The Perpetual Cycle of Stale Amazon Inventory
- November 25, 2015 | Marcus DeHart
My family loves bananas, but getting a good banana in the peak of ripeness is tricky. We tend to buy large bunches so we all can enjoy them, but we buy them a bit on the green side so they last longer. Inevitably, we end up with a handful with black spots, which, to my daughters, means they’re already bad. As a penny-pinching dad, I usually eat the mushy ones, so they won’t go to waste. Inevitably one or two bananas are so far gone that even I won’t touch them (banana bread is another story!).
Hopefully, that’s not what your inventory at Amazon’s fulfillment centers feels like to you. If it is, then you know the heartache of deciding what to do with stale inventory. In "4 Ways FBA Sellers Can Avoid Amazon’s Long-Term Storage Fees,” I recommended options for managing stale inventory including adjusting prices, offering promotions, and advertising with Sponsored Products. In “Why and How To Keep Your Amazon Inventory Fresh” I suggested a tiered approach based on the age of your inventory. In this post I want to show you two features of the beta Inventory Dashboard that can help you stay on top of your aging inventory to avoid letting it get stale.
Manage Excess Inventory
The new Inventory Dashboard in Seller Central has a card called Manage Excess Inventory that gives you a snapshot of excess products sitting on the shelf. It provides a breakdown of total units, excess units, units sold, and days of supply. By default, if you have anything with more than 90 days of supply in the fulfillment centers, it will show up as excess inventory. The dashboard only shows you the top three offenders, but you can click the View All button to switch to the Manage Excess Inventory tab and review all of your excess inventory.
The cool thing about this list is that you can take action on these listings right here. If you don’t like 90 days as the default days of supply, you can increase or decrease the number of days to fit your business model. The “edit listing” drop-down menu on the right gives you options for advertising, improving keywords, lowering your price, and creating a removal order.
If you’re using the Amazon Sponsored Products, the “Advertise listing” option will prompt you to select an existing campaign to add the product to or create a new campaign. You can sort these products by Estimate Excess or Days of Supply, making it easier to prioritize which products you want to focus on based on your business strategy.
FBA Inventory Age
You can gain some additional insight into your aging inventory through the FBA Inventory Age tab of the Inventory Planning Dashboard. This view offers two filter options that can help you choose a strategy for each product. The Low Traffic filter shows you products that shoppers are having a hard time finding. These are prime candidates for advertising with Sponsored Products. If you apply this filter you can add them to an advertising campaign one by one or in bulk using the action drop-down menu.
When applied, the Low Conversion filter shows you products that shoppers are finding but choosing not to buy. You can select all of them and match the lowest price from the action drop-down menu, or you can adjust pricing one at a time.
Develop a Strategy
Like bananas, no one wants to get stuck with stale inventory. For products with high margins, you might be able to tolerate letting your inventory sit around longer. They will also be better candidates for price reductions or advertising. For low-cost products, it might make more sense to have Amazon return them to you or dispose of them.
These are also key factors to consider before you send your inventory to Amazon. Healthy inventory will sell through on a regular cycle. Figure out the cycle for each of your products and pace your shipments so you don't end up with brown, mushy bananas.