Molzi understands every step of the Amazon seller flywheel and knows what areas tend to get forgotten. Molzi can provide bespoke training to help you manage your inventory on Amazon effectively by yourself or equally take it off your hands altogether to ensure that planning your inventory management strategy for 2021 is a thing of the past!