Insider Secrets for Staying in Stock During Q4
In this episode, Chelsea Cohen of SoStocked joined Paul Sonneveld and explored what you can do as an agency, or as an aggregator to help your clients and brands stay in stock during peak trading season.
Restock Limits: Increasing Your Sell-Through Rate
Restock limits play a crucial role in maintaining stock levels during peak trading season. Chelsea, the speaker advises focusing on increasing your sell-through rate to improve restock limits. This can be achieved by increasing sales and decreasing the amount of inventory held at Amazon. Smaller, more frequent orders can help improve the sell-through rate, as Amazon considers how quickly you turn over inventory when calculating restock limits.
“Plugging in your multi-channel fulfillment, your Shopify, your eBay, whatever it is, could help to increase your restock limits and then having that backup of fulfilled by Merchant… So those are some of the things that should be thought of when you're looking at restock limits.” - Chelsea Cohen, CEO/Co-Founder, SoStocked
Chelsea also suggests using multi-channel fulfillment and connecting platforms like Shopify to increase restock limits. Additionally, utilizing fulfilled by merchant (FBM) for backup sales can boost the sell-through rate without adding to the inventory held at Amazon.
Logistics Flexibility: Just-in-Case Inventory
Logistics flexibility is crucial in avoiding stockouts and delays. Chelsea introduces the concept of "just-in-case" inventory, which involves holding extra inventory in various locations as a buffer. This approach replaces the traditional "just-in-time" inventory strategy. Chelsea recommends avoiding putting all your inventory in one basket and instead diversifying storage options. This may involve using third-party warehouses or utilizing FBM as a backup fulfillment option. By having multiple storage locations, you can mitigate the risk of stockouts and delays caused by unforeseen circumstances.
“Gives you the option to make a different move rather than locking you into to being stuck at the at the behest of someone else, you know, messing up or whatever.” - Chelsea Cohen, CEO/Co-Founder, SoStocked
Speeding Up Check-In Times
One of the most frustrating aspects of inventory management is waiting for Amazon to check-in your inventory. Chelsea explains that live unload services can help expedite the check-in process. Live unload involves using companies that are not tied to Amazon's trailer drop-off system. Instead, they unload your inventory directly into the warehouse, reducing the risk of delays. While live unload services may be more expensive, they can significantly improve check-in times and ensure your inventory is available for sale when needed.
Maximizing Receipt Rate
Ensuring a high receipt rate is essential for maintaining stock levels. Chelsea emphasizes the importance of accurate shipping and tracking to avoid missing inventory. Communicating effectively with your 3PL and ensuring they are reliable and efficient can help minimize errors.
“Making sure that each of those shipments were delivered. And sometimes you need to look at, let's say you're doing loose cartons, your shipping and cartons rather than pallets, making sure that you see the tracking numbers, and that it's actually moving and tracking, because it's possible that at your warehouse, you left something off, and we've had this happen ourselves with loose cartons. ” - Chelsea Cohen, CEO/Co-Founder, SoStocked
Additionally, maintaining accurate records and promptly addressing any discrepancies can help improve receipt rates. While it may be challenging to achieve a 100% receipt rate, proactive measures can significantly reduce the risk of missing inventory.
Balancing Marketing Strategies and Stock Levels
“So I decided that if I you know, invented a term and said Inventory Minded Marketing would connect the dots between those two things and show how inventory and marketing are directly correlated. And if you get good at connecting those two and coordinating them, you can actually increase your revenue but also your profitability.” - Chelsea Cohen, CEO/Co-Founder, SoStocked
Marketing strategies play a crucial role in driving sales, but they must be balanced with stock levels to avoid stockouts. Chelsea introduces the concept of "inventory-minded marketing," which emphasizes the correlation between inventory and marketing. The marketing team should collaborate closely with the inventory team to align their plans. The inventory team can provide data on stock levels and potential stockouts, allowing the marketing team to adjust their strategies accordingly. By coordinating inventory and marketing efforts, brands can increase revenue and profitability while maintaining stock levels.
Staying in stock during peak trading season is a challenge that brands and agencies face every year. By implementing strategies such as managing restock limits, maintaining logistics flexibility, expediting check-in times, and balancing marketing strategies with stock levels, you can help your clients and brands avoid stockouts and maximize sales. Remember to communicate effectively between teams and utilize data to make informed decisions. With careful planning and proactive measures, you can ensure a successful and profitable peak trading season for your clients and brands.