Inventory Stock Management Tips To Reduce Overselling On Amazon 2019
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You might have heard or have got a first-hand experience of going out of stock prior to your calculations. Products ‘out of stock’ negatively impact sales and create a bad sales history and takes a lot of time re-establishing its sales reputation on Amazon. Here are some Inventory Stock Management tips to reduce overselling cases on Amazon.
A quick run-through the topics covered in the blog-
What is Overselling (out of stock)
Impacts of Overselling
Reasons for Overselling
Best Inventory stock management strategies
How can CedCommerce Help?
What is Overselling?
Many online businesses face the tragic situations of overselling and bear the negative impact as the repercussions. Overselling is a tragic situation when your products are demanded in the market but you cannot supply them because your inventory does not contain that product anymore.
Despite the product’s unavailability in seller’s inventory, the product displays on the result page and customers place demands but only to know that the product order has been cancelled! Such situations are not only undesirable and furious for customers but also for many potential sellers.
Impacts Of Overselling
You lose your sale – The very primary impact is that you have lost a customer. Probably not just one but many who have placed orders considering your customer reviews and good sales history.
Losing customers also means losing their trust and drawing brickbats.
Strengthening Your Competitors – Your lost prospective customers are just upset but not helpless to wait for you. The best thing they can do is to look at your competitors who are selling similar or even the same products and make a purchase from them.
Your competitors get a chance to make sales and improve their sales history.
Create a weak sales history – The impact of your insufficient inventory lower downs your product’s ranking from Amazon’s search result page. Once you come back and relist your product, it takes time on Amazon to reconsider your product.
The negative sales history (due to order cancellation or negative customers’ review) makes it difficult for the product to compete in the mainstream.
For quite a long time, as a seller you will have to struggle to hit the top search result list again.
Decreased productivity and efficiency: Poor stock management ruins your business plans and scheduled business activities , significantly raising the rate of inefficiency and poor productivity.
The other inefficiencies caused by insufficient inventory are –
Lack of sufficient quantity
Inefficient order fulfillment
Inaccurate inventory calculations
Reasons for Overselling
Inaccurate Inventory calculations- Why will you ever go out of stock, if you actually know the current status of your inventory? You will certainly draft a robust plan to make sure that your products are shipped to you in time. So, if you have ever landed up in a situation like this or curious about how one can be out of stock then this is one of the primary reasons why you have oversold your products.
Inaccurate inventory calculations can worsen the entire business plans and lead to bankruptcy in extreme cases.
Methods of Product Sourcing – The method that you have chosen for product sourcing are the main reasons why you don’t get you inventory on time. Your manufacturer,wholesaler or Drop Shipping company etc, cannot be under your control all the time.
The only measure you can take is to place an order to them days before your actual stock out.
Manual Inventory Management – Manual inventory calculations are mistake prone. It takes a lot of time to manually compile data on a daily basis.
Real time inventory update and synchronization is difficult to be handled manually, especially while dealing with large inventory.
Less Control Over Inventory – Many Amazon sellers sell through Amazon FBA where picking, packing and shipping is done by Amazon. Most of the sellers also store their stock in Amazon’s warehouse.
This sometimes pose problems for sellers to calculate the actual inventory. Out of sight, out of mind issue arises when not directly managing the inventory and making calculations.
Variety of Products – Sometimes selling variety of products create a management problem. Updating the stock on e-store and on Amazon is quite a cumbersome and hectic process. As sellers, you have to manage and keep a keen eye on the orders and update the stock on Amazon so that the exact inventory is shown and users order the product actually in the stock.
These are the probable reasons why overselling can happen. There might be even more reasons that can lead you in such undesirable condition, to mention –
- Discrepancy between recorded and actual stock
- Sudden demand hike
- Lack of updating across all marketplace channels
Whatever reason it might be, but the fact of the matter remains the same that you want a way out.
Let’s now discuss about the ways through which you can keep your inventory updated and prevent yourself from overselling condition.
Best Inventory Stock Management Strategies
Accurate Forecasting – Forecasting is very essential to order the right products at the right time and in the right quantity.
Such high demanded products in good quantity do not only generate good amount but also keep the number of customers satisfied.
Based on future marketing plans or promotional plans you must calculate the demand hike that you can get. Keeping in mind all these future changes, you can finalize your stock amount.
Automate your inventory – Automating the inventory is the best thing. Connecting your e-store with Amazon using integrators comes with advanced features of updated inventory management, order and shipment management and safety stock calculations.
Allow well-coded and less error prone mechanism to update and calculate your inventory. Your accurate inventory management, safety stock calculation and cross channel update will be done automatically without any mistake.
Optimizing Inventory Analytics Tools – Inventory analytics tool gives the entire data of your inventory in a systematic form and bifurcates between what sells in abundance and what sells too low.
This gives you an idea of what products to stress on and others that needs less attention. Based on the demand and supply of the product on Amazon, you can fix your inventory budget and order everything in an accurate amount.
Analytics tools allow you to avoid overstock and under stock condition.
Remember your ABCs – Practice tighter control over higher-value items by grouping inventory items into A, B, and C categories. This will enable you to strategize specifically for each group.
Never compromise with quality – Even if you have sufficient quantity, but if they are low in quality, your customers will return your products and you know the impacts thereafter.
No matter of the quantity, always focus on the quality. What you sell should be accepted by your customers.
Switch to drop shipping – There is also a way out! If you feel handling inventory way difficult for you then you can easily switch to drop shipping, which is one of the best ways of product sourcing and tie up with drop shipping company, wholesaler, manufacturer.
The drop shipping company takes care of your inventory, storage and shipping of the products. There are many advantages and disadvantages of drop shipping as well but the fact of the matter is that you will not have to worry about your inventory.
How Can CedCommerce Help?
CedCommerce is a global leading tech-solution company that gives integrating services across multiple frameworks and more than 40+ marketplaces including some of eCommerce giants like Amazon, eBay, Etsy, Walmart etc.
CedCommerce provides best tech-solutions with special feature pertaining to Inventory Management. Following are the important feature that you can enjoy while selling Amazon and other marketplaces –
- Real-time Inventory Synchronization between Framework e-store and Amazon
- Real Total Inventory Update
- Inventory Notification as per the stock available of the product
- Automatic Inventory calculation to allow you to calculate safety stock beforehand.
Overselling is a huge problem and is majorly a result of lack of inventory management and improper synchronization across e-store and multiple selling channels. It’s important to always have the upperhand in product category. Quality and quantity of the product at any given point of time determines our future in eCommerce on competitive marketplaces like Amazon.
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