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Combatting Inventory Challenges for the 2021 Holidays

Learn how retailers, sellers, and brands can combat inventory and supply chain challenges this holiday season. By Rachel Clepper November 18, 2021
Combatting inventory challenges for the 2021 holidays

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Supply chain pressures and related cost increases continue to impact the e-commerce industry, and there isn’t enough time or supply to order or get additional inventory into Amazon warehouses. Instead, you should use this time to focus on strategies you can use to stretch your limited inventory.

We’ve seen a variety of solutions to solve for the supply-chain crisis, including companies like AEO buying up a digital fulfillment operator to ensure control over their supply. The investment and time spent show the importance that all brands, sellers, and retailers see in both the control and consistency of their products. 

Take back control this holiday season with repricing and optimization strategies to set your items at a higher, more profitable price while stretching your limited inventory. If you are worried about your supply for the upcoming holiday rush, we’ve got useful tips for you that don’t include ordering more stock. 

3 Tips to Combat Holiday Inventory and Supply Chain Challenges Close to the Holidays 

There are many different ways you can help to keep your business successful during this supply chain crisis. This section will walk you through three different methods and actions you can take with Feedvisor to solve for the impacts of the supply chain on e-marketplaces by stretching your limited inventory.

Tip 1: Create a Replenishment Report to Adjust Strategy

Replenishment is an integral part of the success of a brand, seller, or retailer. A replenishment report, sometimes called demand forecasting, is a process in which you strategically fill orders rather than blindly ordering more supply whenever you are running low. But with the ever-present inventory challenges and changing needs of consumers, regularly anticipating the need and timing for product replenishment is not easy.

To create a replenishment report, you will need to look at your current fulfilled inventory, reserved inventory (that is what’s in a fulfillment center), and inbound inventory to FBA. From there, you can look at your sales velocity and estimate how many days of inventory are on hand. 

Use your estimate above to adjust your advertising strategy for your products with low inventory. If your inventory is very low, you can decrease advertisements or take them out altogether to keep your stock for longer until you have replenished your inventory.

Further Reading: The Ultimate Guide to Amazon Holiday Promotions Strategy in 2021

Tip 2: Invest in Tools to Support Inventory Insights

You want your actions to prevent supply issues from impacting your business rather than reacting to them. Although it is not always possible to prepare for or avoid supply issues, there are tools and strategies you can use to set your business up for success.

By investing in inventory management, repricer, or holistic analytics platform, you will get one step closer to automating your inventory and pricing processes and get a better look at patterns in e-marketplaces to create a better strategy. 

When you pair one or all of those tools with a strategic account manager, you will get support running reports to help develop a target velocity product strategy. You can use a target velocity repricing strategy to ensure your stock lasts until your next shipment when you have lower inventory. 

A target velocity repricing method focuses on adjusting price points to achieve a user-defined sales velocity target (units sold per day). This price point should change day over day to reach the velocity target. By creating a more predictable sales velocity, this method allows for more accurate purchasing decisions and replenishment forecasting. 

Even if you don’t invest in these tools or work with a strategic account manager, be sure to set some type of alerts for low inventory levels so that you don’t have to be reactive but instead preventative when it comes to inventory insights.

Looking for a few examples of tools to use? Although Feedvisor is not an inventory management system, it does give insights into inventory levels to help you mitigate the impact of supply chain and inventory challenges. You can pair these insights with our repricing and advertising solutions to help you sell products with your specific goals in mind. You can learn more about how Feedvisor can help you this holiday season with a free 60-day trial.

Tip 3: Use a Liquidation Repricing Method

There are a few different instances in which you would want to liquidate your stock. One of the main reasons is that holding non-selling stock is expensive, especially with ever-increasing storage fees. The holidays are a great time to focus your energy on getting rid of low-performing and high-stock items to focus your efforts, and storage fees, on the items that make you the most money. Try using a combination of liquidation and repricing to get rid of low-performing or high-stock products.

Let’s walk through the steps to put this method into action. First, you need to identify your products that are low-performing and high-stock. If you don’t have a holistic dashboard like Feedvisor offers, you can create something similar in Excel by cross-referencing these two lists. Once you get your list of low-performing and high-in-stock products, you can set a target out-of-stock day and optimize your price point. This will help to speed up sales. 

Optimizing your price point is not always intuitive, but you can invest in an algorithmic repricer to automatically create the optimal price considering factors like fulfillment, inventory, and more. If you are doing this without a repricer, be sure to calculate a range of prices that take into account optimizing your revenue and velocity of sales; check in on competitors to best do this. This is not a set it and forget it method. Pricing changes depending on seasonality and sometimes even days of the week. You must consistently go back to check in on your pricing strategy. 

Further Reading: 5 Questions to Ask Before Getting an Amazon Repricer

If you don’t want to liquidate your stock but want to save on storage for your products, you can also use a similar method of optimized price point to slow sales but not sell out your stock completely. 

About the Author

Rachel Clepper is a content marketing writer for Feedvisor, where she contributes to the company’s content marketing initiatives. Before joining Feedvisor, she was a senior content marketing writer for a nonprofit software company.

Final Thoughts

A key part of succeeding in a variety of inventory challenges is to estimate your holiday demand. 

To best calculate your holiday demand, it’s essential to look at your data along with marketplace trends. We recently released the new 2021 Amazon Consumer Behavior Report that calls out trends in Amazon and other e-marketplaces. Download the report and find out how trends may be impacting your inventory this holiday season.

 

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