Inventory Management for Amazon Sellers with Automation

Automated Inventory Management for Amazon Sellers

  Touseef Riaz

Posted on: 18 Feb 2022


Automated Inventory Management for Amazon Sellers

Stock management entails ordering, tracking, and storing your products efficiently to meet the demands of your customers. Managing inventory is an integral component of any retail or eCommerce business, but it is especially critical for Amazon sellers, whose listings and rankings can suffer as a result of being out of stock.

Inventory management for amazon sellers includes order volumes, cash flow, and sales forecasting. They need to do this so that they can remain at the top of Amazon's search listings and increase sales. The purpose of writing this blog post is to tell new Amazon sellers what inventory management is all about. 


What is Amazon Inventory Management?

A trustworthy inventory management system is built into Amazon's online shopping platform, making it one of the top online retailers. Fulfillment by Amazon, or Amazon FBA, is the inventory management system used by Amazon. In this way, Amazon's sellers can arrange delivery of their products to the final destination.

There is no requirement to use Amazon's Fulfillment by Amazon service. That service is available across all the marketplaces that Amazon supports. Its primary functions consist of inventory management, package and shipping management, and last-mile delivery. It is highly recommended that you employ this system as it will relieve you of all worries concerning order fulfillment. Interestingly, Amazon allows third-party sellers and shippers to utilize this service. However, FBA is still the most reliable and convenient option. Amazon FBA offers prime shipping and a better search ranking compared to other fulfillment services.

How to Perform Inventory Management for Amazon Sellers?

To perform inventory management for amazon sellers it is necessary to register for Professional Selling before you can begin. You may then select the FBA option within your seller account. After selecting the FBA option, you may begin managing your inventory on Amazon. 

Listed below is a step-by-step guide that can assist you in setting up your Amazon FBA account:


  • Option to place inventory

You will find Inbound Settings in the Fulfillment by Amazon settings in the Amazon Seller Central dashboard. Select "Inventory Placement Service" under "Edit" and Item Placement Option. If you select this service, your inventory will be sent solely to one warehouse, so you won't have to send it to another. Choosing this option will allow you to save substantial time, money, and effort, as well as much needed saving time and money.


  • Create a listing for your product

Click "Add a product" under Manage Inventory on the Seller Central dashboard. 

  • Choose Amazon FBA as your product listing option

Select your Manage Inventory screen, select your listing and select Action from the drop-down menu. Change the fulfillment method to Fulfilled by Amazon. The selection of this option indicates that you can make use of Amazon FBA as a fulfillment method for your listing.

  • Make sure your inventory is ready for Amazon FBA

The FNSKU and country of origin must be labeled on every piece. You must also ensure that FBA carton labels are attached to each carton box. Visit Amazon FBA's website for more details about Amazon FBA's preparation guidelines.

Unlike some other fulfillment services, Amazon FBA offers so much more than that. By providing customer service, Amazon FBA maximizes customer satisfaction. Customers can track the progress of their orders due to the company's effective tracking system. Besides keeping good relationships with its customers, the company keeps a back office. The company's staff strives to monitor and respond to customer feedback constantly.


Keeping your inventory from running out

Having no stock on hand can impair your sales as well as the performance of your product listing. Fortunately, you can prevent running out of inventory by following these steps:

  • Understand your sales velocity daily

The average daily sales velocity determines how fast or slows your product sells. Taking note of how many stocks/orders your supplier has and how long it took for half those orders to be sold, you can calculate this. 

  • Knowing your lead time is important

Depending on how many units you're ordering from your supplier, the lead time will vary. As more units are ordered, the increased lead time will be. Additionally, shipping time has to be taken into consideration. You should also add buffer days to account for shipping delays caused by customs and couriers. The buffer days, manufacturing, and shipping can usually be covered within 30 days of the order being placed. 

  • Order the right number of units when it's time to reorder

You may already have started to compute the number of units that you should order at the end of your analysis after you've calculated your daily sales velocity and the lead time for each unit. 

  • Be aware that sales will fluctuate during the upcoming holiday season

Due to the holiday season, businesses can sell products and services during the fourth quarter. This is considered due to the increased demand during this period. You need to plan when ordering stock during this time as well as allow time for getting the stock on time. Although not ordering enough products may lead to customer dissatisfaction once products are sold out, over-ordering can result in storage and shipping costs that are unnecessary. Whenever you are thinking about committing to a product, make sure you do your research.


  • Consider the effects of special holidays on your supply

Holidays are an important consideration that is not always considered. Take note of any holidays that your supplier or manufacturer may be experiencing. Your supplier's working days and holidays may differ from yours if your supplier is from a foreign country. You should plan and investigate their holidays as well, as this may affect your lead time.


Tips for Improving Inventory Management for Amazon Sellers

With the simple 6 tips, you can manage inventory for Amazon sellers like a pro. 

  • Establish a strong relationship with your suppliers

To be a successful FBA seller, it is essential to investigate and establish reliable supplier relationships. Check credentials, credibility, and price when choosing the supplier, you intend to work with. Suppliers of quality products should strive to ensure that they deliver them consistently and within a reasonable time frame. 

Having found suppliers you can work with, ensure you treat them well, pay them on time, and communicate regularly to ensure everyone is on the same page. Scheduling supplier shipments in a steady flow will enable customers to meet their demands. Take consideration of too much inventory sitting in storage.


  • Manage Amazon inventory through a third-party system

Amazon Seller Central offers sellers powerful tools for managing their Amazon inventory for free. Many turns to third-party software solutions for sellers who wish to manage Amazon inventory and perform a wide array of other tasks.

Sellers who sell through multiple sales channels and platforms often choose this option since their inventory data syncs seamlessly between them. Automate your inventory management process by using the best Amazon inventory management software you can find. 

  • Use an Amazon order management software

You can manage your orders from Amazon on one dashboard by combining orders from different channels. All orders can be managed, and inventory can be synced across all sales channels, and more. Furthermore, they provide more comprehensive analytics and information that comes in handy in inventory management for amazon sellers.

  • Maintain a regular supply of popular items

Plan restocking schedules for each product you sell, as some items are likely to sell out faster than others. Rather than setting a date every month to order products you may not yet need, use data from your inventory to determine when it is the right time to restock items. 

Whenever your store displays an "out of stock" message, you have missed the opportunity to sell products. If a customer is discouraged from purchasing from you again because of this issue, your store may have a recurrence. They may also begin researching more consistent brands. Conversely, hold too much inventory in your warehouse, be it Amazon or eBay inventory management. Just make sure the quantity should not exceed the forecasting recommendation and you may incur excess storage fees if the products sit there for an extended period.

  • Get rid of the aging inventory

Profits can also be lost on overstocked items that don't sell. It costs both time and money to store the items that are not being resold, on top of losing resale profits. Run a promotion to move as much overstocked stuff as you can to prevent aging stock. 

Restock Inventory Tool in Seller Central is a free service provided by Amazon FBA. Offering a wider variety of same-day and next-day shipping options helps increase conversions and sales. Additionally, it can help minimize the risk of inventory stranding and protect your Seller's rank.

  • Lead times & forecasting are useful tools for planning inventory orders

When undergoing inventory management for amazon sellers, the ideal situation is being able to fill orders in between stock shipments. |Which should be achieved with the required inventory in stock. Unfortunately, this is not always feasible. We must remember that inventory management can face many challenges when it comes to real-life inventory management problems. Supplier schedules can change suddenly, unexpected raw material shortages, and weather can affect sales.

Stock buyers who are smart place orders with suppliers based on the "what ifs" they have in mind. You can use Amazon to make smarter decisions about inventory orders by knowing what these terms mean:

  • Lead times for inventory orders

When an order is placed, the lead time is how quickly the inventory will arrive. When you plan reorders based on lead times, you allow enough time for your current inventory to expire before placing an informed reorder.

  • Forecasting inventories

The practice of forecasting refers to the act of evaluating sales trends to determine to reorder quantities. When purchasing a particular product, you should also determine how much inventory you will require. This tool is another excellent way to forecast your needed inventory reorders based on Amazon sales.

However, when placing orders based on forecast numbers, you'll need to rely on your intuition. Your stock needs may fluctuate based on seasonality, holidays, and trends. If you are making your decision, you should take all of these variables into account, as well as the lead time.



In the long run, inventory management for Amazon sellers can have a huge impact on sellers' business, even though it is time-consuming. Additionally, you can also increase your sales and retain your customers by using proper Amazon inventory forecasting to improve your logistics and operations.

To effectively manage your Amazon inventory, you must understand the risks of running out of inventory and how you can prevent it. To manage Amazon inventory efficiently, you must control cash flow, use management tools, and place data-backed restock orders.