Do These 3 Things to Maximize Cash Flow, Inventory & Growth on Amazon

As an Amazon seller, the last thing you want is a disparity between cash flow and inventory. In other words, you don’t want to be cash poor and inventory rich OR cash rich and inventory poor.

Why? On one hand, your cash will be tied up in inventory that isn’t selling, while on the other hand, you risk an Amazon stockout before you’re able to replenish. In either case, you’re not selling at the same rate that you’re buying, your sales cycles will ebb and flow, and you won’t be in a position to scale your business.

Thankfully, you can prevent all this with our three-part plan to maximize cash flow, inventory management, not to mention long-term growth:

Part One: Find New & Creative Ways to Source Inventory

If you are cash poor and inventory rich, it could mean that you’re paying too much to source your products. If you’re cash rich and inventory poor, you may be selling the wrong product or using the wrong suppliers. Either way, you’ll need to do some troubleshooting to get things back on track.

Here are a few ways to get started:

• Shop Around: Do a price comparison across suppliers to make sure you’re getting the
  best deal on your product.
• Negotiate: See if your supplier would be willing to cut you a deal on unit price, shipping
  cost, or another production-related expense — depending on how long you’ve been
  working with them and/or if you can promise a certain amount and frequency of orders,
  they may be willing to work with you.
• Evaluate Product & Sourcing Method: Is there another way to source your product
  altogether? Or, should you consider an entirely different product that may require a
  different sourcing method? Consult a product research tool like Jungle Scout to see how
  your product ranks and/or if there are more promising alternatives.

Part Two: Know Your Sales Cycles & Plan Accordingly

As a retailer, you should expect to have busy and slow periods, not to mention a booming
holiday season. The important thing is to recognize when you usually make the most (and least) sales so you can plan ahead. In other words, study your sales velocity over the course of a year to get a sense for how much inventory (at a minimum) you should have on hand during a given month, then base your reorder quantities on that.

Another important component to plan ahead for is your selling price — more specifically, when and by how much to change it based on demand. Consider using a repricing tool like Repricer Express to help you set the right price at the right time so you can increase your chances of making sales.

By planning ahead for your inventory levels and pricing, you’ll always have the right amount of stock, make consistent sales, and maximize your margins.

Part Three: Get Consistent Cash Flow

Thanks to Amazon’s payment delay, cash flow is difficult to manage as a third-party seller — whether your cash rich/inventory poor, cash poor/inventory rich, or cash/inventory consistent. To help you maintain a reliable source of cash, consider signing up for Payability which pays you your Amazon income as you earn it.

Payability advances you 80% of your Amazon income one business day after making a sale. It’s not a loan, it’s your income in real-time. The remaining 20% stays in a reserve to cover returns and chargebacks and is released to you on Amazon’s regular 14 day schedule minus our 2% flat fee on gross sales.

According to Marketplace Pulse, Payability customers also seen an uptick in seller rank and
positive feedback from customers as a result of increase cash flow. For more on how Amazon sellers are growing with the help of Payability check out our customer reviews on TrustPilot and see how one Amazon seller uses Payability to maximize inventory management and cash flow. Like Payability on Facebook to keep up with updates and the latest Amazon seller news.

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