How to Manage FBA Inventory in Q4
Managing your FBA inventory in Q4 is a balancing act for sellers. In fact, Amazon recently imposed restock limits in October 2022. This left many sellers scrambling for Q4 FBA tips to manage inventory. Even the best planned supply chain and forecasting can be turned upside down if Amazon simply refuses to accept your units. Here are the top Q4 FBA tips we recommend to manage inventory.
Q4 FBA Tip #1 – Nurture Supplier Relationships
Keep Your Customers Close, But Your Suppliers Closer
This may sound basic, but listen up. Suppliers are the faucet that funnels inventory. So if your short on products, you need suppliers in your back pocket. However, if you have a rocky relationship with you supplier, they might not prioritize your request when you need it most. Again, if you are on good terms with your supplier, and need products in a pinch – they can get those shipped out asap.
Good relations with your supplier prevents inventory ‘stock-outs’. Stock-outs impact your IPI score and seasonal restock limits. As such, clear communication with suppliers can go along way to shoring up inventory levels quickly. For example, a reliable supplier will offer insight on seasonal production ques, manufacturing times, shipping solutions and more. These are key to ensuring you have control of your supply chain to Amazon. The bottom line is, if you treat them right, they will treat you right. And that goes a long way towards Q4 inventory management.
Q4 FBA Tip #2 – Maintain 60 Days of Supply
Balance Your Sell Through Rate with 60 Days of Inventory
One of the Q4 FBA tips we recommend is to maintain 60 days of supply stocked at Amazon at all times. This should cover seasonal sales without selling out. Simultaneously, keep importing smaller batches of products to keep you restocked within the 60 day supply parameter. This prevents over-stocking, while avoiding stock-outs. This is a tricky balancing act between not having too much or too little inventory. However it directly impacts your Sell Through Rate – an important metric towards your coveted IPI score.
What is a Sell Through Rate?
Your Sell Through Rate reflects the balance between inventory levels vs sales. The calculation is simple. Divide the total units sold & shipped to your customers over the last 90 days by the average number of FBA inventory units during that same time. Your Sell Through Rate is available to review in as a FBA Inventory Tool in Seller Central.
How is Sell Through Rate Measured?
A Sell Through Rate is measured between 1-7. A score of 1 is poor. A score of 7 or above is great. When your sell through rate is low it usually means you’ve over stocked too many items. That, in turn, means we need to start reducing your FBA inventory.
Q4 FBA Tip #3 – Reduce Excess Inventory
Too Much FBA Inventory in Stock?
Reducing excess inventory is no easy task. In fact, if everyone could do it, it would be done already! We have 5 Q4 FBA tips to reduce inventory and protect your IPI score against future restock limits.
- Run Promotions
- Raise Keyword Bids
- Create a Removal Order
- Liquidate Inventory
- Donate Inventory
Q4 FBA Tip #4 – Expect the Unexpected
Plan for Seasonal FBA Issues & Contingencies
There exist a gauntlet of mishaps waiting in the sidelines of your supply chain. Make sure you plan for contingency solutions before they rear their ugly heads. Here’s four Q4 FBA Tips to dodge inventory management disasters.
Get ahead of delays with your supplier – have a back up manufacturer. Stock appropriately for any shipping delays – maybe air express 10% of your load in ahead of time, to avoid sea port delays.
Customs delays – build in extra buffer time if your shared shipping container is ‘randomly selected’ for inspection.
FBA warehousing delays – make sure you have FBM set up and ready to go – even if Amazon’s Prime program is ready!
Long story short, it pays to have alittle extra inventory warehoused outside of Amazon in the event you need to pull it to prevent a stock-out of your products. Partner with a 3PL ahead of time to hold a couple pallets of product in these worst case scenarios. FbaZoom offers affordable storage and access to inventory when you need it quick.
Q4 FBA Tip #4 – Insufficient Inventory Levels
Products Selling Too Fast?
You control the supply and demand for your products (if they’re already selling well). However, if they sell too well, you may need to lower demand. How does a seller do that? Here’s some quick Q4 FBA tips…
Firstly, pause advertising. No sense in brining people to a product listing that is about to run out of stock.
Secondly, bump the price up. This will price certain people out of the shopping funnel. However, for others, it might convince them you offer a premium product – in which case, this is a win/win for your and the customer.
It’s best to slow down sales before running out of inventory altogether. This will prevent any stock outs and keep your IPI healthy enough to dodge any future restock limitations.