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How to Successfully Forecast on Amazon - Recording

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Success on Amazon and across Retail Media platforms requires more expertise than ever before: full-funnel metrics, a holistic understanding of your audience 👨, not to mention a nimble operations strategy 🎯.

We teamed up with Tinuiti and some of the leading marketplace experts for a two-day virtual conference, 2022 Amazon & Retail Media Virtual Summit to explore and analyze the current landscape, trends 📊, and future of retail media 📣. Our very own, Grace O' Hara covered every aspect of Amazon forecasting, from demand planning 🤔 to identifying challenges, to redefining strategies for more increased accuracy 📊.

How To Successfuly Forecast On Amazon_play

Transcript

Kerry Mallett:

Going to get started with our last session of the day of, How To Successfully Forecast On Amazon, Even During Year Three Of Ecommerce Disruptions. It is a little crazy that we are coming on to year three. So we are really excited to end the day today partnering with Skubana, a great partner of ours, and having Grace join, as a speaker from Skubana as well. So if you are newly joining, I'm gonna go through some logistics. If you've been with us during the day today, this is going to be old hat. And so the first is, the question on everyone's minds, the recording and slides will be in your inbox by Friday. So if you are not able to catch everything today, or if you are not able to join tomorrow for part of the day, no worries, all of that will be in your inbox come Friday. Also, you can log back in anytime with that same link that's been in your inbox and in our dashboard to the right of your screen, all the way to the right, you'll see a handouts drop down, make sure to download all of our handouts in there from us and our partners. We have some of our 2022 Marketing Guides in there as well. Also, some of you all have done already. You can join our chat, submit questions for our live Q and A. We'd love to hear from you all, too, not only where you're tuning in from, but what is the weather where you're tuning in from? And make me jealous, I am in Philadelphia and it is about 25 degrees today, but it will be 60 degrees tomorrow, which I'm looking forward to. And then you can also join our poll questions, which will be live in just a moment, including if you are interested in talking with our teams after about how we can help scale and grow your Amazon business, we would love to do so. And so those are live right now. And so we'd love to be able to hear from you. I'll also introduce myself, my name is Kerry Mallett, I'm the Senior Content Specialist for webinars here at Tinuiti and I'll be hosting our summit today. So a little bit about Tinuiti. Here at Tinuiti we've mastered the media that matters most. We are the largest independent performance marketing firm across streaming TV and the triopoly of Google, Facebook, and Amazon. At Tinuiti we understand that success requires both strategy and channel specialization. That approach wins us awards and recognition across the industry, such as the American Business TV Awards and the Shorty Awards, and allows us to grow some amazing clients like those that you see here. All right, I'm gonna turn it over to Helene and Grace to introduce themselves.

Helene Pinkerton:

Oh, hi. I'm Helene Pinkerton, I'm a Senior Account Manager for Tinuiti, managing Amazon sellers and vendors for the Softline org. I've been with Tinuiti Special Retail Group for two and a half years, and prior to that, I was at Amazon for almost five years in vendor and sale management roles.

Grace O’ Hara:

Hi everyone. My name is Grace O'Hara. I've been working in Sales Development at Skubana for the last eight months or so, prior to that was working as the Executive Assistant to our founder, Chad Rubin for two years. My day to day consists of working with brands, retailers, resellers, mainly learning about their business operations and just steering them in the right direction with the highest ROI when it comes to their operations management system and overall text back.

Kerry Mallett:

Awesome. We are so excited to have you both here today and talking all things Amazon forecasting and fulfillment. So, I'm gonna walk through our agenda. We'll be talking, what are those current challenges and our recommendations on how to navigate forecasting and fulfillment, then the tools to help you succeed in order to do so. And then finally, Amazon and beyond. What does that look like with omnichannel expansion? And then our Q and A with our speakers. But first we wanna hear from you all. And so the poll is live right now. So again, you can navigate over on the dashboard just to the right of the chat. What is your biggest challenge with your Amazon business right now? Would you say it's accurately forecasting? Is it managing inventory? Is it fulfillment challenges in general? Or perhaps if it is something else that's not included on our list, you can let us know via the chat. All right. And looking like fairly split between our audience right now of forecasting inventory and fulfillment challenges in general. And then we've got some in the chat saying, Sarah in the chat, saying profitability the biggest challenge right now. So all fairly even. Obtaining UPC codes, Charlotte says. Awesome, well, we'll be diving into these major areas during the session today. So I will go off camera and hand it over to Helene and Grace.

Helene Pinkerton:

All right, all right. Let's dive into Amazon inventory and management forecasting. Okay. Next slide. Whether you're selling on Amazon or through other channels, your inventory and forecasting strategies, are key to running successful business. For the last two years, you were most likely impacted by COVID shutdowns, staffing shortages, raw material shortages and shipping and receiving delays. For 2022 we're still facing raw materials and production cost increases, production challenges, staffing shortages, shipping delays, and capacity constraints at Amazon. Next slide, please. It is key to have an inventory strategy that will position your business for success on Amazon. We recommend to forecast your inventory needs a year in advance by channel. You should reserve inventory for Amazon, specifically. You should focus your efforts on top sellers and ensure always in-stock at Amazon strategy. You should review sales velocity and refocus quarterly, or more often if needed. You should also promote or re-price slow sellers and stop replenishment for those ASINs and PO to drop ship or FPM fulfillment. Next slide please. Vendor Central. So if you're on the vendor side, several factors will impact demand and thus Amazon forecasting in ordering. Traffic. Whether organic or driven by plain marketing, traffic to your pages will impact Amazon ordering system, even if the customer does not convert. Seasonality. Seasonality and peak traffic times like Prime Day and Turkey Five will impact customer demand and Amazon ordering levels. Amazon will also adjust the internal forecast based on historical seasonality and peak traffic times. Promotions. When planning promotions, make sure you're targeting sales, where you can support the additional customer demand, as you will see increased traffic and customer conversion. Sales Performance. Sales velocity has obviously a direct impact on Amazon forecasting and ultimately where they will issue purchase orders for. Retail Price. Are you winning the buy box? Do you have a lot of sellers on your listing that will impact the retail offer winning the buy box? Your stock availability at Amazon. Are your ASINs in stock at Amazon? Is Amazon ordering enough to cover the customer demand? If not, you can leverage PO to run for ASINs Amazon easily, if they're not buying or under buying. This could be because an item is too new for Amazon to have an accurate forecast, or it could be an item that's been out of stock for a while and the forecast is understated due to decreased customer demand. If you're set up for dropship, you can also cover Amazon's out of stock with your drop ship listings. Your detail page. Easier detail page optimized for certain conversion. Make sure you follow best practices for images, bullet points, keywords, any plus content. Also the cost that you're selling your product to Amazon and Amazon profitability have direct impact on your audit volumes. Amazon profitability is a big factor in the purchasing algorithm. Amazon may even completely stop buying your ASINs if consistently unprofitable. Keeping your distribution channels clean is also key to reduce any Amazon drastic price matching. Are your products available from distributors? Are these distributors fulfilling Amazon on the vendor side? This will impact order volumes, as Amazon is able to buy the same product from different vendors. If your products are available from multiple vendors, your vendor lead time will be of factors. Amazon will favor ordering from vendors with the shortest ELT. Your order tab will also impact, often purchase orders are being issued for your product. So for example, if you have high MOQs or use pallet ordering, this will impact PO frequency. Amazon is an ASIN level forecast. Ensure to review regularly the forecasting inventory plan report under brand analytics to assess your future demand on Amazon. Please note that the weekly forecast in the reports is projected Amazon orders, like for customers and not allow you receive as purchase orders for that week. Next slide, please. PO Management. Amazon replenishment POs runs like clockwork, but seasonalized stock buys aren't uncommon, especially lately with Amazon is trying to secure, inventory up to a year in advance. So things to consider. We will be confirming POs manually via ETI. All consistent is your supply chain. You ship from multiple warehouses. Are you fulfilling yourself or using a free PL? Are you prepaid or collect? Things you must do. Confirm POs within 24 hours. If applicable, make adjustment to confirm POS within 48 hours. Offer 10 days prior to ship date. Ensure back order POs are updated prior to shipping. Do not allow POs to auto-cancel, and make sure to submit warehouse closures dates ahead of time. You will also want to monitor your acceptance and fill rate. Also ensure that you are using the correct availability acknowledgement codes when confirming POs as this will impact your future orders. Your goal, in order to be always in stock at Amazon, should be an acceptance rate of 80% or more, NFL rate of 95% or more. Next slide, please, Seller Central. So as a seller, proper inventory management is even more important, as you will have to manage your pricing strategy and inventory levels at Amazon. You will have to manually generate your own forecast based on historical sales, out of stock, growth rates, seasonality promotions, and marketing efforts and review and adjust on a regular basis. In addition to all the factors impacting inventory on the vendor side, your ability to manage your inventory at Amazon will be directly impacted by your inventory performance index, IPI. Maintaining your IPI score of 50 and above will impact your ability to send your inventory into Amazon. Your IPI is based on how well you keep popular products in stock, maintain healthy inventory levels, and fix listing problems. Top influencing factors are excess inventory. Amazon consider ASINs with units over 90 days of supply as excess inventory, Your sell-through. What is your turn rate? Meaning the number of times your inventory will sell-through annually based on turn inventory and sales rate. Low sell-through and excess inventory not only lower your IPI score, but also may result in increased storage fees. Best practice is to avoid excess inventory and increase the sell-through is increase traffic, either organically or via paid marketing, and promote or re-price items that are aged. Also make sure to action any ASINs under strand inventory in being stock on your top sellers. Last year, we also saw Amazon shift to restock limits at the account level versus the ASIN level. When you're facing restock limits, best practice is to send smaller shipments more often, and focus on your top sellers to avoid out-of-stocks. If you're able to fulfill customer orders from your warehouse, you should also create FBM listings to continue capturing customer demand. When sending inventory into Amazon you should also leverage Amazon shipping as an inventory will be viable while in transit. Your pricing strategy is also key. As a seller you must manage your own pricing strategy based on your profitability goals. If you have other sales on your listing, we recommend leveraging the automated re-pricing tool to maximize winning the buy box. So again, whether you're a vendor or seller on Amazon, you will need to monitor your sales and fore-looking forecast regularly and adjust your inventory and manufacturing as needed to ensure an always-in-stock strategy. And now Grace is going to go over overall brand operational strategy.

Grace O’ Hara:

Awesome. Thanks Helene. So first we're gonna go over your customers. Some of you may know, Amazon is the third largest search engine in the world. So having your products listed there is extremely important, even if it's not your largest sales channel, just having your products there, your name, brand, listed on Amazon will increase your consumer traffic immensely. Show your customers who you are, use your brand logo, your colors, focus on separating yourself from competitors. Amazon gives you access to more data on your consumers than any other sales channel. You need to be using this data. Know who's buying your products and market to them specifically, take full advantage of the Amazon analytics tools they provide you with. This data gives you the ability to identify where to invest and what products to push marketing wise, just don't make blind decisions when you don't need to. Own the experience. Be proactive in resolving issues customers face. Focus on reviews, obviously happy customers lead to referrals and also returning customers. So now we're gonna talk about inventory forecasting. It's critical to create year over year comparisons per product, to compare and contrast SKU performance across rich sales channels and marketplaces. This will give you insights into what products are selling well, where and vice versa. You should also be using trend performances to gain key insights on where to invest marketing and product wise. Drive forward with data and make decisions that are vetted with data. For example, Skubana as a solution generates replenishment recommendations that take into account sales velocity, vendor lead time, anticipated growth percentage, and estimated run out dates by automatically creating purchase orders when it's time to reorder products. Be strategic and take all this into account when focusing on inventory forecasting so that you don't fall behind. Once you begin to slip and fall behind, it's extremely difficult to get caught back up because of every day supply chain headaches and just the unknown. Demand planning. Demand planning is a key asset to a business' growth. Brands I speak with daily identified demand planning as a key functionality to their business as they're scaling. Stock-outs can put a business back tremendously, whether it be from having to refund orders placed with no inventory on hand, or simply causing a poor customer experience due to lack of products available. Not only do stock-outs cause a disruption in order fulfillment, but you can, and normally will also be penalized from the marketplace or sales channel your orders were being placed on. Think about it, major sales channels and marketplaces do not want brands selling their products on their platform to be receiving orders on items they cannot fulfill. This affects their user experience negatively, as well. Ways to avoid this is basically implementing a system or a software to help propel you forward. Focus on stock dollars. 65 per percent of business' cash is sitting in inventory. You don't wanna be weighed down by this. Cost of goods sold and inventory value are key metrics and consistently being asked about. The reason for this is that most of the businesses I speak with only want to be holding a certain amount of inventory stock dollars. As for cogs, many businesses refer to this as a key focus area due to their goal of reducing their overall cost of goods as much as possible, whether it be the product itself, shipping, et cetera, having a system or software to manage this will automate and make your process much more efficient. For example, again, Skubana would act as the brain of your business, where you can log in and see the broken down dashboards of your stock items broken down then by warehouse location. The more granular your data is, the better. That way you can determine where the bulk of your inventory is located and fulfill orders based on where you're going to get the highest ROI. So safety stock. I briefly touched upon this, a few slides back, but wanted to emphasize the importance of keeping this on hand. This is an inventory management best practice relevant to any business that deals with inventory or manufacturing in general. Safety stock, or buffer stock, is the extra inventory kept as a fail safe against demand fluctuations and supply chain uncertainty. This is important for your business to hold some amount of safety stock to reduce their risk of dealing with a stock-out. Having safety stock will allow you to have flexibility, prevent you from running out on popular items, and protects you from the unexpected, which is what we've seen in the past few years, and in general, and the supply chain management space can be extremely chaotic. Having this safety net will allow you and your team some breathing room when it comes to weathering the storms that come with keeping up with orders coming in. So to get more into 2022 and beyond. Now is the time to expand, go beyond Amazon. Obviously having your brand and product on Amazon is extremely important, but now is the time to branch out. Your customers are everywhere and you need to be where they are. In 2020 alone, the pandemic resulted in a 25.7% surge in eCommerce sales across many sales channels and marketplaces. Globally around 62% of eCommerce online sales were made through marketplaces in 2020. Diversify your channels and your brand, be everywhere. Consumers are more than ever searching on multiple sites for a specific product to find the best deal or discount code. Be aware of this and be proactive in having your products where your consumers are. So again, kind of going into the 2022 and beyond focus. Omnichannel, you're gonna be hearing that more than ever in the future in this upcoming year. Omnichannel inventory management is now easier than ever. In the past, most retailers had separate IMS or inventory management systems for each sales channel. However, now you can house everything within one single solution or source of truth, basically making it extremely easy to track orders coming in across multiple channels with no manual lift attached to it. Stay organized. I know it sounds basic, but you need to keep up with your stock and make sure your marketing campaigns are in line with your stock levels. Oftentimes brands and retailers I'm speaking with have faced issues where they're increasing ad spend and do not have the cross communication through departments needed, and in result will run out of products being pushed in marketing. Not only does this cause you to have to return orders, but now you're also losing money on the marketing side of things as well. So once again, just having that central source of truth or, you know, cross department communication is going to be super important. 27% of consumers would be likely to leave and visit another retailer store if a product is out of stock. And to get into omnichannel fulfillment. Be creative, flex your warehouse to be efficient with space and production. Be flexible, you know, have tools set in place to pull inventory based on warehouse location and inventory levels. For example, with Skubana, you can fulfill a non FBA order using your FBA inventory through multichannel fulfillment. So if a product is out of stock at your warehouse, but in stock at Amazon, MCF will allow you to fulfill the order through Amazon. This allows you to fully utilize your inventory rather than having sporadic stock levels across your different warehouses. The RD Group reports that 77% of strong omnichannel companies store customer's data across channels, compared to 40% of weaker omnichannel companies. So again, just really focusing on data and just knowing your customer, super important and just being successful. Business benefits. So this is gonna just kind of summarize a positive facts that will come out from making these changes and enhancements. By maximizing all of your e-commerce channels and increasing your customer convenience, you're sure to see increase in sales and positive customer feedback. Almost 75% of our shoppers use multiple channels and compare prices to find discounts. No one, at this point, is really going onto one site, purchasing the first product they see. The easier it is for your customers to see you and find your products, the higher your customer retention rate will be. So now we're gonna both get into client success stories. I'm going to start off talking about Viscata. So Viscata is an awesome Skubana brand who sells Spanish shoes and accessories across multiple sales channels, including Amazon. They were scaling extremely quickly, and with over 3000 SKUs managing across, you know, multiple marketplaces sales channels, having sufficient inventory and accurate data has made all the difference, their previous system required the team to manually toggle between fulfilled by Amazon, so FBA, and fulfilled by merchant, FBM, to auto switch SKUs based on inventory levels, it was extremely time consuming and error prone process and now Skubana's order bots take care of it automatically. Having reliable information was vital for Viscata, and since using Skubana they've seen a decrease in late orders, a decrease in stock-outs and an increase in positive customer reviews and higher customer retention rate. And now Helene's gonna talk about her customer success story.

Helene Pinkerton:

Thank you, Grace. In 2020, we onboarded a new apparel client who had issues with low confirmation and fill rates combined with unprofitable assortment through Amazon due to price matching. After analyzing their assortment, historical sales, and basket analysis, we developed a merchandising inventory strategy to pivot into profitable ASINs and create exclusive assortment for Amazon with exclusive colorways, multi-packs for low ASP (average selling price) items. Our client leaned into manufacturing, reserving inventory for Amazon for 2021, in conjunction with increasing marketing and optimizing detail pages. And focusing on top size and profitable ASINs for Amazon resulted in 130% year over year growth in 2021 and a 270% growth in Q4 2021, and also increased Amazon profitability per unit by 30%.

Grace O’ Hara:

So what to do now? Own your brand, again, make sure your logo's out there, you're using your color scheme, being everywhere is super important. Conduct your research. Knowing your customer is going to be the key to success. The more you know your customer, the higher your customer retention rate's going to be, and the more you'll be able to know exactly where your customer is looking for products. And start today. Again, now is the time to not only be focusing on Amazon, but also focusing on other sales channels and marketplaces and just making sure that your product is everywhere. That way it's easy for customers to be able to purchase it.

Helene Pinkerton:

Yeah. And to add to what Grace just said, for Amazon specifically, you make sure to leverage their suites of sales and inventory reports, to review your sales regularly and adjust your forecast accordingly. Also ensure an always-in-stock strategy on your top sellers so you don't lose ASIN relevancy and ranking.

Kerry Mallett:

All right, thanks so much Grace and Helene for sharing all of your expertise on how to navigate. Not just forecasting, but also fulfillment challenges given the continued challenges there. And so for our audience, before we dive into our Q and A with Grace and Helene, we have our last poll open right now. And so we would love to be able to work with you, to be able to make sure that you are not only able to forecast accurately, but also have excellent and buttoned up fulfillment, not only on Amazon, but also on other platforms as well. And so if you are interested with talking with our teams, you can let us know via the polls open right now. And if you have not done so you can submit questions in the chat as well for our Q and A with Grace and Helene. All right, well, I'll give everyone another beat to answer the poll question and then we'll get started on the Q and A. All right, so we'll move into our Q and A. We want let our audience know as well that the QR codes that you see here are linked to Grace and Helene's LinkedIn profiles. And so if you wanna connect with them after the session, you can feel free to scan those QR codes on your screen right now. All right, so our first question for our Q and A, is that given everything that you all talk about, if there was one piece of advice that you would give to someone who is selling on Amazon currently and there being challenges with obviously the current fulfillment landscape and also with forecasting, if you could tell them one thing they should do in the next 30 to 90 days, we'll say, what would that one thing be?

Helene Pinkerton:

Well, for me like I said several times, it's just focus on those top sellers and make sure that you are in a good inventory position on that. And this way you can also like focus your marketing and all your optimization efforts for those top sellers.

Grace O’ Hara:

Yeah. I agree. Top sellers are super important. Also just having the safety stock for your top sellers. I talk to brands pretty much every day, that one of their main problems is they'll sell out of their top products and have to wait two more weeks to have a replenishment, so it's just something to keep an eye on.

Kerry Mallet:

Definitely. Definitely. What about more long term? What would be, would that change your advice at all for someone selling on Amazon, if they're looking more in the six to 12 months range?

Helene Pinkerton:

Yeah. That's where you can really get into like reviewing your sales velocity, you know, redoing your forecast and adjusting, you know, if you're manufacturing yourself, adjusting your manufacturing way in advance. All my clients that are brand owners that are doing their own manufacturing, we do planning like a year advance. That's what I would recommend. So you do you have that inventory and as Grace said, that safety stock.

Grace O’ Hara:

Mm, yeah. And definitely implementing at that point, an inventory management system, or just a software in general to kind of help you keep track of your current inventory or forecasting and just having those tools data wise in order to plan ahead.

Kerry Mallett:

Awesome. Well, thank you both, well, we are gonna wrap our Q and A portion and for our audience, I'm going to launch our featured poll or excuse me, featured action, which is on the bottom of your screen right now. And so if you're interested in learning more about all things featured in digital marketing, not just fulfillment and forecasting, but also all things Amazon, retail media universe, and beyond, you can find all of that on our digital marketing hub that is linked right now. I'm also going to launch a push notification where you can rate not only this session, but the summit overall and your experience today. We love your feedback, and oftentimes we'll use what you all suggest of what you want to see going forward for topics in future webinars. So we want to know what's important to you there. So sincerely want to thank Grace and Helene for joining and thank you to Skubana and Grace for coming on as a partner, we always love working with you all, so really appreciate you all coming on here.

Grace O’ Hara:

Thank you.

Helene Pinkerton:

Thank you.

Kerry Mallett:

Thank you both. And then for our audience, we are wrapped, we have wrapped day one of our Amazon retail media virtual summit. So we had a jam-packed day and really appreciate everyone's engagement throughout the day as well. Make sure to tune in tomorrow. You'll be getting more details in your inbox as well, but we will be covering all things retail media starting at the same time tomorrow. So 10:00 AM Pacific, 1:00 PM Eastern on the same platform and the same link that you used today, so very easy to come back on. We also will be talking Walmart and then how one of our clients, Poppi, the prebiotic soda brand has been able to scale their growth across digital grocery marketplaces. And then we'll be talking with KMG, a broker, about not only how to get your products on the shelves at different retailers, but also back off again by having consumers buy them and creating winning advertising. So want to thank everyone for joining today and we will be back again tomorrow morning and yeah. Thank you again, Grace and Helene.

Helene Pinkerton:

Thank you.

Grace O’ Hara:

Thank you.

Kerry Mallett:

Thanks all. I'll see you all tomorrow.

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