4/3/2024 0 Comments Inventory turns amazon![]() If you are a new seller and have a turns number that is lower than 4, it’s totally okay! You really need up to 12 months of sales plus a peak selling season (like Q4) in your sales numbers before being able to reach 4+ in inventory turns. Goal inventory turnover can vary by business and selling platform, but generally to maintain inventory profitability, you’ll want to set a goal of about 4 turns for each 12-month period. Turns is a way to look at how well your inventory is moving as well as a way to measure profitability - the higher the number, the more times you are turning over your inventory via sales and the more profitable your business is from a cash flow perspective. The “turns” number that is shown on the Amazon Inventory Planning Dashboard is calculated by taking the FBA sales over the last 12-month period and dividing by current FBA inventory level. ![]() Amazon defines turns as “the number of times your FBA inventory will turn annually based on your current inventory and sales rate”. How to Keep Amazon FBA Inventory In-Stock SET A GOAL FOR Your Inventory “Turns”Īs a merchandise planner, one of the first KPI (key performance indicator) I would look for when reviewing inventory levels would be turns, also known as inventory turnover. Otherwise, you risk FBA inventory storage limits, increased or excess storage costs, and other reduced FBA selling privileges on your Amazon Seller Central Account. ![]() More importantly, your Inventory Planning Dashboard also shows sellers exactly how Amazon tracks inventory management health, and it’s the seller’s responsibility to make sure inventory metrics are being maintained according to Amazon’s expectations. It’s also a great place to review types of actions to take on inventory that is just not selling well to increase it’s sales momentum (and in worst case scenarios, a good place to create markdowns in order to liquidate inventory you no longer want to sell through Amazon FBA). This robust tool is helpful in deciding when to send more inventory (and what ASINs to send). The first step is to bookmark and review (weekly, if not daily) your Inventory Planning Dashboard in Seller Central. Know Your Amazon FBA Inventory Levels Seller Central’s Inventory Planning Dashboard So how can you best balance and manage your FBA Inventory levels to stay in-stock, but not have too much stock? Why? Because it can take time and money to get traffic to your product pages on Amazon through SEO optimization and PPC Advertising, so intentionally selling out a product (one-and-done) might not pay off on the platform after all costs and fees are considered. And while having a "limited inventory" business model might be a great strategy for driving demand and sales for your own website, Amazon isn't necessarily the best place for it. Unless your strategy is to sell out, this is to be avoided at all costs. Here is the bottom line: Having too much inventory ties your available cash up in physical product that is just sitting on a shelf somewhere - and in the world of Amazon FBA this also means your paying more in storage fees (and potentially excess storage fees if inventory has been sitting for more than 365 days).Īnd, not having enough inventory means that your best selling items are probably selling out over and over again, leading to missed sales, disappointed customers, and a decrease in Amazon best sellers rank (BSR). I also know that proper inventory management is a key component to having a sustainable and profitable Amazon Selling business (really, for any inventory-based business but we're talking Amazon over here.) ![]() Inventory planning is my JAM and I could talk about it for days. Why? I was a buyer and merchandise planner for close to a decade, for both small and large businesses, selling through multiple channels (including on Amazon). ![]() I LOVE when I get inventory management questions from clients. Keeping Best Sellers In-Stock and Minimizing Slow Movers is Key ![]()
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