Disruptions to any supply chain can be devastating; and for your online business, the supply chain is your livelihood.
The supply chain is every component from your manufacturing, to your storage, to your shipping, and finally to your customer. Having a disruption in any segment of your supply chain can spell disaster, so finding ways to safeguard your supply chain can help ensure you can weather any situation (such as the recent COVID-19 pandemic). But, what strategies can you employ to ensure that your supply chain is secure, and the flow of products can continue all the way from manufacturing to your customers with a healthy profit margin?
FBA Restock Limit Changes
First things first, a big issue that many sellers are running into now is that Amazon lowered restock limits last year to a 200-max storage limit, and increases are based on the sell-through rate. The Amazon Restock Algorithm uses turnover (days of stock) in order to determine their restock limit, and this in turn is based on not only when your items arrive at FBA, but at the point that inbound shipments are made. Increasing your turnover could involve sending in smaller shipments to FBA and storing extra at a 3PL warehouse, or doing smaller orders from your manufacturer, but more frequently. However, this all means safeguarding your supply chain is more important than ever.
Strategies for Safeguarding Your Supply Chain
Using a 3PL Warehouse
By using a third party warehouse to store your goods, you’re no longer bogging down your Amazon storage limit, and this can allow you to trickle in your goods into the FBA system and help improve your Amazon max storage limit and sell-through rate.
Decrease Shipping Times
Shipping times for Amazon FBA are calculated by when your goods are added to the shipping queue. If you are manufacturing in China, this could elongate your shipping time unnecessarily. By moving your goods to a 3PL warehouse in the US first, then adding your shipping labels to Amazon, you’ll reduce the amount of shipping time calculated by Amazon.
Don’t Skip on Inspections
While your manufacturer may often do their own level of inspections after your product is made on the factory floor, products can still slip through the cracks; they are more interested in their bottom line than yours, after all. So, it may be in your best interest to invest in the services of a third-party inspection company to be your eyes and ears within the manufacturing process. Having an inspector that you can trust to go to the factory and do mid-production inspections, as well as end-production inspections can ensure you are getting the quality of goods you are expecting. Bad quality goods results in unhappy customers, tanking reviews, and can affect your sell-through rate.
Understanding Your Supply Chain
Understanding your supply chain is the key part to being able to help come up with strategies to safeguard it. Knowing how Amazon calculates its sell through rate and max storage limit can help you better design your supply chain shipping schedules, and investment needs in 3PL warehouses to ensure you are getting your goods to your customers when it’s most important. With the upcoming Q4 season, including the biggest holiday seasons of the year, you’ll want your supply chain safeguarded and ready to handle the sales.
If you are looking for more tips and ideas for your ecommerce business, then visit Wizards of Ecom today.
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