Amazon’s recent announcements regarding pricing changes and penalties, especially concerning Fulfillment by Amazon (FBA), have stirred conversations among sellers. With new inventory fees on the horizon, understanding and adapting to these shifts becomes paramount. At Standvast, given our team led the innovations of FBA, Amazon’s e-commerce supply chain, and merchant marketplace, we know Amazon better than most. We also built Standvast to create a complimentary but independent fulfillment service and technology supply chain solution so all of our clients can respond in real time to the various changes that have come and are likely to come. As always, we’re closely examining Amazon’s latest updates, exploring their implications for sellers, and sharing how our composable fulfillment solutions address challenges and enhance performance in this dynamic landscape.
Changes at Amazon FBA
Amazon’s decisions may seem capricious or unconnected. However, as we have shared with our clients, they are not illogical but focus on removing areas where Amazon was subsidizing costs for sellers who did not have a robust multi-node supply chain model. Further, when they make these changes, they are often introduced as penalties representing a significant shift in margins and moving many sellers from growth mode to focusing on margin or even survival. The changes also occur quickly and with limited notice. Beginning April 1st, new inventory fees will come into effect, impacting long-term storage fees, monthly inventory storage limits, and penalties for insufficient inventory. Amazon has added to its Inventory Performance Index (IPI) metric to assess seller performance, urging sellers to monitor their scores to avoid penalties and optimize their inventory management practices. Without the right solution, these can become punitive and difficult to manage.
Further insights from Supply Chain Dive shed light on Amazon’s adjustments to inbound transportation fees, directly affecting sellers’ costs. Speculation regarding increased storage fees and penalties for inventory mismanagement underscores the need for sellers to reassess their strategies and explore alternative fulfillment options to navigate these changes effectively. Standvast understands the challenges faced by FBA sellers. We were built to support and offer tailored solutions to address changes that will continue to come as our supply chain is flexible and optimized for the end-to-end omni-commerce supply chain. Our technology and processes prioritize inventory quality, driving sales, efficiency, and defect-free results. Through our auto-replenishment service, we optimize inventory management, minimize costs, maximize sales, and ensure seamless supply chain logistics.
Standvast enables FBA sellers to use more consistent, reliable, transparent inventory data.
Maximizing Your Inventory Performance Index
Efficient inventory management goes beyond fee avoidance; it’s about maximizing your Amazon Inventory Performance Index (IPI). This index assesses how effectively you manage your FBA inventory and penalizes unproductive inventory practices like overstock and stock-outs. By utilizing Standvast’s advanced inventory management solutions, you can unlock numerous benefits that will enhance your presence on Seller Central, reduce fees, and boost sales.
Amazon’s search algorithm prioritizes listings with available stock for immediate shipping. Utilizing Standvast helps maintain optimal inventory levels, preventing stockouts and increasing the likelihood of your products appearing prominently in search results. Enhanced visibility drives more traffic to your listings, ultimately improving your sales prospects.
High ratings signify trustworthiness and reliability, crucial factors impacting sales performance. Standvast’s auto-replenishment system ensures consistent product availability and prompt order fulfillment, enabling you to provide exceptional customer experiences consistently. Satisfied customers are more inclined to leave positive reviews and ratings, strengthening your seller profile and attracting new buyers.
Even better, the one inventory source at Standvst and using our fulfillment and technology solutions can also help introduce new and optimize sales on dozens of other channels. This creates further growth and margin potential while removing constraints on your growth or breaking dependencies on Amazon. Our solutions complement Amazon but help you break single-threaded risks that allow you to create organizational value that few other solutions can provide.
Caption: Our advanced inventory management system empowers sellers with informed decisions.
Leveraging Auto-Replenishment
Standvast’s auto-replenishment system is designed to proactively help sellers avoid falling below the low inventory level fee threshold. Our fulfillment centers near the commonly used Amazon cross-dock sites help minimize shipping costs, reduce lead times, and increase the nodes you can distribute products to while improving your total costs. This alone provides a competitive advantage.
On top of that advantage, our clients can leverage Standvast’s proprietary technology that forecasts expected demand by individual products or product types using sources from Amazon, our clients, and best-in-class machine-learning modeling techniques. We then consider continuously changing inventory levels and transit/cycle times at each leg of the replenishment process while considering middle mile costs and all Amazon fees, to optimize replenishment recommendations across our client’s products to optimize costs, stock levels, and margin growth. Using Standvast to monitor and adjust replenishment orders continuously, sellers can further prevent costly penalties and optimize profitability.
Further, the auto-replenishment system simplifies a client’s inventory management, streamlines operations, and reduces manual ordering or other workloads for sellers. It also allows inventory to be used for other sales channels instead of being trapped at Amazon or in transit, creating further avenues for growth. By automating the replenishment process, sellers can divert their attention to other critical aspects of their business, such as product development, marketing, content, channel management, and customer service, resulting in increased efficiency and sales.
Our inventory purchasing and allocation engine empowers sellers to make well-informed decisions, ensuring that the right inventory is available in the right place at the right time across all your channel sales strategies. Leveraging advanced algorithms and machine learning, we optimize a client’s order fulfillment, establish closed-loop data feedback mechanisms, and integrate technology across systems to enhance efficiency and service quality. This approach enables Standvast to optimize sellers’ relationships with Amazon while lowering storage costs, minimizing stockouts, and reducing the total landed costs within the network.
Get In Touch
Sellers must adapt swiftly to remain competitive in Amazon’s evolving FBA landscape. Standvast offers comprehensive solutions to navigate these changes, ensuring seamless operations, cost optimization, and enhanced performance for sellers in the dynamic e-commerce ecosystem. Get in touch to learn more about having Standvast manage your IPI and drive efficiencies with our auto-replenishment.
