Amazon Supply Chain Challenges and Solutions
Amazon supply chain management issues are a challenge for many eCommerce sellers. But why exactly are there supply chain issues, and which components of supply chain management in eCommerce can you adjust to help you run a more efficient business?
If you are searching for an eCommerce supply chain strategy, you are in the right place. This article explains how retailers should use supply chain management in eCommerce to get their products to the right places at the right time and offers inventory and supply chain management solutions.
eCommerce Supply Chain Management Process
A well-oiled supply chain is vital to ensuring that your business runs smoothly. Good supply chain management guarantees an efficient flow of raw materials and a properly managed product inventory. It also allows you to track the movement of your goods from start to finish, all the way from production to delivery. Simply put, procurement, manufacturing, and distribution of goods to customers are all part of supply chain management.
Here is a list of each step involved in the process of supply chain management:
- Procurement: the process of acquiring goods and services
- Manufacturing: transforming inputs into finished products
- Distribution: getting products to customers through retail or direct channels
- Inventory Management: finding the correct balance between stock
Before explaining why eCommerce sellers have supply chain issues, let’s discuss the Amazon supply chain management process in more detail.
Procurement Supply Chain Management in eCommerce
Procurement in eCommerce supply chain management is the first essential piece of the Amazon supply chain. You can’t run a successful business without acquiring goods and services for your Amazon store. Whether you’re sourcing goods from vendors or using Amazon FBA, the quality of the products is critical to your business’s success. Finding suitable suppliers is essential, and you’ll want to make sure that they can meet your Amazon shipping schedule.
If you’re not careful, you may find yourself stuck with excess inventory and supplier delivery delays. That’s why it’s crucial to have a good Amazon procurement supply chain management plan in place. The solution to eCommerce product procurement is to partner with Amazon supply chain management suppliers to meet your shipping schedule.
Manufacturing Amazon Supply Chain Management
Once the products are procured, they must be manufactured into finished goods. Manufacturing Amazon supply chain management is one of the most complex aspects of running an Amazon business. You must manage production so that you’re able to keep up with customer demand while avoiding stock-outs.
You also need to ensure that the quality of your products meets or exceeds Amazon standards. Failure to do either of these can lead to lost sales and negative Amazon reviews. But, of course, the solution isn’t that simple. Instead, it takes a lot of Amazon supply chain management to ensure that everything runs smoothly.
Managing inventory is one of the biggest challenges retailers face, especially regarding eCommerce supply chain strategy. It can be challenging to strike a balance between having too much stock (which can lead to excess inventory costs) and not having enough stock (resulting in lost sales opportunities).
Amazon Distribution Management
The final piece of the Amazon supply chain puzzle is Amazon distribution – getting your products to customers. Distribution includes all necessary steps to take a product from Amazon warehouses to Amazon fulfillment centers and then ship it out to consumers.
It’s essential to understand how Amazon supply management impacts inventory levels and what you can do about it. By investing in an eCommerce supply chain strategy now, you’ll be able to handle future growth more easily. Now that we have explained each eCommerce supply chain management component let’s discuss why so many retailers struggle with these issues today.
eCommerce Business Supply Chain Problems
Many small retail business owners don’t realize how complex this issue is until they manage an Amazon FBA or Amazon supply chain. Amazon FBA businesses have a leg up for Amazon supply management, but even they need an excellent Amazon eCommerce supply chain strategy in place.
The number one reason retailers struggle with Amazon logistics is that they fail to plan for growth and expansion. To succeed at Amazon retailing, you’ll need the proper tools from day one of your business launches. You can’t afford delays or problems along this part of your Amazon sales journey if you want an efficient Amazon fulfillment process.
Inventory and Supply Chain Management Solutions
Processes should be well-organized and optimized at each stage of the distribution process, from inventory to logistics and procurement to supplier management. But what are the solutions to common inventory supply chain challenges?
There are a four things that eCommerce retailers can do to optimize inventory management. Here are some solutions to properly managing your supply chain strategy:
1. Ensure Product Availability
With an increased focus on Amazon outbound shipping optimization services in the last few years, retailers need a way to monitor how many orders they’re receiving per day across all marketplaces where their products are sold. If too many orders come through within a short timeframe, there might not be enough Amazon warehouse space available to store and fulfill them.
This is where Amazon inventory visibility comes into play. For example, suppose you’ve integrated your eCommerce platforms with Amazon. In that case, it can provide reports on which items are in stock at any time. In addition, several systems track orders on multiple platforms regardless of the marketplace where they’re sold or how many orders have come through.
You’ll know whether there’s room for incoming orders before anything gets shipped out by tracking availability. Reviewing product availability prevents extra costs by controlling excess inventory levels and long lead times from suppliers when sales happen too quickly due to a lack of Amazon supply chain management capabilities.
2. Provide Quality Service
Amazon supply chain management is also responsible for providing quality service. This means that Amazon inventory processes and Amazon warehouse storage space must handle surges in demand so that products can be quickly shipped without any delays.
One way to help with this is by using Amazon FBA (fulfillment by Amazon) as your order fulfillment partner. Amazon will store your products in one of its many warehouses, pick, pack and ship the orders for you, and do all of this promptly so that customers are happy with their purchase experience.
The downside to using Amazon FBA is the cost – it’s not free to use their services. However, suppose you’re selling items that have large spikes in sales volume at Amazon. In that case, Amazon FBA Amazon supply chain management could be a good Amazon warehouse storage space solution for you.
3. Control Excess Inventory Costs
Amazon supply chain management also aims to control excess inventory costs. This can help increase your bottom line in the short term by preventing overstock situations and decreasing Amazon warehouse rental fees.
However, it’s important not to let this go too far, or else Amazon stock levels will fall too low, which could cause customer complaints about out-of-stocks when things are needed most—like during vital product launch periods at Amazon. Therefore, you should learn how to balance inventory levels and predict when there will be spikes, or slows, in demand.
One way to control excess inventory costs is through reordering strategies that keep Amazon stock levels from falling below certain thresholds while allowing plenty of room for quick sales due to unexpected demand surges.
4. Receive Quality Customer Reviews
As an eCommerce retailer, you’re essential to providing quality service. To do so, focus on delivering exceptional service across the entire Amazon supply chain management process. By the end, your customers should be delighted with their purchase experience and leave positive Amazon reviews. Positive reviews will help increase your sales volume over time, too, as word of mouth is crucial in purchasing decisions at Amazon.
With Amazon FBA or without Amazon FBA, Amazon supply chain management is a complex process that requires careful planning to maximize efficiency. Several factors go into supply chain management in eCommerce, so sellers must plan to ensure Amazon’s success. Inventory management, Amazon distribution, and quality control are all vital components of the eCommerce supply chain strategy that will help you optimize your Amazon FBA business model for success.
Today’s consumers expect quick shipping options with minimal hiccups or problems along the way. If they order something online today, it should arrive on their doorstep within a few days at Amazon. This is where Amazon supply chain management comes into play, and without it, orders can quickly overwhelm a business.
But with these supply chain solutions, your company should be ready to keep up with the high demand and expectations of Amazon customers. To meet customer demands and compete in the Amazon marketplace, eCommerce businesses need to have a well-oiled Amazon fulfillment process that runs like Amazon supply chain management clockwork.