“Master Inventory Control”
For most of us, inventory is our single biggest expense. Amazon is very simple – In general, the more SKUs you have, the more you will sell.
But under performing inventory can be a profit trap. As you go through the year, follow these steps:
– Practice Just in Time Inventory. Watch your stock like a hawk – know how long it takes to reorder and get new inventory into Amazon. Ideally you new inventory will hit FBA just as your last item sells.
-Pull an inventory report and a transaction report every month. On the transaction report, sort your transactions by SKU and create an extra column where you enter the cost of that product (including inbound and FBA shipping cost). This will tell you what your top sellers are and how much money you are making.
On your inventory report identify your slow sellers and take action such as lowering the price, rewriting your titles, keywords and descriptions, etc. Basically do anything it takes to get that inventory moving. If it just won’t move, then you have a dog product and you want to really lower the cost to get that money back to put to work on products that sell.
– Keep searching for new items to sell to replace those slow sellers.
– Don’t be a margin pig. Yes big profit margins are nice but not if the items are sitting there a long time. Lowering your price and margin will allow you to turn your inventory over more often. And, the more times you can turn you inventory over in a year the more money you will make.
-Don’t forget about the extra Long Term Storage Costs Amazon imposes twice a year on inventory that has been in Amazon over a year. Don’t get caught with a lot of that. It can be very expensive and a real profit killer.
Follow these steps and I guarantee you will see a more profitable 2015 than last year.
Good luck and Happy New Year