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Five ways to ace your Amazon inventory management

by TaxJar February 1, 2024

This guest post comes courtesy of our friends at Payability. Please note: This blog was originally published in 2020. It’s since been updated for accuracy and comprehensiveness.

As an Amazon seller, inventory management is arguably the most important system you can have in place. Without it, you wouldn’t have a functioning storefront — you could go out of stock or ultimately waste money buying Amazon inventory that doesn’t sell. 

Whether a stockout is causing you to lose sales and SEO rank, or an oversupply is sitting on your shelves, you’re less likely to hit your sales goals and your business can’t grow.

To avoid either scenario and ensure you’re on the right path for growth, here are 5 ways you can ace your inventory management.

  1. Optimize product price

Figuring out how to price your products is the first step in building a solid inventory management system. After all, if you price too low, your stock could fly off the shelves faster than you’re able to replenish it. On the flip side, pricing too high could mean that your inventory doesn’t sell at all. 

For help figuring out the right price for your products, look into a repricing service like SellerEngineFeedvisor, or XSellco, or research the pricing and sales history through an Amazon seller scanning app.

  1. Set inventory minimums 

A simple way to prevent an Amazon stockout is by never letting your inventory get to 0 before you replenish it. Instead, set a minimum viable stock level, or the minimum amount of stock you should have on hand at any given time. Then, if you hit or fall below that level, you’ll know to order more.

Determining what the minimum should be and how much more to order goes hand in hand with our next tip.

  1. Talk to your suppliers

Whether you store your own inventory, use FBA or do dropshipping, you need to manage the supply chain. Once you’ve figured out your sales velocity and have an idea of when demand spikes, tell your suppliers. Having an open line of communication with them will make future, even last minute, orders more seamless.

You should also talk to them about their production cycles — if they see a demand spike the same time as your business, it could take them longer to fulfill your orders. Knowing this upfront will allow you to plan better and prevent an unnecessarily long stockout. 

  1. Use inventory management software

If you’re following all of these steps and want an extra layer of protection against stockouts or oversupply, look into an inventory management program like Teikametrics or Skubana

Services like these offer everything from repricing to inventory analytics to restocking optimization — some even allow you to centralize your inventory management if you sell on other platforms like Etsy, eBay or your own eCommerce website. 

As you can see, Amazon inventory management doesn’t have to be difficult — it’s all in how you plan. Just don’t forget to pay close and regular attention to your inventory reports, whether they’re on Seller Central or a third party inventory management program. 

  1. Manage cash flow

Cash flow keeps Amazon sellers competitive. The more access to cash you have the more inventory you can buy and turn for a profit. However, Amazon’s two week payment delay can make this seemingly simple task a lot more difficult. Many sellers lose the buy box and miss out on opportunities to stock up on inventory at optimal times while waiting for Amazon to release their payments. Thankfully, there’s a solution to the unique cash flow issues facing Amazon sellers. 

Payability allows sellers to cash out 80% of their Amazon earnings every business day at a 2% flat fee. The remaining 20% stays in a reserve to cover chargebacks and returns and is released to the seller on Amazon’s regular two week schedule. With daily payouts you can buy more, sell faster and increase profitability without assuming the risk of debt or taking from savings. Unlike credit cards that have limits, constant cash flow gives sellers the ability to buy inventory at the speed in which it sells. 

Amazon entrepreneurs like Jump City Toys and Gifts Fulfilled scaled their businesses with the help of Payability. For more on Payability and how to sign up visit

About the Author

Miranda Eifler is a full-service marketing communications writer and strategist. For nearly a decade, she’s been creating content to help budding and established brands tell their stories, grow their customer bases, and inspire their followers to take action.

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