Are you having trouble getting your inventory to the right place, at the right time, and in the right quantity and condition? You’re not alone.
As a seasoned Amazon seller, I can genuinely say that it’s challenging to track and monitor a product that goes through a long supply chain process before it arrives at its final destination.
One day, your inventory is in the hands of your supplier in China. Then next week, it goes to the freight forwarders in the port of Shanghai, customs officers in the US, and so on – until it finally lands in your target warehouse. Meanwhile, you’re back home working away on growing your Amazon business, which means you don’t have all day to keep track of your inventory.
What if some items are missing? Or they arrive in bad condition? You usually can’t just drop everything and physically go to the warehouse to find out.
Multiply that difficulty level by ten if you’re managing multiple SKUs across multiple global marketplaces! So yes, inventory tracking can be a logistical headache.
In this Inventory Tracker guide, we’ll take a look at:
- What is an Amazon Inventory Tracker?
- 11 Ways Amazon Inventory Trackers Improve Inventory Management
- Get Accurate Inventory Tracking
What is an Amazon Inventory Tracker?
An Amazon inventory tracker is a tool that allows you to track and monitor inventory within your supply chain management system. It provides accurate inventory checks and data about the exact location of your inventory, In Production orders in progress with each supplier or manufacturer, inventory levels within each third party warehouse, and current inventory levels at Amazon, among other important information.
Suppose you’re in the business of selling women’s swimwear. Summer’s fast approaching and you want to make sure you’ve got enough stock at FBA to supply the expected uptick in demand.
Naturally, you’ll want to reorder from your supplier well in advance of summer to avoid missing out on those sales. But placing a purchase order is only half the battle. You also want to ensure that your inventory gets shipped to your warehouse in time for the summer sale events.
Enter inventory tracking.
Inventory tracking makes inventory management much more, er, manageable. Once you’ve sent a Purchase Order (PO) to a supplier, use a stock tracker to keep an eye on your product every step of the way from the moment the supplier receives your PO and starts production all the way to delivery at its final destination, which includes packaging, shipping, customs clearance, and so on.
With an inventory tracker, you can also see all critical information laid out in a well-organized dashboard, making the process more efficient.
But that’s not the only reason why Amazon sellers should start using an inventory tracker.
11 Ways Amazon Inventory Trackers Improve Inventory Management
1. Increases product visibility
43% of small retail businesses struggle with low product visibility due to poor inventory management processes, such as inaccurate inventory data and communication failure at some point on the logistics chain. Either way, the affected businesses end up having to deal with erroneous production schedules, wrong order quantities, delayed shipments, and often experience difficulty tracking their stock as it comes in and goes out. No matter the reason, though, these businesses are putting themselves in a situation where they can be unaware of exactly when they need to reorder or transfer in order until it is too late. This often leads to stockouts or the need for expensive express shipments.
Suppose you’re dealing with the same issues as above. In that case, it’s time to invest in an inventory tracking tool that gives you the ability to have better control over your inventory levels and to place reorders and transfers in time to keep in stock without expensive air shipments.
Amazon inventory tracking software provides you with the kind of digital infrastructure that helps you to gather, share, and analyze information on your inventory levels and to set and track the lead times from your production and shipping processes.
With inventory tracking software, you can map all of your inventory processes online, ensuring that even without going to your warehouse, you can maintain an accurate accounting of which products are going in and out of your FBA or 3PL partner warehouses, and when. Doing so increases your product’s visibility, making a complex logistics chain just that much more simple and organized.
2. Know whether inventory is arriving by sea, air, or ground
Manage your expectations by knowing how and when your inventory will be arriving at your warehouses in the US, UK, and other marketplaces.
As you know, ocean, air, and ground shipping options all have their pros and cons. While air freight is fast and convenient, it can be too expensive for some products and will always each at your margins. In contrast, cargo by sea and ground transports are just as reliable yet more affordable, although they can take a very long time to arrive (e.g., around 30 days for ocean freight).
Nevertheless, whatever you end up choosing, you must know the lead times of your chosen freight transport to track your inventory accurately. A more advanced inventory tracker will allow you to break down your lead times between production, shipping, and other stages to allow you to track estimated completion and arrival dates so you can plan ahead to arrange the logistics of the various stages, avoiding the downtime that can sometimes occur when, let’s say, your supplier and freight forwarding company are not exactly in sync as to when the inventory will be available for shipping.
You can even use the data from previous transactions to make better shipping decisions in the future. Adjusting the lead times in your individual purchase orders to reflect the actual reality of what occurred with your shipments will allow you to identify opportunities to shift future orders’ lead times to more closely match what will actually happen in the real world. For example, if the freight forwarder is consistently missing their deadline which leads to stockouts on your end, it can cost your business a lot of money. Knowing this is likely to occur again, you can either adjust your lead times so that you reorder with enough time to account for such delays, or you may decide to find a more reliable international shipping company instead.
3. Tracks how many products are delivered successfully
Some products may get lost or stolen at some point in the shipping and handling process. And as you know, missing units are detrimental to your business. It decreases profits and increases your risk of stocking out and you’re likely to spend more money on air shipping to receive the extra stock in time for Prime Day or other special events.
As for 3rd-party warehouses, it allows you to keep your own record of what inventory you should have within each location instead of trusting and relying upon whatever archaic system your 3PL might have. If your numbers don’t match theirs, you’ll be able to find out why and get that missing inventory hunted down. This is so helpful and has saved my business more than once!
Oh, and if you’ve ever had to pay your 3PL for an inventory count because you didn’t trust their numbers only to find out that they were right all along, that’s a thing of the past. You can stay on the same page and catch discrepancies before it’s too late, or too costly.
With proper inventory tracking, you can easily trace inventory with damaged or missing units, wrong order quantities, or just plain and simple math errors back to their source to get them resolved quickly, making the necessary adjustments well before they bite you.
4. Streamlines your inventory processes
You should also set minimum or maximum stock levels for each ASIN per marketplace if your tool allows it. Then you can view the list of products that are nearing that level and place and send new purchase orders quickly.
For example, the ability to isolate products that are at risk of stocking out, or those that are overstocked means much more actionable efforts can be made to remedy the situation. These dashboards can also be viewed by your marketing team in order to act accordingly when creating their marketing plans.
Streamlined processes also mean fewer spreadsheets to deal with. We all know entering data manually into spreadsheets, keeping that data up-to-date, and juggling multiple spreadsheets can be time-consuming and error-prone, especially if you manage several SKUs.
What if you could put all of them together in one centralized location? Or just be rid of spreadsheets for once?
An inventory management system with a customizable order tracking tool gives you the ability to be somewhat omniscient – doing and seeing everything on a single platform.
5. Helps you stay within your Amazon restock limits
If you’ve been living under a rock, Amazon has recently replaced ASIN-level quantity limits with storage-type limits. It means restock limits are measured by storage type, and you’ll need to check your limits by going to Seller Central’s Inventory Performance Dashboard and find the Restock Limits tab. Click on the Storage Volume tab to review your total Storage Volume per Storage Type.
Before you inbound another shipment to your FBA warehouse, check your Amazon restock limits to see whether that’s a good idea. If you’ve already maxed out your restock limits with your existing inventory at a specific FBA warehouse, Amazon may reject your incoming inventory or not let you create shipments in the first place. Processing rejected shipments can be expensive and tedious, so avoiding it is key.
6. Prevents stockouts
As I’ve mentioned before, maintaining an inaccurate inventory report may result in stockouts, lost sales, and even expensive air shipments. So it’s not advisable to just rely on old-school inventory management practices like warehouse inventory counts and remembering numbers from memory to decide when and what to reorder. In fact, 34% of businesses ship late because they don’t realize they’re selling products that are close to stocking out.
Use data from your inventory management software and Amazon inventory tracker to:
- See what units are dropping below your buffer stock threshold point for reordering or transferring.
- Compare your inventory level against projected product sales.
- Get reorders placed to arrive before you run out of stock.
You should also set minimum or maximum stock levels for each ASIN per marketplace if your tool allows it. Then you can view the list of products that are nearing that level and place and send new purchase orders quickly.
7. Reduces risk of over-ordering
Keeping up with the changes in your inventory data will eliminate unnecessary expenses you didn’t know you were accruing.
Any inventory left to rot in a warehouse is profit loss because you’re not making money by letting it sit there for months and, at the same time, you’re accruing storage fees. You’ll spot problems like this if you have an Amazon inventory management software and order tracker that gives you access to data to inform trends and buyer behaviors.
You’ll also potentially have problems with not being able to restock your better-selling products as this inventory will be taking up valuable space within your restock limits.
Inventory tracking helps you dodge two costly problems – dead stock and storage costs.
8. Generates more accurate forecasting reports
Successful Amazon sellers know they need to spend their hard-earned money wisely by buying the correct quantities of each product to keep sales going, prevent inventory shortage, and avoid dead stocks.
Without them, it can be time-consuming and challenging to identify the slow-moving products that you need to clear out to free up some cash to invest in new products, pay-per-click advertising, digital marketing, and more.
9. Spots problems in the supply chain early
If you’re keeping track of your inventory levels, you’ll immediately detect problems like stockout risks, missing inventory, low product turnover rate, and late production schedules. Maybe your inventory failed to fully arrive from China on the date of delivery? You need to know the good and the bad. And one of the best ways to do that is by reconciling purchases and sales through a regularly maintained inventory management system.
10. Increases reordering efficiency
Increase the efficiency of your reorder processes with an Amazon inventory tracker that tells you what’s in stock. You can systematically look through your entire product catalog, allowing you to make informed decisions instead of checking with your warehouse before you write a purchase order.
Suppose your reports come from an advanced inventory tracking tool. In that case, you’ll quickly know if you already have products on order with your supplier along with their estimated lead times and the estimated dates and methods with which they will be delivered to your warehouse. You must have access to these details if you want to keep reordering under control.
11. Improves product visibility in the event of a product recall
Inventory tracking improves product traceability that in the event of a recall, you can quickly identify SKUs or batches that need to be returned to your supplier. For example, mobile phones with defective batteries or pet foods with unsafe ingredients. Simply said, both sellers and suppliers will have a smoother recall process.