Amazon

Steffi Greuel 7 Minutes

Managing Your Amazon Inventory Management: Accurate and Efficient Processes for Your Business

For retailers, constantly meeting these turnaround requirements presents a daily challenge for inventory management. Within a very short timeframe, the product has to be located in the warehouse, picked, packed, and shipped, making it difficult for companies to keep an eye on their stock. If you unintentionally sell something that is no longer available, you risk dissatisfied customers and potential damage to your company’s reputation.

In this article, we will show you how you can protect yourself from these problems through automation by integrating your Amazon Marketplace with Microsoft Dynamics.

Take Your Amazon Business to the Next Level

ESYON’s Amazon Marketplace Connector (AMC) automates your business by integrating the flow of goods updates from your Amazon Seller Central with Microsoft Dynamics and paves the way for your company’s continued growth.

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Differences between FBM and FBA

If you are not familiar with the terms FBM and FBA, here is a brief overview.

FBM = Fulfilled by Merchant: The acronym FBM means that merchants offer their products via Amazon Marketplace, but store, pick, pack, and ship the items themselves.

FBA = Fulfilled by Amazon: The acronym FBA means that merchants outsource fulfillment to Amazon. The merchant ships its goods to Amazon where they are stored in Amazon’s warehouse(s). When an item is ordered, it is picked, packed, and shipped by Amazon.

Both FBM and FBA merchants can view all information about their Amazon Marketplace sales activity, including changes to inventory, in Amazon Seller Central.

Recommended Reading: For more information on FBA vs. FBM, we recommend reading this blog post.

Manual Inventory Management as a Bottleneck

Quite a few e-commerce companies consider Amazon Marketplace to be their most important sales channel, as the platform’s reach can generate a large volume of sales along with the corresponding revenue. That doesn’t mean, however, that Amazon is their only sales channel. To avoid stock shortages, retailers using Amazon’s FBA program need to synchronize the inventory held in Amazon’s warehouse(s) with their inventory management system.

To monitor all incoming and outgoing goods, retailers and manufacturers usually rely on an ERP system (Enterprise Resource Planning) such as Microsoft Dynamics 365. To fully leverage the benefits of an ERP, it needs to be seamlessly integrated with your Amazon Marketplace. Managing your inventory manually is extremely time-intensive, and can quickly create a bottleneck.

In addition to the high overhead costs, manual inventory management can be the source of other problems:

  • Limited Visibility: If manual changes to your inventory mean you are always playing catch-up, it can be difficult to accurately record which items are available and which need to be reordered.
  • Overstock or out-of-stock: Without automated inventory management, it can be difficult to keep stock at the optimal level. You could have too much or too little inventory, resulting in increased storage costs or missed sales opportunities.
  • Manual errors: Manual processes carry a high risk of error. Goods may not be entered properly, orders may go unprocessed or you may ship the wrong items. Automated processes can prevent these errors.
  • Bad customer reviews: Wherever there are errors in the ordering process, dissatisfied customers are not far behind. They often vent their anger in reviews and can thus damage your company’s reputation.

The Benefits of Integrating Amazon Seller Central With Your ERP

Given the problems that can arise from manually processing the movement of goods in your Amazon Marketplace, there are reasons to directly integrate this information into your ERP.

Accurate Inventory Monitoring and Reporting

With a system that integrates changes in your Amazon inventory with your ERP, your stock levels can be monitored in real-time and you will be automatically notified when your Amazon inventory is running low. You will know exactly when you need to reorder which items. Accurate figures are necessary to make business decisions about which products are most profitable and which are tying up capital and increasing storage costs.

Increased Productivity

Automating manual processes by integrating your ERP with Amazon frees up resources that can be used elsewhere, making your company more productive overall.

Improved Customer Experience

With fewer errors and faster ordering processes, automation will positively impact the customer experience. Even though short and smooth shipping processes are expected in e-commerce, customers occasionally reward their positive shopping experience with good reviews.

Scalability

The automation that results from integrating your inventory reports from Amazon Seller Central with your ERP is what makes your business capable of growth and enables you to capitalize on the potential of the online marketplace.

Visibility

Automating your systems gives you an accurate snapshot of your inventory at any point in time. FBA merchants in particular find it difficult to keep accurate records. Real-time synchronization between your ERP and Amazon Seller Central enables real-time inventory management, so you always have an accurate view of your flow of goods.

Amazon Marketplace Connector: More Control over Your Inventory

With ESYON’s Amazon Marketplace Connector, you can seamlessly integrate your Amazon business with Microsoft Dynamics 365 without using middleware and reap the benefits of automated inventory management.  

Reading tip: We recently published a software release with new functions for the Amazon Marketplace Connector. You can read about the new features in this article.

Control Inventory Movements

Our AMC Inventory Movement feature lets you control your inventory at any time, giving you an overview of your company’s stock and providing a deeper understanding of your flow of goods. It updates in real-time so you can spot trends, such as imminent stock shortages, in time to take appropriate action.

Automate Adjustments and Returns

Using our Amazon Marketplace Connector to integrate inventory information from your Amazon Seller Central with your Microsoft Dynamics allows you to automate the import, creation, and posting of adjustment events and returns. This saves valuable time and resources and increases the accuracy and efficiency of your inventory management.

Automating Returns

Return management is also fully automated with our AMC solution. As soon as a customer decides to return a product, our connector receives this information from Seller Central and creates a return order. The item is first considered scrap and is only added back to the inventory after it arrives at the Amazon warehouse and can be resold. Missing or damaged products are not added back into inventory.

Transparency for FBA Merchants

If you outsource your fulfillment using Amazon’s FBA program, the AMC can provide the visibility into the inventory levels in your Amazon Marketplace shop that you need to most efficiently manage your business. When inventory runs low, a reorder notice will appear in your Seller Central. The AMC will import this reorder into our cockpit and create a transfer order for your Microsoft Dynamics 365.

As soon as your goods arrive at Amazon, the stock is posted in your virtual FBA warehouse in Microsoft Dynamics. If the goods are lost or damaged during shipment, partial quantities can also be booked.

FAQs about Amazon Inventory Management

What is Inventory Management?

Inventory management is the planning and control of a company’s stock of goods. It involves the management of inventory from procurement to delivery to the end customer. The goal of inventory management is to maintain inventory at an optimal level to ensure customer satisfaction while minimizing inventory costs.

What are the Challenges of Managing Your Amazon Inventory?  

Selling on Amazon is characterized by a fast-paced and competitive environment. A speedy ordering and delivery process is a given for customers, so the quick receipt of goods doesn’t generate positive reviews. However, if something goes wrong, it is very easy for customers to make their anger public, which can damage a company’s reputation. To make matters worse, the FBA program is very opaque and merchants can quickly lose track of their flow of goods. What is needed are integrated solutions that provide clarity.

How Can I Optimally Manage My Amazon Inventory?

To exploit the full potential of the Amazon Marketplace as a sales channel, many experts recommend automating inventory management through ERP software. An ERP system that is ideally suited for this is Microsoft Dynamics 365. With the Amazon Marketplace Connector from ESYON, you can integrate your Amazon business into the ERP system and monitor and automate numerous inventory management processes.