Inventory Planning
Inventory planning involves creating a Par system for inventory that takes into account standard monthly sales, prep and transit time and Amazon receiving time. This is a data driven process that attempts to minimize inventory in storage while keeping a 100% availability of products for sale. Our standard template is a maximum 45 day supply and a minimum of 15 days worth of inventory between orders. This assumes 15 days is long enough between a PO being sent to the brand and Amazon having it available for sale. This number is adjusted as are base inventory numbers on at least a monthly (or per re-order) basis.
Shipment Creation
Amazon requires all bulk shipments to be processed using their methodology. We handle that process for you. You then determine if you want to provide the individual item labeling requirements or have our Prep Center handle that for you. We have Brands that use one method over the other and even some that use one method for certain products and the other for different portions of their product line.
Prep Center Facilitation
If doing the individual product labeling is outside the scope of the brand, we have a Prep Center option to do that work for you. Our current process requires the bulk prep items to be sent to our primary Prep Center (in Texas). In cases where Texas is costly, due to distance, we can potentially provide a closer option. The prep center will package the product to Amazon’s standards and individually label each item, then sent the items to the Amazon Fulfillment Centers indicated in the shipping plan.
Stranded Inventory Management
For various reasons, inventory becomes stranded in the Amazon Fulfillment Centers. This may be a result of a server migration corrupting the listing. It may be Amazon investigating a product for battery / hazmat status or customer complaints regarding a product. Regardless of the reason, we investigate and get the listing and the inventory back on track.
Storage Management
This ties in with Inventory Planning. Our goal is to keep 100% of the listings stocked with product 100% of the time. That is easily done by overloading the warehouses with 3-6 months worth of inventory; but that creates a high storage fee issue. We avoid that be creating a par inventory system and adjusting it for seasonality, up coming promotions / sales and the ebb and flow of sales. Our goal is to minimize storage fees while keeping some inventory on hand at all times. Our tendency is to err slightly on the side of on time ordering unless told otherwise.
Returns
Amazon handles Prime returns automatically. They place still new product back into stock as a matter of course. When clients mark their return as damaged or defective, Amazon makes no effort to determine if that is true or not, for you. Amazon marks it as unfulfillable and requests you sell it to them (at pennies on the dollar) or asks that you allow them to “destroy” it (for between 4-9%) of the retail cost.
We know that in excess of 70% of unfulfillable returns just have a damaged box or other cosmetic issues. Our standard is to have all such items returned and a member of my staff evaluates them. All items that are truly beyond help are destroyed. All other items (with brand permission) are sold in used condition through my company’s Seller Central Account. My staff makes the determination as to what condition Amazon will allow us to sell it under (Used, Like New; Used, Very Good; Used, Good…). We then deduct the agreed upon price of the item from your next billing statement. This brings capital back to the brand on otherwise lost product and it keeps Amazon from buying / “destroying” your product for a net compensation (or cost) of 4-9% and Amazon selling it in used condition; for 50-75% of the new price.