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Logistics of Stocking and Shipping for FBA Users

Seller central users will be familiar with the choice between merchant and Amazon fulfilled shipping. The choice is made for Fulfilled By Amazon (FBA) users by the need to keep up with product turnover, keep manageable stock volumes, and the appeal of having Amazon handle the workforce needs that come with shipping and warehousing. 

As an FBA user having Amazon handling things for you, one of the more tricky aspects is knowing when and how to keep your items in stock. Before and after worrying about paid campaigns and advertising or optimising your listings for sale, being concerned about your inventory management is the most important aspect of your Amazon sales performance.

You always want to stay on top of having a healthy inventory to keep your sales performance optimised. 

Why You Want to Stay On Top of Inventory Management

You may think that stocking whenever you’re ready or keeping lots of stock in Amazon’s warehouses is fine, but both can be equally harmful to your bottom line. Aside from no stock meaning no sales, poor stock levels will continue to hurt your campaign performance and organic rankings long after you’ve restocked, particularly if you continually understock or overstock late.

Here are some of the risks you run with a poorly managed inventory:

  1. Low inventory – Low to no stock will affect your buy box %, making it an expensive loss in your attempts to win it back. It also stops your campaigns from being effective; they either can’t run or waste budget on products out of stock and on listings that have lost the buy box, may need to outspend competitors to win it back. Worse yet, your organic rankings will take a hit, undoing all you’ve done to rank up your products, which often continues to be felt long after restocking.
  2. Excess inventory – On the opposite side of the spectrum, it’s equally not in your interest to overstock. It’s expensive, increasing your FBA fees by sending in more product than needed, harming your account health. According to Amazon, you don’t need more than 90 days worth of stock for any product.
  3. Stranded / Deadstock – You may be on top for a while, moving lots of product, but if the winds shift, you may end up with stock you can’t move on Amazon that could have sold elsewhere. You end up with stranded inventory – essentially cash that cannot be moved without doubling shipping expenses to get the product back and lost sales costing you in storage space.
  4. Spoilage – This is a prime concern for those selling products that expire. Your stock can go to waste if it cannot sell within the sell-by period because you overestimated your potential sales.
  5. Storage fees – When planning your stocking strategy, treat each product individually.  Keeping all products in-stock is expensive and can be limiting. It makes more sense to maintain a higher stock level of quickly moving products, even if they aren’t your big-ticket items.

How to Know When to Restock

For those using FBA, Amazon provides Inventory Planning that takes on the hassle of figuring out which products need restocking, how many units to send, and when to ship by. Amazon can calculate a recommended replenishment quantity by working out your average units sold by ASIN over 30 days and comparing that to your remaining stock levels. They also provide a recommended dispatch date, so you’re never left without stock. Their estimation-based optimisation model even factors in costs to you. Still, it is limited by your previous behaviour and can’t factor in your more comprehensive business strategies or the external influences to your business.

Taking on an Amazon Management Agency to optimise the process can assist you in advanced planning. At RT7Digital, we have our own modified model for working out how our customers should do restocking, helping them stay ahead of the curve no matter their individual needs.

Steps to Managing Your FBA Shipping

Amazon has introduced the updated Send to Amazon system to streamline the shipping process with simplified workflow steps that save labeling and packaging details. Once a shipping template for your SKU has been created, Amazon retains it for all future orders. Follow this step-by-step guide to ship your FBA inventory to an Amazon Fulfilment Centre. 

  1. Select the SKUs you want to ship.
  2. Create a shipping template: Select a product, and from the Packing Details column dropdown, and select “individual units” or “create new case pack template”. Fill out the form; choose the type of prep needed based on your product category. You will need to fill in the number of units per pox, the dimensions, and the final weight for case packs. You can also give this template a name in case of multiple shipping templates.
  3. Complete all actions required: Ensure that your packaging is prepped as necessary, bearing any packaging labels and warnings needed. Also, provide Amazon with any needed additional information, eg: Manufacturing lot code.
  4. Select your quantity to send: Enter the number of boxes being sent or the number of units in the final column. Amazon will automatically work out the other number based on your template. When you’re prepared, click the new “ready to pack” button that appears.
  5. Confirm shipping: You can check at the bottom of Step 1 for how many SKUs and units have been made ready to send once all your products have been prepped. Amazon provides an estimate for the total prep and labeling fees if any have been incurred by selecting not to do the packing yourself. If all looks right to you, confirm and continue to move on to step 2.
  6. Confirm shipping: Step 2 confirms your shipping details such as the shipping address, no. of boxes, SKUs, units, and shipping method.
  7. Print labels: At step 3, you need to print your shipping labels provided by Amazon and attach them to your boxes as required by Amazon. You can choose to have one SKU per box or mixed SKUs.
  8. Contact the courier: Choose a method to send your shipment to the Fulfillment Centre. You can follow Step 4 to select from an Amazon partnered courier service to pick up your shipment or move away from Amazon at this point and contact a courier yourself. Confirm your freight-ready date/scheduled pick-up and contact details. For unaffiliated couriers, be sure to “mark all as shipped” once your inventory is on its way.

For personalised advice or hands-on inventory management for your business contract the RT7DIgital team. We’ll be happy to get in touch with you to look at your individual needs and grow your Amazon performance through perfectly managed stock levels and shipping.

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