By Martin Heubel, Amazon Strategy Consultant at Consulterce
Too many brands focus their teams on the sell-in performance with Amazon.
So they:
- Offer Vendor Managers discounts for bulk orders
- Grant funding based on raised orders from Amazon
- Place excessive born-to-run orders that lead to overstock
The problem is:
Amazon doesn’t operate a storage business.
It operates a fulfilment business.
As a result, Amazon will only order as much inventory as it needs to fulfil customer demand. And in recent months, Amazon has gradually reduced its stock levels to drive even more efficiencies in its fulfilment network.
So by focusing your vendor operation on Amazon’s sell-in performance, you are reversing your Flywheel with the online retailer. Leading to overstocks and a downward spiral in price when Amazon marks down the excess inventory.
The solution to this?
Make sure your teams are focused on the sell-out to customers instead.
You can do that by:
- Optimising your advertising spent
- Defining an annual marketing calendar with AVS
- Increasing customer retention via Subscribe & Save
- Linking investments to the execution of price promotions
- Etc.
Remember: Amazon won’t do the heavy lifting of selling your inventory for you. So you must adapt your sales strategy accordingly.
For further information and support, contact Martin Heubel here
