Optimize and Excel: Streamlining Store Inventory Management for Amazon Sellers in 2023

May 7, 2024 Store Inventory Management for Amazon Sellers

Retail sellers and E-commerce sellers are both facing challenges when it comes to managing inventory.

Not giving attention to store inventory control can create challenges for digital marketers and sellers. 

Some sellers have difficulties when their product gets removed from the catalog, and some sellers cannot deliver products as their inventory is temporarily unavailable.

Managing your retail inventory is important because it helps to sell more and build customer satisfaction.

When you can check the inventory, your costs will go down. 

And you can also check if there is any overstock or not so that you can reduce your high storage costs. 

This article will discuss how you can manage your store inventory and run a stable business.

What do you mean by store inventory control?

Store Inventory control tracks a store’s retail inventory to ensure it is balanced.

It means that the amount of products equals or is less than the amount in the register.

Sellers need to be able to control their inventory as they need to be able to accurately predict their cost and sale amount to determine their profit margin.

You can use so much software to manage and pinpoint trends, price changes and identify high-risk areas.

Retail store inventory control comes up with the retail sector to become efficient with more technology which makes your job easier. 

You can manage Stores and inventory and stock levels from small to big retail stores.

An effective inventory control technique reduces inventory costs, meets customer demand, and increases warehouse space. 

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What are the types of store inventory?

There are four types of store inventory for amazon sellers;

Raw materials, WIP or work-in-progress, Finished goods and MRO or maintenance-repair-overhaul.

It becomes easy to manage your inventory and work smartly when you know which type of inventory you have.

Raw Materials:

The materials needed to turn your store inventory into a finished product are raw materials.

These items are components currently in inventory but have not yet been used in WIP or finished goods inventory. 

Sellers use two kinds of raw materials, one is direct materials, and the other one is indirect materials.

Work-in-process (WIP):

As the name suggests, the Stores and inventory being worked on is a work in progress.

From a cost viewpoint, WIP includes raw materials that are still “in production” at the end of the accounting period.

 In other words, your company uses all direct and indirect raw materials to manufacture finished goods in the WIP inventory.

Finished Goods:

Perhaps the simplest of all counting methods is counting finished products.

The stock you offer for sale on your website is the finished product.

Any product ready to be sold to your customers falls into this category.

 Finished products can be a pre-packaged fruit salad, a monogrammed bathrobe, or a custom-built laptop ready for an employee to use.


MRO inventory, also known as maintenance, repair and consumables, is about the smallest details.

This is the store inventory needed to assemble and sell the finished product, but it is not built into it.

Depending on the parts of your business, this stock may be in stock, at a supplier, or on delivery.

Why store inventory management is important for amazon sellers?

An image showcasing store inventory management.

Stores and inventory management give a seller a better understanding of the stock levels.

Through it, you can avoid overstocking and understocking. 

Help to control quality:

With inventory control, you always have an eye on your products, no matter where they are.

This means that during inventories, you can also check quality control occasionally.

If you find measures below your company’s standards, there is an opportunity to act. Particularly in the case of a product recall.

Improve inventory accounting:

Inventory accounting is an important part of store inventory control.

Measures the value of physical inventory and the cost of goods sold over time.

 It means you can control dead stock that is no longer of value, reduce waste and more easily calculate the value of your retail inventory.

also means you can improve your bottom line by only keeping the needed products.

Keeps count of stock:

Part of the retail inventory control method is regular checking.

This involves counting every stock item you have.It lets you control stock levels and establish your stock.

 You can also see where you may run out of some products and bring in additional stock if needed.

Manage to oversell:

Once you know the number of products you have in the warehouse, you can be sure you won’t accidentally oversell your customers or sell your most popular item.

You can also list your stock levels in real time on your website and keep your POS system up to date with in-store stock availability

What are the issues Amazon sellers face?

Some of the issues that Amazon sellers face

When it comes to managing retail inventory, you have to maintain so many things.

Sometimes sellers face several difficulties, such as;

Time investment and Errors:

Time spent on manual tasks like inventory management is a wasted opportunity to focus attention and resources where needed most.

Many other business areas require your full attention, and you cannot afford any distractions when making or confirming a sale.

Each completed order requires entering numbers manually and checking for varying stock levels throughout the year!

Manual activities increase the risk of errors, and correcting these activities takes a long time.

You can’t afford to spend half the day managing store inventory. This prevents you from overseeing other important business areas like marketing and customer service. 

Incorrect tracking:

Order management, product sourcing and shipping management are essential to good product tracking.

You need to know where your Retail store inventory is at all times. 

Otherwise, you cannot make trading decisions. Incorrect tracking robs you of the ability to calculate the current inventory.

As a result, you may suffer from shortages or excess inventory.

 Both outcomes are devastating for Amazon sellers. Unavailable ASINs lose some of their ranking and core conversion potential.

Accurate inventory tracking is key to successful store inventory management.

Over inventory:

Most new retailers suffered from a lack of inventory because they were unaware of spikes in product demand. Use forecasts and analytics to avoid running out of stock.

 Excess inventory is a worse problem than a lack of inventory. Amazon charges a fee if your inventory doesn’t sell after 90 days. 

Excess items in your store inventory will increase storage fees. Manage your shipments, and don’t ship all items from your warehouse to a fulfillment center, as this will lower your IPI score.

How to control store inventory?

There are so many ways to control or manage your store inventory, so let’s check;

Perpetual inventory system:

A Perpetual Inventory System instantly records every purchase and sale of store inventory in real time through inventory management software.

 The continuous inventory system provides a detailed picture of stock levels as incoming raw materials and outgoing products are automatically updated. 

Just-in-time inventory:

This method aims to minimize the cost of transportation for storing products in the store.

Business owners may reduce excess commodity inventories due to incorrect demand forecasts or other unforeseen reasons

ABC analysis:

ABC Analysis is one of store inventory management techniques that categorizes retail inventory products into three categories based on their importance.

A-Category products are the most valuable products for the company, generating the greatest profit but with low sales rates. 

  • A is the most valuable good that helps generate the most profit.
  • B is defined as those products that are not the most valuable but also not the least valuable. 
  • C defines the least valuable goods which generate a steady and small profit. 

Economic Order Quantity:

Economic order quantity refers to the amount of inventory a company must purchase to reduce inventory costs, including transportation, ordering, and out-of-stock costs.

EOQ determines the right number of products needed for production at any given time.

The EOQ formula:

EOQ = √(2DK / H)


D defines as orders costs

K defines it as the demand rate

H defines it as holding costs

First in, first out:

It’s a good way to keep track of your reorder point and avoid the dead stock problem.

Even if you don’t sell perishable goods, it can make sense to use the FIFO method. If only to ensure that the packaging is always in good condition and up to date.

For example, Starbucks uses this method to keep its products fresh. The FIFO technology works for you when you have a well-organized warehouse.

Here you can go for a store inventory control software that reduces human warehouse errors through its automation options and barcode scanner. 

Last in, first out:

This technique means that the resources obtained last are sold first. The reason for using this method is the price. 

When prices go up, the inventory you bought last will cost more. Selling these products makes less profit and, therefore, less taxable income. 

Radio Frequency Identification:

RFID enables the company to track products as they move through the supply chain.

Radio waves allow products to be located using a tag and a reader. The tag is a small chip that makes it easy to install and lightweight.

To send the products to the retailer you can use these tags for the truck or pallet. It emits radio signals to read the collects. 

Final Words:

Remember, store inventory management is a complex and dynamic process, and the best practices may vary depending on the nature of your business.

If you are a new seller at Amazon, we suggest you start by sending fewer quantities at first. And if you run a larger business at Amazon, it will be better to calculate how many inventories you need to fulfill the customer’s needs. 

The above store inventory for amazon sellers methods not only help you to manage your inventory but also help you reduce costs and build a strong customer relationship.


Questions About
Store Inventory Management

How can I determine the optimal inventory levels for my store?

Determining optimal levels of your retail store inventory involves analyzing historical sales data, monitoring market trends, considering lead times from suppliers, and employing inventory management techniques such as economic order quantity (EOQ) and just-in-time (JIT) inventory. It’s also important to strike a balance between stock availability and holding costs.

How can I handle seasonal or fluctuating demand?

For seasonal or fluctuating demand, accurate demand forecasting is crucial. Analyze historical data, consider market trends, collaborate with suppliers, and adjust the store inventory levels accordingly.

 Additionally, explore strategies like drop-shipping, consignment arrangements, or partnering with third-party logistics providers like AMZ Prep to manage temporary demand surges.

How can I prevent stockouts and overstock situations?

To prevent stockouts, regularly monitor stores and inventory levels, set appropriate reorder points based on demand patterns, establish good relationships with suppliers, and consider implementing a just-in-time (JIT) inventory approach. 

To avoid overstock situations, analyze sales data, adjust reorder quantities, and identify slow-moving products for potential markdowns or promotions.

How can I optimize inventory turnover?

Store Inventory turnover is a measure of how quickly a store sells its inventory within a specific period.

 To optimize the retail store inventory turnover, focus on improving sales velocity, reducing lead times, identifying and addressing bottlenecks in the supply chain, and ensuring a good product mix that aligns with customer demand.

How can I track inventory accurately?

Accurate inventory tracking can be achieved through various methods, such as manual stock counts, barcode or RFID scanning, point-of-sale (POS) integration, and utilizing inventory management software or systems. Automated systems help reduce human error and provide real-time visibility into stock levels.

How can I handle inventory storage fees on Amazon?

Amazon charges fees for store inventory in their fulfillment centers, known as inventory storage fees. To manage these fees effectively, analyze your inventory turnover rates, adjust inventory levels accordingly, and consider utilizing Amazon’s Inventory Performance Index (IPI) to optimize your store inventory. Avoid holding excessive inventory that incurs unnecessary fees.

What is FBA (Fulfillment by Amazon) inventory management?

In FBA inventory management Amazon provides store inventory for amazon sellers. Amazon handles storage, packaging, shipping, and customer service. FBA inventory management involves monitoring and replenishing stock levels in Amazon’s warehouses, ensuring timely deliveries, and optimizing inventory turnover.

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