Every Amazon seller needs to understand the importance of having a good inventory strategy in order to properly equip their business and avoid losing sales. While you can handle your restock calculations manually, third-party Amazon inventory forecasting software can greatly improve the management of your inventory and you can configure them to receive Amazon restocking alerts and notifications so you always know when you’re running low on stock.
What Is a Lost Sale?
SellerMobile describes lost sales as missed selling opportunities. This means that you could have potentially made a sale if you had had enough stock on-hand in your inventory. When the demand is not met due to out-of-stock items, then you experience a “lost sale”.
So how do you avoid a lost sale?
Understanding Market Demand
To be able to properly forecast your inventory, you first need to know how much of your product customers are willing to purchase. A good understanding of market demand allows you to see the profitability of your product in the future. Once you have an accurate grasp on this, you can create effective marketing plans, push PPC ads, introduce promotions, and raise or lower prices depending on the demand of your product.
There are products with year-round demand and steady sales that seldom rise or fall dramatically. On the other hand, there are also items that have a noted peak based on seasonal demand. For example, beach towels are more commonly purchased during summer months while Christmas decorations are often purchased in the months leading up to the holidays. You should also keep an eye out for trends happening on Amazon as those will help you understand what customers are looking for at the moment and follow the evolving attitudes of the consumer.
Apps for Amazon FBA like Keyword Inspector help you learn about how different products and brands are performing on Amazon to help you determine which product and category is right for you. You can check for product rankings, monthly sales, keyword rankings, number of sellers, and more. With this data you can make better informed decisions when it comes to growing your business and the next winning product to add to your portfolio.
Manage Your Inventory with Demand Forecasting
An important factor in becoming a successful Amazon seller is having a stellar inventory management system. A good inventory strategy lets you prepare your stock ahead of time and avoid purchasing too many unsellable items. You want to strike the perfect balance between having just enough inventory on-hand to avoid losing sales, while not overcompensating with extra stock so that you are charged higher fees because of your surplus inventory that may become difficult to sell.
Demand forecasting offers a safer and easier way to know how much product you should have in your inventory instead of relying on guesstimations. Proper demand forecasting will utilize past sales history data to predict future demand for your products. It lets you know how many sales you can potentially make at a given time in the future. With this data-driven approach to predicting future sales by analyzing past information, you can better understand why some of your products are not performing as well as others.
The SellerMobile demand forecasting tool allows you to customize your demand forecast and manually override pre-existing numbers to match your sales plan. It works hand-in-hand with SellerMobile’s Amazon restock tool to provide you with accurate data to avoid understocking or overstocking. If you’re planning to run a promotion in the upcoming month, you can change up the data accordingly to get an even more accurate demand forecast, providing you with an updated and effective method for Amazon inventory forecasting.
Sales Forecasting and Demand Forecasting
The term sales forecasting is oftentimes interchanged with demand forecasting, however there is a difference between the two. Sales forecasting estimates future revenue by predicting the actual amount of sales your products will make in the future, while demand forecasting focuses on predicting how many customers are interested in purchasing your product. For example, you may see that there is a high demand for your products but maybe this doesn’t translate into sales. Some reasons for this could be that you’re not always getting the Amazon buy box, you’re not ranking highly enough with your chosen keywords, or your competitors are consistently running ads and winning more customers over than you.
You as the seller are responsible for converting customer demand into sales. There are a number of ways to start bumping up your sales as an FBA seller: you can run PPC ads and check trends on Amazon, use higher ranking and converting keywords, optimize product listings, or actively compete for the buy box, among other marketing tactics. By correctly targeting that pool of potential customers and engaging them, you can grow your own loyal customer base. Track your progress and create plans by using an Amazon sales forecasting software like SellerMobile.
Inventory Forecasting: The Bottom Line
Maintaining solid, optimal Amazon inventory management means finding that sweet spot somewhere between having enough stock on-hand without having too many unsellable items. With inventory demand forecasting, you can accurately predict how much inventory you should have in stock based on historical sales data. Get notified by SellerMobile and receive Amazon restocking alerts when your products are running out of stock to avoid lost sales so you can scale your business.