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Advanced Amazon Operations & Fulfillment Strategy

For Amazon vendors and sellers, operational management continues to be critical. Learn how you can accurately predict, forecast, procure, and fulfill on Amazon to optimize your operational strategy and balance your supply and demand.

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Advanced Amazon Operations & Fulfillment Strategy

  1. 1. 2021 Amazon & Retail Media Virtual Summit 2021 Amazon Advertising Strategies 10:00 – 10:45am PST | 1:00 – 1:45pm EST Unpacking Amazon’s A9 Algorithm 10:50 – 11:20am PST | 1:50 – 2:20pm EST Amazon Creative that Converts 11:25 – 11:55pm PST | 2:25 – 2:55pm EST Advanced Amazon Operations 12:00 – 12:30pm PST | 2:00 – 2:30pm EST The Emergence of Retail Media 10:00 – 10:45am PST | 1:00 – 1:45pm EST What’s Next in Walmart 10:50 – 11:20am PST | 1:50 – 2:20pm EST Win Big on Instacart 11:25 – 11:55pm PST | 2:25 – 2:55pm EST DAY 1 - WEDNESDAY, FEBRUARY 24TH DAY 2 - THURSDAY, FEBRUARY 25TH
  2. 2. Amazon Operations & Fulfillment Experts-Led Advanced Strategy
  3. 3. Today’s Logistics Analicia Santaella Partner Marketing Manager Recording & slides will be sent by end of week 01 Submit questions for live Q&A 04 03 Download relevant resources Log back anytime with same link 02 02 Join our poll questions 05
  4. 4. Some of our clients Our Recognition Tinuiti is the largest independent performance marketing agency across the triopoly.
  5. 5. Our Speakers MARK RUSSO Senior Specialist, Marketplace Operations CHAD RUBIN CEO/Co-Founder
  6. 6. Agenda Layout ● Inventory & Fulfillment Best Practices ● Inventory Performance Index (“IPI”) Score ● Fees & Chargebacks ● Pro-Tips for Amazon Ops ● Live Q&A 6
  7. 7. Poll Question What is your biggest Amazon Operations challenge? ● Forecasting ● Chargebacks ● Inventory management ● Order fulfillment ● Stock-outs
  8. 8. Inventory & Fulfillment 8
  9. 9. 9 Inventory and Fulfillment Best Practices Vendors should be proactive in managing their inventory ● Direct Fulfillment: Allows Vendors to ship products from their warehouses directly to Amazon’s customers. Contact Vendor Support via case to request Direct Fulfillment (“DF”) access. Vendors must create a DF catalog and update DF inventory regularly (every 24 hours is recommended). ● Born to Run: (Vendor Initiated Orders) Allows Vendors to request orders for a product. Amazon will review the submission and - if approved - will buy up to that amount. Units that do not sell within the sell-through period are subject to returns or retention fees. Vendors can use this feature to increase inventory position during new product launches or marketing campaigns. For further questions, open a case via Contact Us and select Born To Run as the Issue Type. Sellers must be mindful of FBA Restock Limits and evaluate FBM feasibility ● FBM: Amazon’s continued inventory constraints have once again resulted in a greater emphasis on Sellers having the capability to fulfill orders themselves. ● Restock Limits: Amazon re-established FBA Restock Limits in an attempt to more efficiently manage their own inventory - the result is a new challenge for Sellers to manage. Vendor (1P) Seller (3P)
  10. 10. 10 Restock Inventory Page: Limited Restock Tag and Shipment Quantity Limits ● Maximum inventory level represents the maximum inventory you can maintain at Amazon. You will not be able to create a shipment that increases your inventory levels beyond this threshold. Maximum inventory levels are calculated using historical demand for your products. ● Utilization represents your current inventory at Amazon, which counts against your maximum inventory level and helps determine your maximum shipment quantity. It accounts for your incoming shipments, inventory pending removals, and inventory reserved for orders pending shipment. Sendsmaller, more frequent FBA shipments of high-velocity ASINs
  11. 11. 11 Inventory Performance Index (“IPI”) ● Excess inventory percentage: the result of carrying too much inventory. This decreases profitability due to storage fees and holding costs and therefore you should be sure that you’re tracking your excess inventory percentage regularly in order to maximize profitability. ● FBA sell-through rate: calculated by taking your units sold and shipped over the past 90 days and dividing that number by the average number of units available at fulfillment centers during that time period. You can improve sell-through by creating or adjusting your advertising strategy, by creating a sale, by auditing the product detail page, or by removing some of your inventory. ● Stranded Inventory percentage: stranded Inventory is inventory that is not available for purchase due to a listing problem that has resulted in inventory without an associated active offer. Amazon provides a “Fix listing” option which goes on to detail the exact reason that your inventory has been stranded and provides you with the steps to resolve the issue. ● FBA in-stock rate: the percentage of time your replenishable FBA ASINs have been in stock during the previous 30 days, weighted by the number of units sold for each SKU in the prior 60 days. When an ASIN is out of stock you should flag that ASIN as non-replenishable in the Restock tool. Excess inventory Sell-through Stranded inventory In-stock inventory
  12. 12. Fees & Chargebacks 12
  13. 13. 13 Fees + Costs ● Professional Seller Account: $39.99/month ● Referral Fees: 8% – 45% depending on your category (mostly 15%) ● Closing Fee ● Minimum Referral Fee ● Fulfillment Fees ● Storage Fees ● Overage Fees ● Long-term Storage Fees (LTSF) ● Removal Order Fees ● High-Volume Listing Fee FEES ● Shipping Inventory to Amazon ● Returns ● Advertising on an ASIN level ● Inventory Performance Unplanned Service Fees COSTS C
  14. 14. 14 Chargeback Analysis Where do we find them? ● Go to Vendor Central > Reports > Operational Performance ● Filter by date, issue, status ● Export data into spreadsheet for internal use ● Problems with purchase orders ● Problems with transportation process ● Problems with the receive process Why are we getting them? How do we prevent them? How do we dispute them? ● Understand all of the requirements & share with internal teams ● Assign team to monitor the operational performance dashboard ● Troubleshoot root causes & make changes to processes or catalog ● Vendors have 30 days from notification date to dispute a chargeback ● Provide as much detail & documentation, as possible ● You may only dispute each chargeback twice
  15. 15. Pro-Tips for Amazon Ops 15
  16. 16. It’s nice to meet you I help direct-to-consumer brands and marketplace sellers manage their multichannel operations. CHAD RUBIN | CEO, CO-FOUNDER
  17. 17. B2C MKPL POS B2B 3PL ACCT WMS FBA O R D E R M A N A G E M E N T S H I P P I N G P U R C H A S I N G I N V E N T O R Y Sales Channels Back-office systems
  18. 18. Skubana helps today’s companies deliver on their promises OUR CUSTOMERS
  19. 19. .Prime or Bust. .TIP #1. FBA is key to allowing int’l sellers to compete with domestic sellers. ☑ 71% of Chinese sellers are using Fulfillment by Amazon (FBA) ☑ More than 85% of the top Amazon sellers offer Prime shipping, up from 56% three years ago.
  20. 20. Avoid. Unscalable. Cost. Structures. ☑ Revenue declined but 3PLs/operational costs remained constant. ☑ USPS went zonal -- it had to mature to stay profitable! Invest in Inverted Cost Structures .TIP #2.
  21. 21. One Warehouse Is No Longer Sufficient. .TIP #3. Identify ways to lower fulfillment costs. ☑ Know where your customers are ordering from. ☑ Transfer inventory closer to those areas. ☑ Leverage Section 321 and importing directly to Mexican 3PLs. ☑ Pick-pack and ship directly to your US customers from abroad.
  22. 22. Constantly re-invest in innovative products to protect yourself from copycats. ☑ PL products are just commodities with branding attached to it ☑ Lower sales velocity = more warehouse fees and deadstock. ☑ Amazon is paid to sell you stuff, not store it. ☑ Products need to be highly differentiated, or there needs to be some scarcity of supply. Going JUST D2C is no longer sufficient. .TIP #4.
  23. 23. You Must Be a Systems Thinker .TIP #5. IF...Purchasing is using one app, & ops using another, you have a problem. Great scalable brands require a common language so everyone’s on the same page. ☑ Operators focused on growth without resiliency will miss out. ☑ Operational infrastructure must adapt automatically. ☑ Selling on a single channel is no longer viable. Diversify. O R D E R M A N A G E M E N T S H I P P I N G P U R C H A S I N G I N V E N T O R Y
  24. 24. UNIFY FOR EXPERIENCE BE DIRECT TO EVERYWHERE® De-risk sales channels by creating consistent brand experiences everywhere your customers live and shop.
  25. 25. Test the market with Virtual SKUs, US & Abroad ☑ Double or triple your total SKU count ☑ Create a bundle with FBM and fulfill it with FBA ☑ Offer an item in bundles and do the bundle breakdown using your FBA stock to fulfill that bundle or kit ☑ Prioritize Amazon DE over Amazon UK .Explode Your SKU Count. .TIP #6.
  26. 26. *10 Brands Will Be Selected at Random Email me with subject, “I’M IN” chad@skubana.com FREE Bonus Offer Operations Strategy Audit CHAD RUBIN | FOUNDER & AND CEO
  27. 27. Schedule Your Consultation with an Amazon Expert
  28. 28. Q&A
  29. 29. Thank you!
  30. 30. 2021 Amazon & Retail Media Virtual Summit 2021 Amazon Advertising Strategies 10:00 – 10:45am PST | 1:00 – 1:45pm EST DAY 1 - WEDNESDAY, FEBRUARY 24TH Unpacking Amazon’s A9 Algorithm 10:50 – 11:20am PST | 1:50 – 2:20pm EST Amazon Creative that Converts 11:25 – 11:55pm PST | 2:25 – 2:55pm EST Advanced Amazon Operations 12:00 – 12:30pm PST | 2:00 – 2:30pm EST The Emergence of Retail Media 10:00 – 10:45am PST | 1:00 – 1:45pm EST DAY 2 - THURSDAY, FEBRUARY 25TH What’s Next in Walmart 10:50 – 11:20am PST | 1:50 – 2:20pm EST Win Big on InstacarT 11:25 – 11:55pm PST | 2:25 – 2:55pm EST

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