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Inventory Management For Amazon Sellers


December 15, 2023

Having Amazon inventory is a double-edged sword. On the one hand, you have items to sell; on the other hand, you have to figure out a way to store, ship, and track every single item. It can be overwhelming, and if you don’t have a system in place, you could end up losing money and customers. Fortunately, Amazon makes it pretty easy to choose how you want to manage your inventory.


But if you’re new to inventory management or feel like you’re in over your head, we understand. Running an eCommerce business is tough, and managing inventory can be one of the biggest headaches for Amazon Sellers. You’ve probably got a lot of questions about how to get started and how to optimize your inventory management. For example, is it better to use Amazon FBA or handle inventory management on your own? Can you use a third-party company to manage your Amazon inventory? How can you keep track of what you have in stock? Finally, what is the best inventory management software for Amazon sellers?


In today’s guide, we will answer all of these questions and more, so let’s get started!

The Importance Of Amazon Inventory Management

Amazon has notoriously high storage fees, which means that managing your inventory (and avoiding extra fees) is key to maintaining a healthy profit. Currently, Amazon storage fees start at $0.87 per cubic foot of storage, per month. However, the vast majority of Amazon Sellers will need more than one cubic foot, and the type of items you store can also increase the price. If you have a large inventory that takes up a lot of space, these fees can add up fast.


This means that you could end up losing a lot of money if you overstock an item and need to pay exorbitant storage fees. But it’s also important to consider the cost of being out of stock. Even though you won’t rack up storage fees, your business will lose momentum by virtue of having unavailable products. The momentum that drives Amazon’s algorithm to recommend your products will cease, causing you to lose more business over the short and long term.

Inventory Management When Making Bundles & Product Kits

Bundles and product kits are essentially just multiple individual items put together and sold as a single unit. This makes it more convenient for customers to get everything they need all at once, but it can complicate your inventory management as an Amazon Seller. This is because you’re unlikely to store pre-made bundles and kits, especially if you sell some or all of the individual components by themselves. It just wouldn’t make sense to create bundled packages ahead of time, only to later realize that you need to separate individual items that are selling faster. As a result, you need to keep an inventory of the individual items in a bundle to ensure that you will be able to meet the demand for bundles with each new order. 


Let’s use an example to illustrate this aspect of inventory management. Imagine that you sell men’s shaving kits that include 1 bottle of shaving cream, 1 bottle of aftershave, and 1 razor. Currently, this is what your inventory looks like:


●     200 bottles of shaving cream

●     80 bottles of aftershave

●     400 razors


Since bundled shaving kits require all three products, you can only fulfill as many bundle orders as you have of all three products. In this case, you only have 80 bottles of aftershave, so you’ll be able to fulfill a maximum of 80 shaving kit orders until you get more aftershave in stock.

Factoring In Amazon Returns

Whether or not you’re enrolled in Amazon FBA, Amazon requires you to adhere to its return policies. This means that customers generally have a 30-day return window on most products. If you fail to account for returned items, your inventory will be completely off. This is why it’s so important to have an automated process. Rather than manually adding returned items back into your inventory, you can simply confirm when a product has been returned and have inventory-tracking software do the rest.


However, this can still get complicated if items are returned to you (or an Amazon fulfillment center) in subpar condition. Unfortunately, you have little control over whether Amazon accepts a return or not, which means you may have to accept damaged items without recourse. In this case, you’ll still have to refund the cost of the item, but you won’t be able to keep it in your inventory for future resale.

Knowing When To Reorder

Knowing exactly when to reorder (and how much to reorder) is the most important part of managing your Amazon inventory. As previously mentioned, understocking popular items will discourage Amazon from promoting your products in the future, while overstocking less popular items will cost you more in storage fees. This makes inventory management a delicate balance that can only be properly maintained if you have up-to-date information.


Basic accounting software will often give you standard information about how much you have in stock of various items. However, this doesn’t necessarily help you know when or how much to order. To anticipate your inventory needs, you must evaluate historical sales and even get projections on future sales. This way, you can order with much greater confidence, reducing the risk that you’ll order too much or too little of any given product.

Stock Smarter With ConnectBooks

The only way to know that you’re optimizing your inventory is to make sure that you have the correct information. When syncing between Amazon and QuickBooks, you can ensure that all of your data is 100% accurate by using ConnectBooks for inventory management. With ConnectBooks, you get one-click syncing to bring all of your inventory data straight from Amazon into your accounting software. Then, you can evaluate the big picture and even dig down into the details of each product.


ConnectBooks is specifically designed to overcome the pain points of Amazon Sellers. Our software maps bundle components to QuickBooks SKU so that you know exactly where you stand with bundle and kit orders. Additionally, ConnectBooks automatically puts resellable returns into your inventory, while removing unsellable returns and categorizing them as a loss. Not only does this help keep your inventory accurate, but it also gives you more information on how much returns are really costing your business.


If all that weren’t enough, ConnectBooks uses your order history to create intelligent order reports that base future orders on projected sales. This can help keep your inventory in a healthy place based on months or even years of available data. And whenever inventory is getting low, ConnectBooks will give you a stock alert and let you decide if it’s the right time to order more. 


Do you want to learn more about inventory management for Amazon Sellers? If so, reach out to the experts at ConnectBooks today!