A Wholesaler’s Guide to Amazon Inventory Forecasting Strategies

Amazon inventory forecasting is the process of predicting how much inventory you’ll need based on your business’ sales data. It’s a crucial part of building a successful Amazon FBA business as a wholesaler. Proper Amazon forecasting will help you avoid running out of stock when you need products the most. It also ensures you don’t buy too much.

But how can you forecast inventory needs as a business owner? If you’re new to selling on Amazon FBA, you might need to do a little more research than others. But no matter where your business is at, you can use some strategies and tools to pretty accurately predict inventory demands. 

Why Amazon Inventory Forecasting is Essential

Forecasting takes the guesswork out of ordering wholesale merchandise from your supplier. You can make informed orders for products that your target audiences are looking for ahead of time. You can also avoid sinking money into products that just aren’t worth it. 

Without proper inventory management, you increase your risk of running into financial issues that could hurt your business, including:

• Under-ordering. Too little inventory means you won’t be able to meet customer demand, which means lost sales.
• Over-ordering. On the flip side, too much inventory drains money you could invest elsewhere. 
• Extra costs. Having excess inventory at Amazon’s warehouses can leave you vulnerable to long-term storage fees. These can really add up over time.
• Lowered Amazon rankings. If your items are frequently out of stock, Amazon’s algorithm may rank your listings lower than usual. This makes it harder to sell new products down the line.

How to Forecast Amazon Inventory: The Basics

To properly forecast your Amazon FBA inventory, you’ll need to familiarize yourself with a few key metrics:

• Past product sales data and performance
• Wholesale supplier shipping and lead timelines
• Current consumer trends
• Potential jumps or changes in the market (such as an approaching holiday)

For products with a steady sales flow, use past data to figure out how many units you sell each day, week, or month. Using these figures and information about upcoming trends, you can guess how much inventory you should sell in a 30-, 60-, or 90-day period.

Don’t have sales data to lean on? You can still get some idea of how often a product sells by looking at the estimated monthly sales volume of similar options on the market.

Next, figure out what percentage of existing sales you think you could potentially gain. This largely depends on how established your business is. Experiment with different values to see what feels realistic for your goals and fits your budget.

Inventory Forecasting Tools for Amazon FBA Sellers

Navigating all that data and trying to find the values you need for calculations can get confusing. We recommend investing in some sort of Amazon FBA inventory management tool or software to help you out. 

These tools work by tracking your sales data, analyzing market trends, and compiling everything together into actionable steps you can take moving forward. Here are some recommendations to help you get started:

• Amazon Forecast: This is one of Amazon’s Web Services and is designed to use machine learning (ML) and business metric analysis to help you forecast inventory needs. Access to the AWS Free Tier allows you to try the program for free. You may need to pay for full or extended use. 
• Jungle Scout: Some paid plans from Jungle Scout give you access to an Amazon Inventory Management tool that brings all the information you need to one place.
• SoStocked: This is a dedicated Amazon inventory management software created for sellers of all experience levels.

Put Inventory Forecasting to Use With Top Products

Once you get the hang of managing your Amazon FBA inventory, you’ll be ready to take your business to new heights. Working with a trustworthy supplier is a key part of ensuring you have the products you want when you need them. 

At Nex Deal Inc., we do the hard work of finding trendy and exciting new products so that you don’t have to. Our rotating stock of daily wholesale deals is always being updated with the hottest picks that are sure to help you drive sales. Plus, we’ll take care of shipping your products right to Amazon’s warehouse. 

Let our team help you focus on what matters most: managing your business and figuring out how to help it grow. Check out our daily wholesale merchandise deals today, or download a complete list of our inventory to find your perfect products.