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Friday, June 21, 2024

Amazon Inventory control? Why do you need it?

You may encounter difficulty keeping track of your inventory if you are an Amazon seller. Nevertheless, sellers can now streamline their supply chains with systems, processes, and technology. Your Amazon merchandise can be tracked efficiently and accurately with the help of an inventory control system. Amazon Inventory control? Why do you need it?

You will learn what inventory control means, why it is important, and how it works in this guide. We will also provide tips for inventory control, and discuss some inventory control, techniques which can be applied to Amazon warehouse management.

How does inventory control work?

The management of a company’s inventory levels, whether they are spread across various warehouses or located elsewhere, is known as inventory control, also known as stock control. From the time an item enters your stock to when it leaves or ends up in the trash, it is managed in inventory management. In the Amazon warehouse system, inventory control software tracks and monitors movements, usage, and storage.

Inventory control involves keeping the correct amount of each product in your inventory so that you are not overstocked. Controlling your inventory properly is necessary to keep track of your purchase orders and ensure the smooth operation of your supply chain. There can be systems set up to help with forecasting and allow reorder points to be set as well.

Inventory control and why you need it

The inventories need not always be complicated to be effective, but their importance cannot be underestimated. Stock levels help you to know where your product is at any given time;

  • The best time to reorder. You should first know when your stock is low enough to reorder. If you cannot provide products to your customers, you do not want to be in that position. This is similar to doing your weekly grocery shopping. The last thing you would do is wait until the carton is empty before purchasing additional milk.
  • The amount to reorder. Let’s assume that you are the owner of an online pet store. You have been surprised at how well Spiked Rubber Dog Ball toys have been selling compared to what you anticipated. This means that you will have to put in an order for more of those. On the other hand, you do not want to over-order and piles of high pitch toys to accumulate in the warehouse. Maintaining inventory also ensures steady sales.
  • How many more should be ordered. Following the toy illustration, if Spiked Rubber Dog Balls are selling well, will a squeaky tomato do equally well? In addition, tracking the inventory correctly will assist with the purchase and successful implementation of new products.
  • What is the maximum time stock can remain outside or in the warehouse? This may seem obvious to those who are concerned about perishable items. Unfortunately, if inventory management is faulty, it can result in a lot of goods going unaccounted for and ultimately being unsold. This will cause them to become obsolete or to become out of style.

Techniques for controlling inventory

Inventory control techniques and systems are widely available for use by businesses. According to your inventory size and business operations, each has its advantages and disadvantages. The needs of retailers may be different from those of wholesalers, for example. Get an understanding of your current and future needs by defining your business goals and metrics.

Next, determine whether your company should utilize a:

Controlling inventory with a spreadsheet

Spreadsheets can be used to manually control inventory in small businesses that do not store a large amount of inventory or have a variety of inventory types. In comparison to the other two, spreadsheets are generally less costly, but inventory control is more difficult. It will not be necessary for your staff members to learn how to use an automated system.

The periodic inventory system

Physical inventory counts are typically the basis for periodic inventory systems. Physical inventory counts are used to updating inventory information periodically. Business organizations with large inventory levels or frequent inventory movement will find this to be extremely time-consuming. However, it can be used by organizations that do not deal with a large number of orders.

System of perpetual inventory

Continual inventory systems are continuously updating your stock as transactions occur or as new stock is received through technology solutions. Over 72% of all retailers intend to utilize automation, sensors, and analytics to provide real-time visibility into their supply chains. There is a built-in capability that allows you to apply techniques such as Economic Order Quantity (EOQ) with ease.

4 tips when it comes to inventory control

So now that we have a basic understanding of what inventory control is and the methods that you may employ for inventory control. Let us look at some suggestions for inventory control.

Track inventory in real-time

It cannot be understated how valuable automation is. You can determine financial and business decisions with the most accurate, up-to-date information provided by real-time tracking. Real-time tracking can contribute to increasing return on investment and reducing operating expenses. It is extremely useful when selling on more than one channel to be able to track inventory automatically. Syncing the orders and inventory information in real-time across all channels can prevent overselling, which can be detrimental to the customer experience.

Maintain consistency with your labeling system

When it comes to identifying inventory and labeling, warehouse management gives companies lots of options. Make sure your labeling strategies are consistently based on the system that works for your business. As an example, SKUs help your team manage inventory easily. The barcode allows you to manage your inventory more effectively across multiple locations and through multiple channels.

Radio Frequency Identification (RFID) might also be utilized by your company for product identification. RFID can be used not just to track raw materials but finished stock, as well, and the technology can be used throughout the supply chain as well.

ABC Analysis

In a perpetual system, ABC analysis is a method you can use. By using ABC analysis, inventory items are classified according to the consumption value of each item. Generally, this is defined as the total value of inventory consumed over a certain period of time. The letters identify the various categories into which an item may fit.

  • Items with the highest consumption value are referred to as A items. In this case, a minimal number of items will be consumed by a large number of people.
  • Items in category B are those with a lower consumption value than those in A, though higher than those in C.
  • The consumption value of items C is the lowest. The risk associated with this stock is low, but the return is also low. These stocks typically constitute a substantial portion of your overall holdings.

Establish reorder points

The process of reordering can be a bit tricky in inventory control, although it may seem obvious. In order to avoid carrying dead stock costs, you wish to ensure that your customers have quick access to stock. These levels can be set in inventory control software so that you are alerted when a certain level is reached. EOQ or ABC analysis can be used to specify reorder points for individual products.

Additionally, it may help you manage your lead time more effectively. When an order is placed to replenish inventory, the lead time is the time between placing the order and receiving the order. Lead time influences your requirement for stock. Excessive storage space is wasted on the dead stock. According to Amazon, the average cost per square foot for warehouse space in its distribution centers and warehouses is $5.08.


From a newly established business to an Amazon seller, inventory control is essential for any business. Your cash flow will be optimized, and your inventory management costs will be reduced. Implementing inventory control software that tracks your assets in real-time can help you implement an automated inventory control strategy. It will help you stay on top of your stock levels and enable you to make informed decisions.

You have the option of choosing between a periodic or perpetual inventory system, even if your company has relatively modest operations. A perpetual inventory system, on the other hand, would be a better option if you have a lot of stock or a higher volume of processes. Lastly, if you wish to finish off your retail technology stack, look into inventory systems that can be seamlessly integrated with other components of your business.

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