How to manage Amazon inventory across multiple fulfillment centers

Managing Amazon inventory across multiple fulfillment centers effectively is essential for optimizing shipping times, reducing costs, and ensuring products are always in stock. Amazon’s Fulfillment by Amazon (FBA) service allows sellers to store and ship their products from Amazon’s vast network of fulfillment centers. However, managing inventory across these centers can be challenging, requiring coordination and strategic planning. Here’s how to manage Amazon inventory across multiple fulfillment centers:

1. Understand How Amazon Distributes Inventory
Amazon’s inventory distribution is based on factors like customer demand, proximity, and fulfillment center capacity. When you send inventory to Amazon, the company may divide your stock among different fulfillment centers. Amazon uses its algorithms to decide where the products should be sent to ensure that they are readily available to fulfill customer orders across the country. This distribution helps optimize shipping speed, but it can lead to inventory being spread across several locations.

2. Use the Inventory Performance Dashboard
The Inventory Performance Dashboard (IPD) in Seller Central is a critical tool for managing inventory across multiple fulfillment centers. It provides key metrics and insights into how your inventory is performing. Key metrics include:

Inventory Health: Indicates how well your inventory is selling and whether you’re at risk of excess or stranded inventory.
Stranded Inventory: Products that are not available for sale due to listing issues. These items need to be addressed to avoid lost sales.
Excess Inventory: Too much inventory sitting in Amazon’s warehouses, potentially incurring long-term storage fees.

Use the data from the dashboard to understand inventory movement, avoid overstocking or understocking, and optimize inventory levels across all centers.

3. Monitor and Maintain Inventory Levels
To avoid stockouts or overstocking, continuously monitor your inventory across multiple fulfillment centers. Stockouts lead to missed sales opportunities, while overstocking can result in additional storage fees. Here’s how to manage these levels:

Set Restock Alerts: Use Amazon’s restock recommendations to know when to send more inventory to Amazon. Restock alerts are based on historical sales data and predictive analytics, ensuring you have the right amount of inventory at the right time.
Leverage Forecasting Tools: Use inventory forecasting tools that integrate with Amazon Seller Central to predict future sales trends and adjust your inventory shipments accordingly.
Balance Stock Across Fulfillment Centers: You can manually adjust inventory levels at individual fulfillment centers using the Amazon FBA Inventory Transfer tool. This allows you to move products from one center to another to ensure that stock levels are consistent and demand is met. For example, if one center is low on stock while another has too much, you can transfer inventory to maintain balance.

4. Understand Multi-Channel Fulfillment (MCF)
Multi-Channel Fulfillment (MCF) allows you to fulfill orders from multiple sales channels (not just Amazon) using Amazon’s FBA network. If you’re selling on other platforms like Shopify, eBay, or Walmart, you can still utilize Amazon’s fulfillment centers to handle all your inventory. To manage this effectively, ensure that:

You account for orders from multiple channels when calculating inventory needs.
You are aware of inventory movement in Amazon’s fulfillment centers to prevent stockouts or overstocking on any channel.

5. Use Amazon’s FBA Inventory Management Tools
Amazon provides various tools within Seller Central to help you manage inventory across multiple fulfillment centers. These include:

FBA Shipment Creation Workflow: When creating shipments, Amazon allows you to see which fulfillment centers your inventory will be sent to. You can track shipments and make adjustments as necessary.
FBA Inbound Shipment Dashboard: This dashboard gives you detailed tracking of your inbound shipments, showing where your products are located and how far along they are in the fulfillment process.
Automated Replenishment: If your account is set up correctly, Amazon will automatically replenish inventory based on your sales velocity, ensuring that you are sending products to fulfillment centers at the right time.

6. Optimize Shipping to Fulfillment Centers
To reduce fulfillment costs and improve shipping efficiency, plan your shipments strategically:

Consolidate Shipments: If you’re sending inventory to multiple centers, consider consolidating shipments when possible. Amazon may allow you to send a larger shipment to a single center instead of sending smaller ones to multiple locations.
Follow Amazon’s Guidelines for Shipment Planning: Review Amazon’s FBA shipment guidelines to avoid making mistakes in the process. For example, if you send the wrong quantity of products, Amazon may ask you to resubmit shipments, which can delay processing times and increase costs.
Consider Using Amazon Partnered Carrier Program: This program offers discounted rates for shipping to Amazon fulfillment centers. It helps you save on shipping costs and ensures your inventory is handled efficiently.

7. Manage Inventory Storage Fees
Amazon charges two types of storage fees:

Monthly Storage Fees: These are charged for storing products in Amazon’s warehouses. The fees are based on the volume of your products (measured in cubic feet).
Long-Term Storage Fees: These fees are charged for inventory that has been stored in Amazon’s fulfillment centers for over 365 days.

To avoid excess inventory and long-term storage fees:

Regularly review your inventory performance and identify slow-moving products.
Remove or liquidate excess stock from Amazon fulfillment centers by using the Amazon FBA Removal feature.
Rotate your inventory by promoting slower-moving items or bundling them with popular products to improve sales.

8. Utilize the Restock Inventory Tool
Amazon’s Restock Inventory Tool helps sellers optimize their inventory levels by providing restock recommendations based on sales history, lead time, and other data. This tool is especially useful for managing multiple fulfillment centers, as it provides a clear overview of the amount of stock needed at each center. You can use this tool to:

Restock products before they run out.
Make adjustments to your stock levels across different fulfillment centers to prevent stockouts in one location while overstocking in another.

9. Automate Inventory Management with Third-Party Tools
Many third-party software solutions can help automate the management of inventory across multiple Amazon fulfillment centers. These tools integrate with Amazon Seller Central and provide features such as:

Automated inventory tracking across all fulfillment centers.
Alerts for low stock levels.
Advanced reporting on sales velocity and inventory forecasts.
Integration with other sales platforms for multi-channel inventory management.

Tools like Restock Pro, Sellbrite, and Skubana can save time and improve accuracy in managing inventory across Amazon’s fulfillment network.

10. Regularly Review FBA Fees and Policies
Stay informed about changes to Amazon’s FBA fees, policies, and processes. Amazon periodically adjusts storage fees, fulfillment costs, and inventory management guidelines. By staying up to date, you can optimize your operations and avoid unexpected charges.

Conclusion
Managing inventory across multiple Amazon fulfillment centers requires strategic planning, constant monitoring, and effective use of Amazon’s tools. By utilizing Amazon’s inventory management tools, monitoring stock levels, planning shipments strategically, and optimizing your inventory storage, you can ensure your products are well-stocked, reduce costs, and improve your sales performance. Implementing these practices will help you achieve efficient inventory management and deliver a better customer experience.