On Amazon Vendor Central, shortages can happen for a whole host of reasons: incorrect catalog data, misplaced packaging, receipt errors — the list goes on.
No matter the reason, shortages can cause quite the headache for Amazon vendors, and when they are a result of chargebacks, they can be costly, as well.
While vendors can’t eliminate shortages altogether, they can take steps to minimize supply chain errors and take better control over their inventory management processes. Here are five practical strategies for minimizing shortages on Amazon Vendor Central.
Catalog maintenance is inventory management 101. To maximize both operational efficiency and speed to market, vendors should meticulously maintain their catalogs to ensure they have the most accurate and up-to-date product data.
Consistently updating your Vendor Central product catalog can not only help you ensure your purchase order and inventory shipments align, but can also boost your Amazon relationship by giving them the most accurate and useful product information available which will decrease errors in the long run, saving both you and Amazon time and money. Additionally, a well-maintained catalog can also decrease price discrepancies by aligning product prices accurately with Amazon’s system.
Some solutions, like SoStocked, even enable Amazon vendors and sellers to automate their catalog management and avoid inventory hiccups that cost time and money.
Precise invoicing is vital for maintaining a smooth supply chain and avoiding shortages. The invoice is the main quality control lever of Amazon Vendor Central, enabling the marketplace behemoth to verify the accuracy between the purchase order and the items they receive.
When sending invoices to Amazon, ensure you only bill for items that have been accepted and shipped as per your purchase order. Also, avoid taking invoices at face value. Instead, carefully review each invoice to prevent duplication — a common, if overlooked, inventory error.
Clear and properly placed labels significantly impact the accuracy of inventory tracking during the receiving process.
When Amazon receives a blemished or scratched label, they’re often unable to scan the inventory and more likely to claim a shortage. Some level of damage during transportation is inevitable, but vendors can decrease the chance of earning a shortage claim by shipping items with clear, accurate, and crease-free labels.
The leading cause of Amazon chargebacks across vendors? PO-on-time-accuracy. This chargeback has three subtypes: Not on Time, Down Confirmed, and Not Filled.
Being on-time-compliant is crucial not only for strong inventory management, but also for fostering a successful and long-lasting partnership with Amazon. Poor adherence to delivery schedules and order quantities can disrupt Amazon's receiving process and increase the risk of a shortage.
To consistently meet Amazon’s expectations, establish efficient supply chain processes that prioritize on-time delivery. And if you deliver on time and still receive a chargeback, use a dispute management service like chargeguard to handle the claim and recover your profits. Chargeguard also offers a supply chain analysis that identifies the root causes of any shipping or process delays to minimize deductions and ensure you deliver on time.
When Amazon receives your inventory via Vendor Central, they break down each purchase order into sellable units. Using standard case packs can significantly streamline this process.
In fact, adhering to Amazon’s packaging requirements and standardizing your case packs can enhance the efficiency of the entire receiving process and reduce errors that can lead to shortages.
As an Amazon vendor, there are plenty of things within the supply chain that are simply out of your control — but not everything. Keeping your operations in top shape by maintaining an up-to-date catalog, creating accurate invoices, and streamlining your delivery processes to be on time every single time are all ways to effectively manage your inventory and reduce shortages.
Remember, proactive measures yield positive results. Don’t wait until you receive a chargeback to address your inventory management. Take initiative now to implement the proactive strategies that can save money and help you build a more prosperous relationship with Amazon.
Ready to take control of your inventory management? Manage inventory with intelligence with SoStocked, an automated solution that gives you dialed-in forecasting and optimizes your packaging and shipping to maximize profits.
And don’t worry if a chargeback or shortage happens. By using a solution like chargeguard, you can recover historical chargebacks, shortages, and overbillings to increase your overall profitability.
Check out Carbon6’s suite of seller solutions for tools and resources for scaling efficiently and boosting profits.