How to create and manage inventory on Amazon?

Managing your inventory is key to running an Amazon business successfully. It helps you avoid two major profit killers. One is loss of sales by going out of stock, and the second is paying an extra storage fee due to overstocking.

Good inventory management can be simply defined as striking the right balance between too little and too much stock. Therefore, in order to grow your business, you can manage inventory on Amazon

Using the right strategies, you shall be able to figure out how often you need reordering. 

So, here are the best practices for proper inventory management. 

Table of Contents

  • Why is inventory management important?
  • Make your Product Listings
  • Keep Your Product Ready
  • Ship them To Amazon
  • Order, Pack and Ship them Away
  • Slow Down When Needed

Why is inventory management important?

Our patience levels have dropped drastically with the advent of the internet. Thus, product delivery is expected to be fast too. People shopping online don’t want to wait for products to come back in stock. Moreover, a majority of them would be upset if their order arrived late.

So, if you keep running out of inventory, the customers will then be forced to purchase from your competitors. This will lead to an increase in their organic ranking while yours would diminish each day you remain out of stock. Contrary to this, overstocking your inventory will tie up capital in your business. You would also run the risk of long-term storage fees if you are utilizing FBA inventory. 

Your inventory management is affected by a lot of factors as an Amazon seller. The factors range from your supplier’s manufacturing and shipping times to customs delays, FBA storage capacity and fees, and sell-through rate. In Case, you can also learn how to improve listing quality on Amazon

When launching a new product, it can be tough to estimate how much inventory you should order. It is so because your brand-new listing will have no reviews. Without any social proof, your listing won’t convert like your competitors 一 at least not right away. 

However, over time, you would learn how fast your inventory sells. Thus, you would be able to order more accurately. Following are a few tips on how to manage your inventory. 

Amazon Inventory

Make Your Product Listings

There are two ways of adding Amazon products to your catalog. You can either do this manually or take help from different Amazon inventory management software. Doing this will help you add your products to your inventory one by one or in bulk altogether. 

Amazon catalog

Keep Your Products Ready

After manufacturing your products, you should keep them ready to be shipped and delivered through Amazon delivery services. It’s crucial for the customers that their products reach them intact and in perfect condition after leaving your inventory. 

You can also take advantage of shipping and packaging materials from Amazon’s shipping supplies. Amazon will deliver basic materials required for packaging like cartons and bubble wrap at your Amazon inventory address. 

Ship Them To Amazon

For shipping your packages, you have to choose the suitable courier and transport companies and ship them to Amazon’s fulfillment centers accordingly. You can use various tools for tracking your packages and ensuring that they reach the warehouse from your inventory before the given time. 

Once the packages leave the inventory and reach the warehouse safely, your job is done.

Amazon shipping queue

Order, Pack and Ship Them Away

Most orders come with a free shipment and delivery option and an added bonus of fast and cost-friendly delivery, especially for Amazon Prime members. When a customer orders a product, it’s picked from the warehouse, cautiously packed for delivery, and then shipped to the desired address. 

Using these practices in Amazon’s inventory management, the products are picked, packed, and shipped one after the other.

This process allows the customers to track their products live from the code and get real-time updates from shipment of the package from your inventory to the warehouse and reaching the final delivery address. The customers feel relaxed sitting in their home, tracking the updates, and waiting delightfully until the package arrives. 

Slow Down When Needed

In the marketing field, a good strategy is not getting the maximum customers but not losing a single one. Often times, due to marketing techniques from Amazon or change in prices, your sales may drastically increase or go at the bottom. 

In that situation, your inventory can go out of products and will not be able to maintain the demand and supply cycle. It may leave the customers to leave out a negative review due to delay or unavailability of products. 

So at times of crunch situations, you should lower your sales to meet the generic customer requirements.  


So, the right balance, as always, lies between too much and too little. Thus, you need to figure out the optimum inventory levels for your product as per its demand. 

Once you understand your demand and the required inventory level, you negotiate the risks.

It is advisable to slow down when running low on inventory and be aggressive with the pricing when running in excess. Following certain steps and practices can help you grow your business on Amazon.