Amazon Inventory Management: 4 Tips on How to Tackle Disorder for Efficiency

Have you ever thought about the size of Amazon‘s inventory? As the world’s largest online retailer and most dominant online marketplace, you can bet that their warehouse(s) are stocked to the brim with all sorts of products. In fact, when you think of all the items Amazon has stored and readily available for sale and shipment, the might and complexity of their inventory become even more impressive. For businesses, though, Amazon’s expansive inventory and their solid management should raise an important question: how do they tackle such a large inventory and keep things running efficiently? This is an especially poignant question if you are selling products through Amazon, meaning you have an Amazon inventory of your own to handle. It’s no secret that the larger a business’ inventory is, the more complex it becomes to manage and organize it well, but Amazon certainly seems to have cracked the code for success, and you can too. Taking our cues from Amazon inventory management, we now present 4 tips on how to tackle disorder for efficiency in your warehouse.

Amazon Inventory Management displaying on mobile phone's screen

Understanding Chaotic Storage

We know, the term “chaotic storage” probably fills you with some stress and anxiety. In fact, you may think the current state of your warehouse is something close to “chaotic storage,” meaning things really aren’t that organized or managed well. However, chaotic storage is actually a system used by Amazon and other large businesses to manage their storage facilities efficiently. Thanks to automated inventory and warehouse management systems and software, techs like barcodes and barcode scanners are used to enact chaotic storage. The system itself is done as follows:

Incoming products are placed randomly in the warehouse on available shelf space without thought or worry about itemized locations or strategies.

While it sounds like madness, this is actually a method that truly increases warehouse efficiency and streamlines the inventory processes. Chaotic storage only works when you have a management software system in place, otherwise, there is no useful storage going on, only chaos.

It works by having the software accurately aggregate information about certain items and their locations within the warehouse using barcodes and barcode scanners. Users can print barcodes for certain products and use them to not just track, but organize inventory across single or multiple warehouses. When a warehouse is run by inventory management software,  you are able to appoint locations within the warehouse through barcoding. You can also create a type of barcode known as stock keeping units (SKUs) to identify certain products within the warehouse because SKUs are scanned into different locations throughout your warehouse(s). This simple addition makes it easy to find and track what you’re looking for no matter where it is.

4 Tips to Tackle Disorder for Efficiency

Now that you know about chaotic storage and how it works, let’s get to those 4 tips to tackle Amazon inventory management. With them, you can tackle disorder for efficiency every time.

1.  Use a Cloud-Based Inventory Management Software

Number one on our tip list is implementing a cloud-based inventory management software. It may seem surprising, but plenty of sellers and businesses still keep track of their inventory using spreadsheets and programs like Excel. While this may work for smaller businesses with smaller inventories, it is NOT the way to go in the long run. Spreadsheets can be inaccurate, become lost or damaged, and are an overall inefficient option. Software, on the other hand, allows you to keep track of inventory is more ways than one. Software systems are accurate, help automate different aspects of inventory management like ordering, provide real-time analytics, and keep everything saved and accessible through multiple channels and access points. If you sell on Amazon, there are also various tools to help you manage any and all inventories that integrate with Amazon.

Inventory management software also makes tracking products, interacting with customers, managing shipments and returns, and more easier than ever. This leads to excellent customer relationships and encounters with your unique store. Learn more about Finale Inventory and Amazon Inventory Management software here.

2. Utilize Real-Time Analytics

Staying up to date with what’s happening with your business is another great way to tackle disorder for efficiency. A large entity like Amazon is certainly always staying up to date on stock, selling performance, and other analytics to provide customers with the most accurate feedback, and you’ll want to do this too. Inventory management is immediately improved when using real-time analytics because it helps you gauge your stock’s selling performance from Amazon and elsewhere. When you have too much or too little stock it can result in higher costs over time and reduce customer experience, but with real-time analytics, you never have to worry about overstock or items being out-of-stock because you’ll always know your inventory numbers in real time, all the time. When you use real-time analytics, you also get help with the following:

  • Monitoring Referral Traffic: This means you’ll know where your marketing campaigns are working, where you need to take it up a notch, and where to abandon techniques.
  • Monitoring Revenue Goals: This means you stay current with revenue targets so that you know how your sales goals are going at all times. If a product is hurting or helping your goals, analytics keeps you in the loop.
  • Identifying Trends: This means you can monitor customer behavior at all times so that you can identify which products are in the highest demand. You can then take advantage of this information and work to meet customer needs before they arise.

3. Plan Ahead

Analytics can help you plan ahead to a degree. Knowing what’s happening with your inventory, customer, and trends give you a leg-up to plan for the future. By monitoring analytics, going over sales records and information, watching trends, and studying customer behavior, you can forecast and plan for coming trends, patterns, and more. To help with your planning ahead, also pay attention to the following in addition to sales information and customer behavior:

  • Reorder points
  • Previous overstocks
  • Customer feedback
  • Supplier feedback
  • Deliver dates and conditions
  • Previous backorder
  • Stock data

When planning ahead, you can make your business and inventory management much more efficient. You’ll know what shipments and products require your immediate attention, be able to monitor cost, predict estimated profit, and stay up to date on all shipments as they come and go.

4. Monitor Suppliers

Excellent business relies in part on an excellent seller/supplier relationship. Of course, a lot goes into strengthening this relationship and more. it is important to know when a supplier relationship is not working, which means you have to monitor for certain issues. For example, some suppliers won’t stick to drawn up schedules or deliver inventory on time, which can throw a wrench in how you manage inventory, as well as customer satisfaction, down the line. Keep an out for the following in case you  need to address it with your suppliers:

  • Estimated or promised dates for delivery
  • The dates deliveries are actually received
  • Quantity Order and Received
  • The condition of the package when it arrives

If you find that your seller is unreliable, it may be prudent to cut ties or else address the issues immediately in hopes of an improved service. To make things run even smoother, however, you may want to switch to automated product fulfillment through a known reliable source such as Amazon FBA. You already know that Amazon inventory management is solid, so switching to work with a known reliable source is a smart course of action.

Big blue storage warehouse crates

When it comes to inventory management, there are a few tried and true ways to know you are doing the best you can. Choosing the best cloud-based inventory management software, looking to established and reliable sources like Amazon, and keeping an eye on customer satisfaction are just some useful ways to tackle disorder for efficiency. When your business is running smoothly, you can expect good revenue and continued growth in the future. With the help of Amazon and Finale Inventory, there’s no telling how far your business can go.

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