{"id":12948,"date":"2021-10-19T06:47:16","date_gmt":"2021-10-19T13:47:16","guid":{"rendered":"https:\/\/michaeljbrumm.com\/dcl-v3\/?p=12948"},"modified":"2024-01-03T08:10:41","modified_gmt":"2024-01-03T16:10:41","slug":"managing-amazon-fba-during-holidays","status":"publish","type":"post","link":"https:\/\/michaeljbrumm.com\/dcl-v3\/blog\/amazon-fulfillment\/managing-amazon-fba-during-holidays\/","title":{"rendered":"Tips on Managing an Amazon FBA Account During the Peak Season\u00a0\u00a0"},"content":{"rendered":"

The Challenges of FBA During High Volume Seasons<\/span><\/b>\u00a0<\/span><\/p>\n

The holidays are known for high order volume, specifically between late November and mid-December. Of course, volume surges can happen at any time of year, planned or not. Because Amazon is a marketplace with algorithms to serve customers new products, sometime sellers will see an uptick in order volume without putting significant effort into their product pages.\u00a0<\/span>\u00a0<\/span><\/p>\n

For Amazon sellers, order volume increases, planned or unplanned, are a great thing until you run out of inventory.\u00a0<\/span>\u00a0<\/span><\/p>\n

The Problem with Stockouts on Amazon\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

In any other DTC environment if your brand starts to pick up consumer interest there are ways to protect yourself against stockouts. If your order volume is increasing faster than you can fulfill or keep inventory in stock, you can always turn off marketing or\u00a0promotions. There are ways to balance out the supply and demand and pivot your strategy, so you\u00a0don\u2019t\u00a0lose customer interest when you\u00a0don’t\u00a0have enough inventory.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cWhat inevitably happens, either because of legitimate 3PL constraints, and or just working capital issues, sellers run out of inventory.\u00a0So\u00a0you have these products which have just started to take off, that then\u00a0all of a sudden, their shipping times become much, much longer. It\u2019s one of the biggest turn offs to customers.\u201d<\/span>\u00a0<\/span><\/p>\n

With an Amazon store, on the other hand the stakes of a stockout are much higher. There\u2019s a uniqueness to the Amazon ecosystem where, if you’re out of inventory you start to lose positioning on the platform. But the bigger issue is losing customers. If a customer finds a product with \u201cdelivery in three weeks, five weeks, six weeks,\u201d it’s not likely they\u2019re going to buy it, and it\u2019s less likely you\u2019re ever going to get that person back.<\/span>\u00a0<\/span><\/p>\n

Curious which marketplace is right for your brand? It might not be Amazon. Here\u00a0are\u00a0<\/span>top tips for selling on multiple marketplaces<\/span><\/a>\u00a0at once.\u00a0<\/span>\u00a0<\/span><\/p>\n

Challenges of Managing Inventory with Amazon FBA\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

When your order volume surges, sellers need to supply Amazon with enough inventory to be able to fulfill orders quickly (customer require 2-day or same-day shipping). What makes inventory planning challenging for FBA sellers is that Amazon tends to limit inventory during the holiday peak season.\u00a0<\/span>\u00a0<\/span><\/p>\n

An experienced seller will be good at replenishing their Amazon inventory without going over their max storage allotment. There are a few tactics to do this well; some sellers manage this themselves, but many use a reputable 3PL to coordinate shipping inventory to Amazon to mitigate this conundrum.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

In order to\u00a0plan your inventory accordingly\u00a0it\u2019s\u00a0important to understand the tradeoffs of overstock, deadstock, and stockouts.\u00a0<\/span>\u00a0<\/span><\/p>\n

Stockouts\u00a0<\/span><\/b>or exhausted inventory will negatively affect your customer retention.<\/span>\u00a0<\/span><\/i>As\u00a0stated above, a stockout on Amazon can lead to major repercussions: negative customer experience, bad reviews, losing positioning on the platform, and more.\u00a0<\/span>\u00a0<\/span><\/p>\n

Overstock and deadstock\u00a0<\/span><\/b>will negatively affect your storage fees and your relationship with Amazon. If you send too much inventory to the Amazon distribution center, they may turn your entire shipment away. This results in extra transportation costs, headaches, and the potential for stockouts if your inventory is expected to sell out.\u00a0<\/span>\u00a0<\/span><\/p>\n

No matter how you manage your inventory flow, during peak seasons you\u2019ll likely need to make some quick decisions\u2014it\u2019s inevitable to have some unplanned ebb and flow of products. Being informed and\u00a0planning ahead\u00a0for various scenarios is the best way to prepare. Customer satisfaction is important, but if pleasing the customer means cutting into your margins it might not be worth it. Even if your margins go down, you need to be smart about your decisions. Is it\u00a0really\u00a0<\/span>profitable\u00a0to keep that person or that sale? Do I have chances to sell them other products in the future? Should I forgo shipping all together? Can I find a way to get inventory into the into the port some other way?\u00a0<\/span>\u00a0<\/span><\/p>\n

If FBA isn\u2019t right for your brand, here are a few\u00a0<\/span>alternatives to Amazon FBA<\/span><\/a>\u00a0that may suit you much better.\u00a0<\/span>\u00a0<\/span><\/p>\n

Ways a 3PL can Help Manage Your Amazon FBA Inventory\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

Working with a 3PL with Amazon FBA experience will help ensure a smooth experience. Find the right 3PL who can help you manage your Amazon inventory. Ways to keep this relationship working for you include:\u00a0<\/span>\u00a0<\/span><\/p>\n