For routine inventory management such FBA tasks such as shipping plans for fulfillment orders, many online seller use an Amazon Inventory Management tool. For the smallest sellers, it may do the job. For small businesses, medium-sized businesses, large scale operations, and multi-channel eCommerce sellers, they may want to upgrade a more complete and robust system.
Tying your inventory management system to warehouse software, order tracking, or supply chains can create significant efficiencies that the Amazon Inventory Management tool alone can’t handle.
Amazon’s the undisputed king when it comes to online selling. On average, SMBs in the U.S. sell more than 4,000 items every minute. Larger companies sell even more. If you’re selling online, Amazon is vital to success.
What is Amazon Inventory Management?
There are two inventory options through Amazon. You can use Fulfillment by Amazon (FBA) or DIY. FBA handles the transactions, tells you where to send the product, and then manages distribution through its fulfillment location. A second option is to do the fulfillment yourself, where you manage the supply chain and distribution.
If you’re only selling through Amazon, using the Amazon Management Tool can work well to manage your online inventory. It won’t do so well when it comes to managing your warehouse, managing your multi-channel selling, and handling your supply chain.
Pros and Cons of FBA
If you’re looking for a hands-off approach to fulfillment, FBA has some advantages. It handles products through delivery. Because Amazon is one of the biggest shippers in the world, it may be cheaper to ship products with faster delivery times. It also has some big disadvantages. There are increased fees for handling the fulfillment, long-term storage fees for products that sit on warehouse shelves, and minimum stocking levels.
Handling your inventory and fulfillment yourself lets you control the relationship with the customer directly. There are fewer fees and higher margins. You control the inventory levels.
Whether you use Amazon FBA or do fulfillment yourself, managing your inventory is crucial. Your IMS needs to manage your inventory and generate the data you need to integrate into Amazon inventory management systems.
Why You Need an Inventory Management System Separate from Amazon
Even if you are satisfied with the Amazon Inventory Management tool, there are good reasons to use a more robust solution for your inventory management.
Amazon is Your Friend (and Possibly Your Enemy)
Amazon can bring sales to you that you wouldn’t have without them. More than 2 billion visitors each month go to the site. Two-thirds of online shoppers start their product search at Amazon. That’s twice as many that start searching on Google or other search engines and 16X the number that will go directly to brand websites.
Amazon can be your friend, but it can also be your enemy. If you have difficulty with Amazon practices or if they add requirements you can’t meet, the business can disappear instantly. A survey of Amazon sellers showed their greatest fear was that Amazon could take away their seller privileges.
Amazon Can Change the Rules
Amazon can change the rules at any time. The online marketplace has announced, for example, the sellers of small and light items that use FBA (Fulfillment by Amazon) will see cost increases. Items larger than 10 ounces or $7 will be converted to standard FB fees. They may want to internalize their inventory rather than rely on Amazon.
You’re Probably Selling on More Than Just Amazon
If you’re selling online, you’re probably doing it on more than just Amazon. If not, you should be! Multichannel customers spend 3X more than single-channel shoppers. They also have a 30% higher lifetime value.
If you are managing your inventory through Amazon, you may be missing opportunities with other sellers. An independent inventory management system that can handle multi-channel inventory and your supply chain will be the most efficient way to do business.
The Best eCommerce Inventory Management Software
Using eCommerce Inventory Management Software (IMS) with SkuVault provides complete integration with Amazon Inventory Management. It also helps you easily manage your multi-channel inventory and warehouse operations in a way that Amazon can’t do. This helps fulfill orders more promptly while reducing errors and lowering your operating costs.
Companies that use SkuVault report 87% faster fulfillment, 90% fewer out of stocks, and 83% fewer mis-ships.
SkuVault can handle of your Amazon inventory needs and it can also integrate with your favorite eCommerce solutions, including:
- Channel Advisor
- Big Commerce
- And more
SkuVault eCommerce IMS helps you sync all of your sales channels, track your online inventory, and generate the data you need to manage your supply chain in one easy-to-use interface. This gives you complete visibility into every facet of your inventory, including replenishing Amazon FBA orders with a simple button click.
Quality Control on Amazon
Another major concern for Amazon sellers is their Performance Rating. If there are problems with order defects, pre-fulfillment cancellation rates, or late shipments, or negative feedback, it can cause significant issues. Sellers with poor performance scores can be suspended or blocked.
Poor reviews or performance scores can lower your ranking within Amazon when someone searches. That’s bad news. 70% of Amazon shoppers never make it past the first page of listings. If you get pushed down the list because of performance problems, it’s going to hurt your sales.
Managing your FBA inventory, preventing overselling, and closely monitoring inventory in your FBA warehouses can help you maintained positive performance ratings. SkuVault helps you establish strong quality control processes to make sure your order fulfillment is done right. By automating the warehouse picking process, your warehouse inventory is easier to track and errors are minimized. You’ll find what needs to be picked and where to get it fast.
- Interactive Wave Picking
- Automatic Pick Lists
- Efficient Pick Locations
This helps reduce mistakes like mis-picks and mis-ships. It lowers your customer service and support costs while improving your Amazon Seller Performance Ratings.
These benefits are just as important if you are doing fulfillment yourself for Amazon or other multi-channel sales.
SkuVault’s Warehouse Management System can pull orders and invoices into your shipping software, such as ShipWorks or ShipStation, and generate efficient pick lists that work as packing slips. SkuVault can sync order status and weight. This eliminates manual updating against marketplaces for more efficient shopping.
Interested in learning more? Here are a few more resources we think you’ll like!
- Selling on Amazon? You Need to Read This
- Amazon Warehouses: Learn How to Harness Chaos For Efficiency
Ready to learn about Amazon Inventory Management? One of our inventory management experts is ready to walk you through exactly how SkuVault can benefit your business and answer all your questions about how our powerful Inventory and Warehouse Management System can help address the needs of your unique business.