You need to understand that managing your inventory properly is crucial for success in the world’s largest online marketplace. Amazon has over 2.5 million active sellers, and each one is competing for the attention of millions of customers.
To stand out from the crowd, you need to make sure you have enough stock to meet demand while also avoiding overstocking. This is where proper inventory management comes into play.
If you don’t manage your inventory properly, you risk losing sales due to stockouts or overselling. This can damage your reputation as a seller and result in negative feedback from customers. On the other hand, overstocking can tie up your cash flow and lead to unnecessary storage fees.
By managing your inventory on Amazon, you can ensure that you have the right amount of stock at the right time, which can help increase your sales and profitability.
And by understanding the different types of inventory on Amazon, you can make an informed decision on the best option to manage your inventory, streamline your operations, and maximize your profits.
So, let’s dive in and explore the various types of inventory management options on Amazon.
Overview of the Different Types of Inventory on Amazon
So, you think you’re a savvy seller? Think again. We’re about to show you the ins and outs of the different stock options available on the world’s largest online marketplace.
First up is FBA inventory or Fulfillment by Amazon. This option allows you to store your products in Amazon’s warehouse, and the company takes care of picking, packing, and shipping your orders. With FBA, you can also take advantage of Amazon Prime, which can boost your sales.
The second type of inventory on Amazon is merchant fulfilled inventory. This option means you are responsible for storing and shipping your products to customers. With this option, you have complete control over your inventory and can sell items that are not eligible for FBA. However, managing your inventory on Amazon can be a bit more challenging with this option.
The third type of inventory is Amazon’s Subscribe & Save program. This option allows customers to subscribe to receive a product on a regular basis, such as every month. As a seller, you can list your products in this program and offer discounts to customers who subscribe. This is a great way to boost sales and ensure a steady stream of revenue.
Lastly, there’s the Amazon Renewed program, which is for refurbished or pre-owned products. This option allows you to sell products that have been tested and certified to work like new. If you sell electronics, this could be a great option for you.
Fulfilled by Amazon (FBA)
If you’re looking for an efficient way to handle your inventory and shipping on Amazon, Fulfilled by Amazon (FBA) may be the solution for you. FBA allows you to store your products in Amazon’s warehouses, and Amazon takes care of the shipping and customer service.
This can save you time and effort, but it’s important to weigh the pros and cons before making a decision.
Definition and Benefits
FBA stands for ‘Fulfillment by Amazon,’ which means you send your inventory to Amazon’s warehouses, and they take care of the rest. Your products become part of the FBA inventory, which means they are eligible for Amazon Prime, free shipping, and other benefits that come with using Amazon Fulfillment Services.
Fulfillment by Amazon also offers several other advantages.
For one, you can take advantage of Amazon’s world-class logistics network, which is known for its speed and reliability.
Moreover, FBA inventory can improve your customer service and satisfaction, as Amazon takes care of any issues that may arise with shipping or returns.
Finally, FBA inventory can help you save on storage costs, as Amazon offers competitive rates for storage and fulfillment services.
How FBA Works?
Once your inventory is received at an Amazon warehouse, the FBA team takes over the entire fulfillment process. They pick, pack, and ship your products to customers on your behalf, and also handle any customer service inquiries related to the order.
You don’t have to worry about anything, as Amazon takes care of everything from storing your products to handling returns. This gives you more time to focus on growing your business and developing new products, while Amazon takes care of the logistics.
Pros and Cons
FBA inventory management is a great way for sellers to outsource their order fulfillment to Amazon, allowing them to save time and focus on other aspects of their business
One of the main benefits of using FBA is that it allows sellers to have access to Amazon’s massive customer base. This means that your products will be available for Amazon Prime members, who tend to spend more money and make more frequent purchases.
Additionally, FBA offers sellers the ability to participate in the Seller Fulfilled Prime program, which gives them the ability to offer their products with the Prime badge, even if they are fulfilling the orders themselves.
However, there are also some drawbacks to using FBA. One of the main concerns for sellers is the cost of using FBA, as Amazon charges fees for storage, fulfillment, and shipping.
Additionally, sellers may have less control over their inventory, as Amazon may limit the amount of stock that can be stored in their warehouses. This can be especially problematic for sellers with products that have a short shelf life or are seasonal in nature.
Furthermore, FBA may not be the best option for sellers who prefer to have more direct control over their shipping and handling processes. Ultimately, sellers must weigh the pros and cons of using FBA to determine if it’s the right fit for their business needs.
Seller Fulfilled Prime (SFP)
This program allows you to offer the same benefits as Amazon Prime, without having to use Amazon’s fulfillment centers.
You can save money and have more control over your inventory, but there are also some drawbacks to consider. Let’s dive in and learn more about SFP!
How SFP Works?
As an Amazon FBA seller, you may have heard of SFP, but may not know how it differs from traditional FBA inventory. SFP allows sellers to offer Prime-eligible products without having to store them in Amazon’s warehouses.
Instead, the seller stores the inventory in their own warehouse or a third-party fulfillment center and handles the shipping and handling themselves. This allows sellers to have more control over their inventory and potentially save on storage fees.
However, SFP does require sellers to meet strict performance metrics and have a proven track record of fulfilling orders on time and with high customer satisfaction. If you’re an experienced Amazon FBA seller looking to expand your reach, SFP may be a great option for you.
Pros and Cons
Let’s weigh the pros and cons of using Seller Fulfilled Prime (SFP) to determine if it’s the right fit for your business, but did you know that SFP sellers have reported a 30% increase in sales compared to non-Prime sellers?
One of the biggest pros of using SFP is that you get to keep control of your inventory.
Unlike FBA inventory, where Amazon takes charge of your products and stores them in their warehouses, SFP allows you to store and manage your products yourself. This gives you more flexibility in terms of pricing, shipping, and handling of your products.
Additionally, you can save on storage fees and shipping costs since you have full control over your inventory.
However, there are also some cons to using SFP.
One of the biggest drawbacks is the added responsibility of fulfilling orders.
With FBA, Amazon takes care of everything from picking to packing and shipping. But with SFP, you are solely responsible for fulfilling orders within the promised two-day delivery window. This can be challenging for businesses with limited resources and may result in delayed delivery or negative feedback from customers.
Additionally, SFP sellers may have to invest in additional resources such as shipping supplies, staff, and warehouse space to ensure that they can meet the demands of Prime customers.
Merchant Fulfilled Network
If you’re considering using the Merchant Fulfilled Network (MFN) on Amazon, it’s important to know what it is and what to keep in mind.
Essentially, MFN allows you to fulfill orders yourself, rather than using Amazon’s fulfillment centers. This can be a good option for businesses that want more control over their inventory and shipping processes, but it also comes with some drawbacks.
Such drawbacks include potential shipping delays and a lack of Prime eligibility.
Definition and Considerations
MFN inventory allows businesses to store and ship their products themselves, which can be a good option for those who prefer to have more control over the process.
However, this option requires businesses to have their own storage space and shipping materials, and they must also handle all customer service inquiries and returns themselves.
How MFN works?
The MFN option is like driving a car without a GPS, it requires more effort and attention but allows businesses to have complete control over their inventory and shipping process. With MFN, or Merchant Fulfillment Network, businesses handle their own shipping and customer service instead of relying on Amazon’s FBA inventory system.
Here are four key things to consider if you’re thinking of using MFN:
- You’ll need to have your own warehouse or storage space to keep your inventory, which can be costly and time-consuming to set up.
- Shipping times and costs may be higher than with FBA, since you’ll need to handle everything yourself.
- You’ll need to handle customer service inquiries and returns, which can be challenging for some businesses.
- MFN can be a good option for businesses that want complete control over their inventory and shipping process, or for those that sell products that aren’t eligible for FBA Amazon, such as perishable items or oversized products.
Pros and Cons
One of the biggest advantages of MFN is that you have more control over your inventory and shipping processes. You can set your own prices and shipping rates, and you don’t have to worry about Amazon’s fees eating into your profits.
Additionally, you can customize your packaging and branding to create a more personalized experience for your customers.
However, there are also some downsides to using MFN
One major concern is the potential for shipping delays or lost packages, which can lead to negative feedback from customers and damage to your seller reputation.
You also have to be prepared to handle all customer service inquiries and issues related to your orders, which can be time-consuming and challenging if you have a large volume of sales.
Ultimately, whether or not MFN is the right choice for your business depends on your specific needs and goals, as well as your ability to manage the logistics of fulfilling orders on your own.
Amazon’s Subscribe & Save
Amazon’s Subscribe & Save is a program offered by Amazon that allows customers to subscribe to regular deliveries of eligible products. It is designed to provide convenience, savings, and a hassle-free shopping experience for frequently purchased items.
Here are the key benefits of Amazon’s Subscribe & Save:
· Automatic Deliveries
With Subscribe & Save, you can set up regular delivery intervals for your chosen products. You select the frequency, such as monthly, bi-monthly, or quarterly, and Amazon will automatically ship the items to you on the specified schedule. This eliminates the need to manually reorder products each time you run out.
· Cost Savings
Subscribe & Save offers discounted prices on eligible products. Subscribers can benefit from savings ranging from 5% to 15% off the regular price, depending on the number of products subscribed to and the total number of subscriptions in a given month.
By subscribing to products you frequently use, you can save time and effort spent on reordering them individually. Once you set up your subscriptions, you can manage and modify them easily through your Amazon account.
· Flexible Subscription Management
Amazon provides subscribers with the flexibility to make changes to their subscriptions at any time. You can adjust the delivery schedule, skip an upcoming shipment, add or remove items from your subscription, and even cancel it altogether. The management options are easily accessible on the Amazon website or mobile app.
· Wide Product Selection
Amazon offers a vast selection of eligible products for Subscribe & Save. This includes items from various categories like household essentials, groceries, personal care products, baby care items, pet supplies, and more. You can choose from thousands of products to create a subscription that suits your needs.
· Free Shipping
Subscribe & Save orders are eligible for free shipping, provided you meet Amazon’s minimum order requirements. This can help you save on shipping costs, especially if you frequently purchase smaller items.
It’s worth noting that while Subscribe & Save offers savings and convenience for many products, not all items on Amazon are eligible for the program. However, you can easily identify eligible items by looking for the “Subscribe & Save” option on the product page.
Amazon Renewed is a program by Amazon that offers refurbished, pre-owned, and open-box products from various categories, including electronics, home appliances, smartphones, laptops, and more. These products are thoroughly tested, inspected, and certified by qualified suppliers to ensure they meet Amazon’s high-quality standards.
Here are what sellers can benefit from Amazon Renewed:
· Quality Assurance
Amazon Renewed products undergo a rigorous refurbishment process to ensure they are in proper working condition. They are inspected, tested, and repaired (if necessary) by qualified suppliers. This helps to ensure that the products function like new and meet the customer’s expectations.
· Great Value
Amazon Renewed offers customers the opportunity to purchase products at a discounted price compared to their brand-new counterparts. This can result in significant savings while still getting a high-quality product. The price difference is primarily because Renewed products are pre-owned or refurbished.
· Warranty and Return Policy
Renewed products sold on Amazon typically come with a minimum 90-day warranty provided by the supplier or a 1-year warranty offered by Amazon. This gives customers peace of mind knowing that they can have the product repaired or replaced if any issues arise. Additionally, Amazon has a reliable return policy for Renewed products, allowing customers to return them within a specified time frame if they are not satisfied.
· Sustainability and Environmental Impact
By purchasing Renewed products, customers contribute to reducing electronic waste and the environmental impact of manufacturing new products. Extending the lifespan of electronics through refurbishment helps to minimize the resources required for new production.
· Wide Product Selection
Amazon Renewed offers a broad range of products from various brands and categories. Whether you’re looking for a smartphone, a laptop, a camera, or other electronics, you can find a wide selection of Renewed options to choose from.
· Trust and Customer Reviews
Amazon Renewed products benefit from the same customer review system as new products on Amazon. Customers can review and rate their purchases, providing valuable feedback for other potential buyers. This helps build trust and provides insights into the quality and performance of Renewed products.
While Amazon Renewed ensures the quality of the products, they may still show some signs of previous use, such as minor cosmetic imperfections. These are generally mentioned in the product descriptions, allowing customers to make informed decisions before purchasing.
Amazon Renewed offers customers a cost-effective way to purchase refurbished or pre-owned products that have been thoroughly inspected and tested, backed by warranties and Amazon’s return policy.
To wrap up, you need to consider your specific business needs and goals when deciding on the right inventory option for you. Take into account your budget, the type of products you sell, and how quickly you need to restock items.
So, now you know about the different types of inventory on Amazon and how they can help you manage your business effectively.
Whether you’re just starting out or are a seasoned seller, make sure you choose the right type of inventory management on Amazon to help your business grow and thrive.
And if you need expert advice and solution to your inventory management challenges, as well as other Amazon selling struggles, we at Signalytics are here at your service. Learn here more about how we can help you today.