Amazon has a number of factors that go into serving up the right product to the right customer. While Amazon inventory management can drive one factor in the search results, there are many factors to be considered.
From a high level, there are two inventory options. First is Fulfillment by Amazon (FBA), where Amazon tells the merchant where to send the product, then manages distribution throughout their fulfillment locations based on sales. Second is self-fulfillment, where the merchant manages their own supply chain and fulfillment.
The Connection Between Inventory Management and Amazon Search Rank
With Fulfillment by Amazon, inventory counts are extremely accurate. Still, some distributors prefer to manage their inventory through their own distribution network, the reasons for which we will discuss later on. The challenge is meeting the customers' expectation of Amazon Prime.
Amazon has done a fantastic job in their war against Buyer's Remorse. Customers know that anything they could wish for will show up at their door within two days. That is a hard expectation to meet.
While there isn't a ranking penalty for having low inventory if the customer expects a product within two days and it takes two weeks, it's much more likely that the customer will leave a bad review. Those negative reviews can be anchors that keep good products from the top of the listings.
Westleigh Styer, Owner of Knightly Deals, points out a silver lining, "Sales outweighs everything." Enough sales volume can keep products bubbling up to the top of search results. If the customer buys when Amazon shows a product, Amazon will continue to show that product first!
How Do Amazon Reviews Factor In?
There are two places that customers can leave reviews. Both are important to manage for brands looking to score big on the Amazon Search. These should be a core part of your customer service, marketing, and even product management.
Amazon Product Reviews
Amazon's product review scale is one to five stars. This star system is an important interaction point with customers. The customer reviews for products are generally permanent and are often looked over as a source for research.
Think of Amazon reviews as a product feedback loop. Positive feedback is an excellent source for finding out the specific features and benefits customers enjoy – the features and benefits that should be highlighted in the product's listing. Feedback on competitors' products can add insight and direction to positioning product descriptions to attract customers who are comparison shopping.
Positive reviews can be an opportunity to deepen the customer relationship by recommending complementary products in a reply. Thank customers for their purchase, cite specific notes from their post, and bridge into linking additional products if the opportunity presents itself.
For negative reviews, always start out by offering sincere apologies. Let the customer know the best way to contact you, and offer a refund or replacement. Other potential buyers are looking for negative reviews to see how the brand handles issues. Bad reviews are opportunities to build trust with every customer down the line.
Amazon Seller Ratings
The seller ratings are on the seller as a whole. While not as common as product reviews, these can be beneficial for brands to build trust, specifically on the Buy Box for products that are not fulfilled by Amazon.
While they should not be ignored, brands should focus 90% of effort on the Product Reviews and 10% on Seller Reviews to make the best use of their efforts.
Seller reviews should only be on customer service. Anything else can be removed if desired. Too many negative seller reviews can get a seller suspended or even removed from Seller Central, so they should not be neglected.
Amazon Seller Inventory Management Tips
Now that we see how inventory management can indirectly affect your product rankings on Amazon, how can you manage Amazon inventory for the greatest accuracy and get those great reviews we all want?
Amazon allows brands to manage their inventory through their internal Amazon Inventory Management System. Each product can have inventory in four categories. For each product the Amazon Inventory System will show the following breakout:
- Available — The current quantity available to ship to customers.
- Inbound — The amount of product that is scheduled in shipping plans, in-transit, or currently being processed at the fulfillment warehouses.
- Unfulfillable — Any inventory that is in a fulfillment center, but not currently able to be sold due to damage, quarantine, or awaiting inspection.
- Reserved — OProduct that is being received at the fulfillment center, associated with a current order, or in transit to another fulfillment center.
- Fee Preview — Estimated fees for the management of product when sold.
- Fulfilled By — Lists Fulfilled By Amazon or the seller as responsible for fulfillment.
There are also multiple third-party applications that can tie in to manage Amazon inventory in coordination with other channels.
Tools to Use to Accurately Manage Inventory on Amazon
The most common inventory management systems are Amazon's smartphone apps and website. The Amazon Inventory Management Systems include tools like a Trajectory Alert that sends reorder alerts on days the brand specifies based on sales volume. This allows a brand to set buffers to accommodate reorders from overseas, and still meet customer demand.
Take advantage of the big data and tools that Amazon offers to ensure stocking levels that prevent "out of stock" messages to customers ready to buy.
FBA vs. FBM
Selling products on Amazon leaves you with two choices. Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). The merchant's size, capabilities, and business plan will be the determining factors between the two supply chain solutions. The goal for specific products might be drivers for selecting the channel as well.
Fulfillment by Amazon
- Prime. Probably the biggest driver for FBA is the Prime listing. Amazon Prime customers look for the Prime logo to know that they can get their product in two days with free shipping.
- Hands-Free Fulfillment. For business owners who are looking for a lifestyle business or minimal management, FBA is by far the easiest option, handling the product from receipt to delivery.
- Shipping Discounts. Since Amazon is one of the largest shippers in the world, the price to ship product can be greatly reduced, especially for such fast turn around times.
- Fulfillment Fees. Since Amazon controls the supply chain, there are fees for handling and fulfilling product. This can be a big cost for small sellers.
- Long-Term Storage Fees. Amazon will add additional carrying charges for products that sit in the warehouse for longer than six months based on square feet utilized on the shelf. Smaller products with faster inventory turnover rates are not at risk though.
- Dictated Stocking Levels. Brands may have to send in more than estimated to a fulfillment center further than would be favorable even though the product will be broken down and shipped across the U.S.
- Product Labeling. Amazon specific labels need to be applied to the product by the manufacturer or by Amazon's labeling service.
Fulfillment by Merchant
- Increased Ownership. The largest benefit of fulfilling their own product is that the merchants can better control the relationship with the customer.
- Fewer Fees. When the merchant owns the distribution channel, they have more control over the costs and savings.
- Higher Margins. At scale, a merchant with a robust supply chain or the right 3PL partner might be able to realize better margins using their own existing resources.
- Prime Expectations. Not every merchant and product will qualify for Prime. When Amazon customers expect the product to their door in just two days, it can mean damaging reviews if the merchant can't meet that expectation.
- Overhead Costs. For merchants that don't already have warehousing and fulfillment resources, the costs of space and staffing can be staggering.
FBA is a great solution for businesses that want a more hands-off approach. They will find the management of high-volume products can lead to better margins.
FBM is better suited for niche brands with very specific product offerings or established merchants with an existing supply chain as an additional channel. FBM is also excellent for oversized products, slow-moving or product testing where large margins aren’t necessary.
How to List Products on Amazon To Crush Your Rankings
Inventory management of Amazon products may be indirectly related to how your products show up in search, but what other factors can affect your rankings? The first step to getting to the front page of Amazon Search is the product listing.
As we mentioned, sales are the dominating factor in the search. Crafting a product page that accurately represents your product and fills a customer's need is the best way to get those sales quickly.
Below are the components of that product page and some key points you will want to consider when listing products. For a reference, keep the Amazon Product Style Guide bookmarked to ensure compliance with Amazon’s best practices.
1. Use unique photos to attract customers.
Probably the most important factor in making sales on Amazon are the photos. The requirement is a white background on the main picture, but Amazon is favoring all white background photos for consistency. Stay away from lifestyle photos when possible.
As screens get better every year, be sure to have a high resolution of 1000 dpi or higher. The product should take up 80% of the image and shouldn’t include anything not included in the package.
Don't be afraid to do something different than similar product listings. Stand out! If all of the other similar items have similar images, try a different angle. Our eyes are attracted to breaks in patterns.
2. Write a clear and descriptive title.
Customers prefer clear and accurate titles. Be aware that different placements show different lengths, so keep the best description to the front.
Keywords used to be the primary search tool, but brands are finding that keyword stuffing doesn’t work like it used to. Amazon promotes products that sell, proving the product is the one that customers want. Accuracy beats keywords so focus on user experience.
3. Sum up the features and details in five points.
The best practice is to limit your features list to only five bullet points. This is a great place to highlight the key benefits of a product. Showcase any warranties or satisfaction guarantees to reduce the risk for the buyer.
While the Features and Details section shows above the fold on desktop browsers, for mobile browsers this section requires scrolling and a click through to a new screen. The most impactful bullet point should definitely be the first listed feature.
Refer back to the terms buyers use to help determine what the most important features are to them. Looking at social posts and emails can yield unique insights into customer behavior.
4. Specifically address your buyers’ needs in the item description.
While the description doesn’t impact ranking directly, it is an excellent place to give a product a story. Features are one thing, but people buy based on a need. By focusing on the problems that product solves, the advantages become more real to the customer.
Generally, this section is text only, so the content is critical. Aim for at least 1,000 words to make the best use of the space offered.
Always include a clear call to action that directs the customer to the next step toward the sale. Never assume the customer knows what to do next. Sometimes a little nudge in the right direction is what it takes to turn a window shopper to a buyer.
With Amazon’s invitation, a seller can allow HTML markup in their product descriptions, which can bring a listing to life through images and dynamic text.
5. Don’t forget backend search terms.
For the humans buying the products, dropping tons of keywords in titles and descriptions looks spammy. Amazon built the backend search terms section as a place to drop in those keywords that customers may be searching for in a way that is not intrusive to the buying experience.
The key is to stay relevant. More important than products showing up in search results is customers buying the products that show up in search results.
6. Be thoughtful about the categories you select.
Another way to control how products show up in search is through categories. Amazon lets brands chose one to three categories under which to be listed. A best practice is to look for similar products to discover how they are classified.
While a product might not be the first position for a search term, if the product can rank within a category it might become more discoverable to customers browsing by interest rather than a direct search.
7. Consider advertising on Amazon.
One tool to help brands get their products sales up faster is Amazon Ads. Brands have the options of promoting their brand, product or store to build the volume necessary to increase ranking. For products with the pricing and margin required, this can be an excellent solution to drive sales to targeted customers.
Similar to other paid advertising platforms, Amazon Sponsored Product Ads target keywords and shopping behavior to promote products in the search feed for a price. Amazon recently retired Cost per Impression (CPM) in favor of Cost per Click (CPC), so businesses pay only for interested customers instead of views of the ads.
Amazon is a key retailer in the e-commerce space. If you sell consumer goods, Amazon should be a part of your distribution channels. Another insight from Westleigh Styer is, “Amazon is a platform, not a business model. Amazon can shut you down, but no one can shut down your store.” With Alexa devices making it into the car this year, more people are shopping with voice everywhere they go.
Warehouse Anywhere can be the support a digitally native vertical brand needs to compete with FBA while keeping ownership of the supply chain from beginning to end. Enjoy the increased distribution power of over 10,000 US locations, while still ensuring the customer journey has the level of care and quality that your brand represents.
No matter what channel you sell through, it is essential that when a customer places an order, they can get their product quickly. Follow the link to learn more about how proper inventory management can help you and your business.
Please feel free to reach out to me if you have any questions!