Amazon Inventory Health Report
In a previous post I discussed keeping track of the profit and margin you receive on each item you sell. This week I want to talk about knowing how well each item is selling. I.e., you may be making a lot per sale on a particular item, but if you only sell one item per year it isn’t very interesting.
Since I use the Fulfillment By Amazon (FBA) program extensively, I’m going to discuss keeping track of inventory health using an FBA report in this post. If you don’t use FBA, or use other fulfillment methods as well, you can do the same things, but the mechanics will be different.
Amazon provides an Inventory Health report for your FBA-fulfilled items: Reports => Fulfillment => Inventory Health => Download. It’s organized by both SKU and ASIN, so you need to have a spreadsheet that maps either of these to the product manufacturer and product name.
The fields that I find most interesting without further processing are: Sellable Quantity, Inventory Age 365 Plus Days, and Units Shipped Last 365 Days.
Obviously, anything that’s been sitting in inventory for 365 plus days is a problem (I actually look at anything that’s been sitting in inventory more than 90 days, which is also available in the report but requires a little processing). If something has been sitting in inventory for a long time you need to either mark its price down so it will sell and you can use whatever money is left on a better-selling item, or have it destroyed so you can stop paying inventory fees on it.
Units Shipped Last 365 Days is useful because it tells you what your best sellers are. This, in conjunction with your profit per sale, gives you a pretty clear picture of where your profits are coming from.
Finally, the ratio of (Units Shipped Last 365 Days / Sellable Quantity) tells you what you need to make sure you re-order from the manufacturer soon. Some items are seasonal, and sales around Christmas typically far exceed those of the rest of the year, so you need to apply some judgment as well.
I updated my list of what to sell on Amazon for January. It gets updated about once per month, so check back regularly.