How to maximise profits on Amazon using the right inventory management plan?

A compass that points to the word Profits

Almost half of the small businesses on Amazon fail to chalk up the coveted profitability level because they rely on ill-conceived inventory management strategies. In e-commerce, being out of stock or using excess storage space due to an oversupply is synonymous with a fatal mistake. If this is how you take control of the goods you sell, your margins are probably not as high as you expected.

A badly planned inventory management process is a surefire way to end up with nothing. It erodes your profits and prevents your business from being where you want it to be, leading to:

  • Lost sales and customers. When a shopper is ready to add your product to their cart and then finds out it’s out of stock, this obviously doesn’t bode well for your business. They simply buy that product from your competitors.
  • Unnecessary costs. Overstocking may be as detrimental to your profits as understocking. If you supply more products than necessary, expect to be charged high storage and fulfilment fees. On top of that, if you offer perishables, they may pass their sell-by dates, causing additional losses in product damages.
  • Visibility issues. Amazon uses a profusion of factors when determining how high your goods should be listed, one of which is the effectiveness of your inventory management methods. So, if your listings have recently gone down to the bottom of search results, you now know why.

It may be an arduous task to manage inventory, especially when your company’s turnover is hundreds of goods per month. But it’s of vital importance to make sure you do that right unless you want to remain on the sidelines.

Top 3 tips on inventory management optimisation

A businessman is working on inventory management

Ideally, your products should be in stock without remaining on the shelves of a warehouse a second longer than it’s needed. That is why the most effective inventory management strategies are always made up of:

1.  Stock analysis tools

These days, there are many tools designed to improve inventory management. In addition to those in your Seller Central Account, you can use third-party software to better forecast your sales, analyse stock levels, track turnover rates and determine order lead times. You won’t be able to stay on top of your inventory without these data.

2.  Plan B

Every Amazon merchant knows that things can change in the blink of an eye when selling online. Your sales directly depend on the time of year, meaning that fluctuations are inevitable. To maximise your profits in both low and high seasons, free up some amount of money to respond to market changes quickly. Extra financial resources will help you adapt your inventory management procedures to the growing demand of customers; and, on the other hand, reduce the orders when they out of season.

3.  Third-party services

If you want to stay profitable, regardless of the market fluctuations, Minatus is a company you’ve been looking for. We offer a range of all-encompassing inventory management solutions to save Amazon merchants the bother of ensuring product availability and keeping up with the turnover. Minatus is committed to skyrocketing your profit margins by staying on guard against any issues related to your inventory.