Understanding & Planning Your Restock Point

man counting boxes

Imagine this: you’ve spent countless hours developing an amazing marketing strategy that’s been paying off with high sales. You’re thrilled that your products are flying off the shelves and every sale means more revenue. However, this also means that you’ll soon run out of inventory. How do you make sure you always have enough inventory so you don’t run out of stock?

Inventory forecasting predicts how much and how often you should order another batch of products so you won’t miss out on a sale. By using an Amazon restock tool like SellerMobile you can accurately predict how much inventory is needed based on historical sales data.

Understanding Restocking

With inventory forecasting, you can accurately determine how much product and how often you need to replenish your stock. Restock recommendations provide you with information you can use to determine how to balance running out of stock with having too much inventory. With the right Amazon seller app, you can understand when to restock and how much product to order from your supplier so you won’t have to worry about losing anymore sales.

  1. What is a Restock Point?

Every time a customer orders a product, it’s deducted from your current stock. When your inventory dips down to a certain level, you need to replenish with more product so you can keep up with consumer demands. The restock point refers to the minimum level at which you need to replenish your stock to prevent lost sales caused by the inability to fulfil a purchase. Inventory forecasting will tell you when you’re at the restock point and how much product you should order to avoid running out of stock.

  1. When to Use the Restock Point in Your Business

Knowing when to reorder items for inventory is a delicate balance between supplier reliability and consumer demand. Maintaining too much inventory means that you’ll be paying for extra storage space, while not having enough inventory means that you’ll potentially lose a sale. 

While some people believe restocking tips only apply during times of extreme pressure on inventory due to back-to-back large orders (such as Christmastime), it’s best not to risk anything when it comes to inventory levels and always have prevention tactics put into place! Paying attention to the restock point allows stores with multiple SKUs–meaning multiple items–an easy way to manage stock levels while avoiding items completely running out before supplies are replenished. 

SellerMobile’s Amazon restock tool helps you maximize sales by keeping track of your inventory levels and what products to restock when. You can view data, receive out of stock alerts, and review your inventory stock on the SellerMobile web app or directly on your mobile phone.

  1. How to Calculate Your Restock Points 

Identifying your restock points is important so you always know that key number that you don’t want to drop below before ordering more inventory.

Restock Point = Lead Time Demand + Safety Stock

Lead Time Demand = Lead Time x Average Daily Sales

Safety Stock = (Max Daily Orders x Max Lead Time) – (Average Daily Orders x Average Lead Time)

Lead Time Demand – the total demand between the current date and the anticipated date of the next delivery, if a restock order is placed on the current date to replenish inventory.

Safety Stock – an additional quantity of goods stored as a safety net in addition to the required amount to prevent going out of stock due to emergencies. 

Restock points ensure that you don’t fall behind on your next batch of inventory. With an accurate restock point for each SKU, you’ll always have enough stock on hand to satisfy customer demand — without having to pay for extra Amazon FBA space in their warehouse. 

The SellerMobile Restock tool is a handy resource to help you get the most out of your inventory. This feature provides recommendations on which products to restock, suggested replenishment quantities, and ship-by dates that are tailored to your specific needs as determined by inputs like lead time and case pack quantity. The dashboard helps you keep track of demand so there’s no need to worry about overstocking; with adaptive forecasting technology in place, orders will automatically be adjusted based on trends from previous months which ensures sales can be maximized without any unnecessary stock left unsold.

What is the Most Effective Way to Replenish Inventory?

It’s important for sellers to find the right balance between having just enough stock in hand, not too much, and not below your needs. You need to consider the demand of your customers and the market demand of your product. Avoid over-ordering stock from your manufacturer without doing proper research so you won’t end up with too much inventory. You also have to be careful not to order too little stock to keep up with the demand. Here are some tips to help you keep the balance in your inventory:

  • Improved User Experience: Nothing puts your customers off faster than eagerly getting ready to purchase an item, only to find that you’re out of stock for the specific product they want. Getting your restocking formula right ensures that you don’t lose potential sales by always having just enough inventory for all the product demand you receive. You want to prove your reliability to your customers so that they don’t lose faith in your business.
  • Don’t Rush: Remember to plan your restock ahead of time. Keep in mind that you should avoid placing “rush orders” to your manufacturers since this will only lead to added cost on your end. By using SellerMobile’s Amazon restock tool you can easily monitor your inventory and determine when the best time to restock is.
  • Save: Pay close attention to the relationship between: Customer Demand + Safety Stock + Lead Time Demand. These ultimately help you decide when you should reorder, as well as how much to stock up so that you’re not left with overflowing shelves, much more than your customers demand from you.

Restock: Wrapping Up

It’s important to understand the inventory levels of your products, and plan properly for when you need a restock. The best way to plan your restock point is by looking at the data: you should be able to see when customers are buying more and less of your products, learn about their shopping habits from items they add into their cart that don’t end up being purchased as often, and determine how long inventory will last before having to replenish it. SellerMobile will automate a lot of the analyses for you, and with this information in hand, you can create an accurate timeline for what needs stocking next.

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