Today we will discuss “A complete guide: what is Reserved inventory on Amazon“. For sellers and businesses utilizing Amazon as their primary sales platform, understanding the various inventory management terms and features is crucial. One such term that sellers encounter is “Reserved Inventory.” In this comprehensive guide, we will delve into the concept of Reserved Inventory on Amazon, its significance, and how sellers can optimize its use to enhance their overall selling experience on the platform.
What is Reserved Inventory?
Reserved Inventory refers to a portion of a seller’s stock that is set aside or reserved for specific purposes on Amazon. It represents units that are not currently available for regular sale, as they are allocated for specific programs or events, such as promotions, deals, subscriptions, or future orders. These reserved units are typically earmarked for specific customers or groups.
Why Does Amazon Reserve Inventory?
Amazon reserves inventory for various reasons, to enhance the customer experience and support sellers in effectively managing their operations. Let’s explore some of the primary reasons why Amazon employs reserved inventory:
- Promotions and Deals: Amazon reserves inventory for special promotions, such as lightning deals, holiday sales, or Prime Day. This ensures that sellers can participate in time-limited events and offer discounts to attract customers, without risking stockouts.
- Subscription Services: Amazon offers subscription-based programs like Subscribe & Save. To fulfil recurring orders for subscribers, Reserve inventory is to guarantee availability and maintain customer satisfaction.
- Pre-Orders: Sellers often make their products available for pre-order before their official release. In such cases, Amazon reserves inventory to fulfil these orders promptly once the product becomes available.
- Amazon’s Own Programs: Amazon may reserve inventory for its exclusive programs, such as Vendor Central, Amazon Fresh, or Amazon Business. These programs require specific stock allocation to cater to their unique requirements.
- Fulfilment Network Optimization: Reserved inventory plays a crucial role in managing Amazon’s fulfilment network. It helps balance stock across various fulfilment centres to minimize shipping distances and ensure efficient order fulfilment.
How Does Reserved Inventory Work?
To manage reserved inventory effectively, sellers must understand how it works within Amazon’s ecosystem. The following are below factors:
- Allocation: Sellers can allocate a specific number of units as reserved inventory within their seller central account. We can do this using inventory management tools or by utilizing specific programs like Amazon’s Early Reviewer Program or Vine.
- Expiration: Reserved inventory may have an expiration date, depending on the program or event.. Sellers should closely monitor the expiration dates and take necessary actions to avoid losing their reserved units.
- Impact on Stock Levels: Reserved inventory does not affect a seller’s available quantity visible to customers. It subtracts from the overall stock count but does not impact the Buy Box eligibility or product listing visibility.
- Tracking and Reporting: Amazon provides sellers with reports and tools to track their reserved inventory. These reports offer insights into the utilization, expiration dates, and overall performance of the reserved units.
Optimizing Reserved Inventory for Sellers
To make the most of reserved inventory on Amazon, sellers can follow these best practices:
- Plan Ahead: Align your inventory planning with anticipated events, promotions, or subscription orders. This will allow you to allocate the appropriate quantity of reserved inventory and ensure availability when needed.
- Monitor Expiration Dates: Regularly review the expiration dates of your reserved inventory. Take proactive steps to utilize or extend the reserved units to avoid any loss or missed opportunities.
- Leverage Performance Reports: Utilize Amazon’s reporting tools to gain insights into the performance of your reserved inventory. Analyze the impact of promotions, deals, or subscriptions on your sales and make informed decisions based on the data.
- Consider FBA and FBM: Understand the fulfilment options available to
you as a seller. Fulfilment by Amazon (FBA) and Fulfillment by Merchant (FBM) offer different advantages when it comes to managing reserved inventory.
- FBA: If you use FBA, Amazon takes care of the storage, packaging, and shipping of your reserved inventory. This can be beneficial, especially during high-demand periods or when dealing with large quantities of reserved units. FBA also ensures faster and more reliable fulfilment, which can improve customer satisfaction.
- FBM: With FBM, you handle the storage, packaging, and shipping of your reserved inventory. This gives you more control over the fulfilment process and can be cost-effective for certain products or situations. However, it’s essential to have efficient inventory management and fulfilment capabilities to handle reserved inventory effectively.
- Communicate with Customers: If you have reserved inventory dedicated to specific customers or groups, communicate clearly with them about the availability and expected delivery dates. This proactive approach can build trust, reduce inquiries, and enhance the overall customer experience.
- Optimize Pricing Strategy: When leveraging reserved inventory for promotions or deals, carefully consider your pricing strategy. Balancing competitive pricing with profit margins is crucial to drive sales while maintaining profitability.
- Collaborate with Amazon: If you’re uncertain about the best approach to manage reserved inventory or need guidance, don’t hesitate to reach out to Amazon’s Seller Support or utilize their resources and training materials. Amazon’s support team can provide insights and recommendations tailored to your specific needs.
Reserved Inventory on Amazon plays a vital role in supporting sellers in managing promotions, deals, subscriptions, and other special programs. By understanding how reserved inventory works and optimizing its use, sellers can maximize their sales opportunities, enhance customer satisfaction, and streamline their inventory management processes.
Remember to plan ahead, monitor expiration dates, leverage performance reports, and consider the fulfilment options available to you. Effective utilization of reserved inventory can give you a competitive edge, boost your sales, and contribute to your overall success as an Amazon seller.
If you stay proactive, responsive and informed about Amazon’s reserved inventory features, sellers can navigate the platform more effectively, adapt to market demands, and achieve their business goals.