About SoStocked
Born out of a genuine need within the e-commerce community, SoStocked is an Amazon inventory management software designed to provide sellers with the clarity and control they need to avoid stockouts, minimize overstock, and ultimately boost profitability. Now part of the Carbon6 ecosystem, SoStocked offers a comprehensive suite of tools for forecasting, restock management, and gaining crucial insights into the financial implications of inventory decisions. Chelsea’s vision was to create a solution that goes beyond basic inventory tracking, empowering sellers to make proactive and informed decisions that directly impact their bottom line.
Key Insights: Navigating the Inventory Maze
Danan and Chelsea explored several crucial aspects of inventory management, revealing key insights that every e-commerce seller should heed:
- The Perils of Marketing in a Vacuum: One of the most common and costly mistakes is a disconnect between marketing efforts and inventory management. When marketing teams launch campaigns without informing the logistics side, it can lead to unexpected surges in demand and devastating stockouts. Clear communication and collaboration between these departments are paramount.
- Beyond Basic Forecasting: Relying solely on Amazon’s data for forecasting can be a recipe for disaster, especially for sellers with longer lead times. Chelsea emphasizes the need to adjust Amazon’s data by accounting for outliers like temporary deals, filtering out stockout periods, and layering on planned marketing activities. Accurate forecasting requires a holistic view of past performance and future plans.
- The Importance of Buffer Stock and Min/Max Restocking: To avoid Amazon’s low inventory level fees and ranking penalties, maintaining a buffer stock (Chelsea recommends around 35 days) is crucial. Implementing a min/max restocking strategy, which sets a range for your inventory levels, helps prevent both stockouts and excessive inventory that can lead to aged inventory fees and long-term storage costs.
- Inventory-Minded Marketing: A Proactive Approach: Chelsea coined this term to highlight the essential two-way street between marketing and inventory. Marketing should inform inventory of upcoming campaigns, and inventory should proactively provide marketing with data on stockout risks, slow-moving items, and aged inventory. This collaboration allows marketing to be not just revenue-focused but also profit-conscious.
- The Direct Link Between Inventory Management and Profit: Inventory decisions have a profound impact on profitability. From the initial product sizing (which affects shipping costs due to dimensional weight) to avoiding stockouts and minimizing storage fees, every aspect of inventory management plays a role. Holding excess inventory can quickly erode profits through aged inventory fees and long-term storage costs, sometimes even exceeding the product’s manufacturing and shipping expenses.
- Unlocking Scalability Through Inventory Optimization: Scaling isn’t just about marketing and launching more products; it’s fundamentally tied to profit and cash flow, both of which are heavily influenced by inventory management. Strategies like resizing products, optimizing tariffs, negotiating favorable payment terms with suppliers, and efficiently moving inventory are key levers for sustainable growth.
- The Power of Payment Terms: Negotiating longer payment terms with suppliers can significantly improve cash flow. Chelsea suggests strategies like paying a smaller upfront deposit and the remaining balance upon shipment, potentially aligning payments more closely with when you receive revenue from sales.
- Forecasting Future Profitability: Looking beyond current profit metrics to predict future profitability, considering factors like upcoming storage fees and aged inventory, is crucial for strategic planning and making informed decisions about product lifecycles. Identifying and addressing products with consistently low profit margins can be vital for long-term business health and even the ability to successfully exit.
Services and Software Discussed
- SoStocked: A comprehensive Amazon inventory management software (now part of Carbon6) designed to help sellers forecast accurately, manage restocks efficiently, and gain insights into the financial implications of their inventory.
- Amazon Seller Central Reports: Specifically, the FBA Inventory Report provides valuable data on aged inventory that sellers can use to inform their marketing and inventory management strategies.
- Carbon6 Ecosystem: The broader suite of tools and resources now including SoStocked, aimed at empowering e-commerce sellers.
- Skewdrop: A third-party logistics (3PL) provider with warehouses in China that can assist with inventory storage and logistics, potentially beneficial for sellers who need more flexible inventory holding solutions.
Conclusion: Take Control of Your Inventory, Control Your Growth
Chelsea Cohen’s expertise shines a light on the critical role of inventory management in the success of any e-commerce business. It’s not just about having enough products in stock; it’s about strategic planning, proactive communication, and a deep understanding of how inventory decisions directly impact your profitability and scalability. By implementing the best practices and leveraging the right tools, sellers can move from simply reacting to inventory challenges to proactively managing their stock for maximum growth and profitability.
How to Contact the Guest
To learn more about optimizing your Amazon inventory and explore the tools and resources discussed in this episode, you can connect with Chelsea Cohen and access free resources here:
- SoStocked Website: sostock.com/ (You can find the tools in the SoStock demo)
- Chelsea’s Linktree (including socials and free tools): sostock.com/connect
- Carbon6 Website: carbon6.io/ (For information on their free profit audit)
Don’t let inventory management be an afterthought in your e-commerce strategy. Embrace the insights shared by Chelsea, take action, and watch your business grow more profitably!