How to Optimize Inventory Levels: Avoid Stockouts and Overstock

Deciding how much inventory to purchase is a constant challenge for Amazon sellers. A deal can look good one minute and tank the next leaving you overstocked. A product can take off suddenly leaving you scrambling to restock. And seasonal stock which is hot for just a moment must be timed perfectly. (Let’s not talk short shelf lives, product defects or compliance notifications for now )

Many of us despair over missed sales due to stockouts, but excess stock which ties up cash and incurs storage fees can be equally damaging to profits.

It’s a delicate balance ☻ but here are 5 tips to help avoid both stockouts and overstock.

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📦 MASTER KEEPA : And use apps like Buybotpro to check historical sales data, market trends, and seasonality patterns to forecast demand accurately.also provide this data.

📦 SET PAR LEVELS & REORDER POINTS: Determine optimal par levels (minimum stock quantity) and reorder points (stock level at which you initiate a new order) for each product.

📦 MONITOR INVENTORY LEVELS: And use apps like Seller Toolkit to implement a robust inventory management system that allows you to track stock levels in real-time. Regularly monitor your inventory to identify slow-moving items or products approaching their expiration dates.

📦 Establish SUPPLIER RELATIONSHIPS: Build strong relationships with your suppliers and even retail store managers to establish a product pipeline, negotiate flexible ordering terms and lead times. Having a backup suppliers is also key.

📦 Offer PROMOTIONS & INCENTIVES: Overstocked inventory is often a byproduct of low visibility, i.e. your product listing is on page 7 of Amazon’s search results. If your product has a visibility problem, you could discount as much as 90% or more and see little or no increase in sales velocity. Create a voucher or outlet sale or “Prime Day” discount for more visibility.

Be assured that next to no-one has a perfect inventory management system. Avoiding frequent stockouts or overstocks is the goal, but unforeseen supply chain disruptions and occasional inventory imbalances are just part of doing business.

And know that even if you invest in an inventory management tool that can optimise inventory levels, it cannot become a substitute for mitigation plans.

Best wishes!