Combatting Inventory Challenges for the 2021 Holidays

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. 

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 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.