Strategic Inventory Planning for the Holiday Shopping Rush

Presenters

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Danny Shaw

Head of ProductWebgility

Director of Business DevelopmentSkuVault

Rob McGrorty

Jeff Coleman VP of Marketplace Channels

CPC Strategy

Housekeeping

• Everyone is set on mute• Questions can be submitted via the question box • If we can’t get to your question, we follow up after the

webinar• We will email the webinar recording to all registrants• Slides and other PDFs in the handouts panel• We’ll be sharing other resources as well during the webinar

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Agenda

• Introductions• Understanding where you are today• Strategic inventory management for the holidays• FBA Fees – are you prepared? • Deep dive into historical data• Financial intelligence for Amazon sellers• Q&A

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About CPC Strategy

We Drive Conversions by Matching Retail Inventory With Consumer Intent.

Offering a focused suite of retail advertising services, CPC Strategy is an elite Retail Search agency that specializes in driving performance growth on the channels that most directly impact a retailer’s digital bottom line. With over 350 clients and over 75 million dollars of ad spend under management, we know a thing or two about what drives success in online retail

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SOLUTIONS• Retail-Focused Paid Search (PPC)• Google Shopping Management• Shopping Channel Management• Amazon Sales Acceleration

About Webgility

Unify connects all of your sales channels with your accounting and integrates with industry leaders in shipping, inventory management, marketing automation, and point of sale so you can optimize operations for your whole business. We lead the industry in service and have thousands of happy customers to prove it.• Solutions for multi-channel e-commerce businesses to streamline operations and

scale• Compatible with 80+ e-commerce platforms, including Amazon, eBay, QuickBooks,

Xero• Help our customers process 2.5M orders each month, saving $7.6M and 352,400

hours6

About SkuVault

SkuVault is a cloud-based inventory & warehouse management system system that’s designed to work with your warehouse, not against it. Real-time quantity syncs prevent out-of-stocks, barcoding and QC reduce picking and shipping errors, our smart re-order reports ensure that your purchasing decisions are backed by hard data, and our integrations streamline processes for our e-commerce merchants.Our clients on average decrease out-of-stocks by 10x, reduce labor costs by 30%, and reduce fulfillment time by 87%.

• Inventory Management• Product Catalog• Kitting & Bundling• Barcoding• Multiple Locations & Warehouses• Physical & Cycle Counts• Advanced Reporting

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• Real-Time Quantity Syncs• Buffers• Basic & Wave Picking• Quality Control• Supplier Management• Forecasting & Re-Ordering• Purchasing & Receiving

Where Are You Today?

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Today’s E-commerce Landscape

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Apps don't work well together

● Too many choices● Need multiple

apps to solve problems

● Integration is painful

● Expensive

Operational tasks

are manual

● Shipping● Inventory

management● Order

management● Fulfillment● Accounting

... and more

Analysis is difficult

● Information is scattered

● Data is inaccurate

● Difficult to stay compliant

It’s hard to get everyone aligned

● Distributed teams● Disparate apps● Collaboration is

difficult● No agility

Poll

•What fulfillment method(s) do you use? Check all that apply:

•In-house•Seller Fulfilled Prime•Fulfillment by Amazon• Drop-ship•Third party logistics

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Keeping Your Inventory Accurate

Stock Takes

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Stock Takes: Physical Counting

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What is Physical Counting?• Entails an exhaustive, annual audit• Involves all physical items of

inventory in a facility• Counts each item one at a time• Halts all production, unlike a cycle

count which can be performed as a daily task

The Purpose:• To account for any inventory

discrepancies that aren’t picked up in cycle counts

• To rectify misappropriated quantities.

Stock Takes: Cycle CountingWhat is Cycle Counting?• Perpetual form of inventory auditing procedure• Audit of a smaller subset of your inventory in a specified location on a

specified day• Dependent upon the amount of inventory in stock, could take

anywhere from a week to several months

The Purpose• Accounts for discrepancies between the quantities you should have

(and in e-commerce, these are the quantities available for purchase on your online marketplaces) and the quantities that are actually physically present in your warehouse

• Maximizes the value of the audit and minimize the pain of the physical count by performing at least 4 full cycle counts per year

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Stock Takes: Physical & cycle Counting

Best Practices• Do your full physical inventory count the first week of November. Most e-commerce

merchants are going into the busiest time of their year, and their inventory must be up to date

• Conduct more cycle counts, fewer physical counts. We recommend:• 4 cycle counts/year• 1 physical count/year

Benefits of This Model• Fewer labor hours and tedious manual processes associated with physical counts• Fewer oversells, undersells, and unaccounted for/unlisted inventory• Maintains accurate inventory levels across your channels

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Reordering, Forecasting, and Buffers

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Reordering, Forecasting, and Buffers ReorderingSet reorder points going into the holidays to help your purchasing team know when to reorder new product, so that you don't run out when you need it most. During the holidays it can be a challenge to know when & what to reorder:

• For suppliers with a longer lead time, make larger orders• For suppliers with a shorter lead time, order fewer quantities more frequently, so that your

capital isn’t tied into inventory

ForecastingUse your sales history, along with your percentage of sales increase over the year, to understand what to reorder.  

BuffersMake sure to set minimum quantity buffers, so as to not oversell. Sales can come in faster during the holidays than most integrations can support.

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Quality Control

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Quality Control

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Quality control drastically reduces customer service costs, eliminating customer service issues such as:

• Mis-picks• Mis-ships• Damaged items• Incorrectly listed items

These kinds of issues can be eliminated before the order ever even leaves your warehouse. Happier customers mean:

• Better marketplace feedback• A more enthusiastic and responsive customer base• Better search rankings & visibility• More sales

Phew! Imagine how reducing the number of angry customers could help morale, sales, and your bottom line, especially during peak season.

Are You Prepared?

FBA Fees Increase

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FBA Fee Increase

Changes that Matter: Holiday Storage and Handling• Holiday storage costs going

• up 2x for oversize• up 3x for non-oversize

• Handling Costs • Down an average of 14%

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FBA Fee Increase

What to do?• Qualify for Featured Merchant, then Merchant-

Fulfilled Buy-Box• Plan FBA Replenishment as “JIT*”• Lean towards high-margin products with low

competition and small physical footprint21

Poll

•Where are you currently selling? Check all that apply

•Amazon •Other marketplaces •Own website •Brick-and-mortar •Wholesale

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Deep Dive – Historical Data

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Why Does E-commerce Breed Chaos?

It’s not your imagination.• Virtual marketplaces and selling platforms • Evolving data standards• New sales and fulfilment approaches• Multiple systems with disparate data• Plethora of apps • Most owners have no expertise in accounting, analytics,

operations, or logistics24

Signs You Need Help

• Do you have a pulse on your business financial health?• Are you in control of your margins?• Do you have the levers to scale your business?• Are you sitting on a pile of spreadsheets?• Do you know where your bottlenecks are?• Are your customers coming back for more?

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Adjustments Must Be Made

What’s preventing you from making necessary changes?

• You have non-integrative systems (stores, marketplaces, apps, software)

• You can’t afford downtime• You have no budget for marketing or infrastructure

growth • You have no time or energy to plan or strategize

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Integrate, Streamline, Automate

Make workflows more efficient• Find tools that aid collaboration• Leverage business systems that are

already integrated and working together

• Use applications that improve the flow• Sell on channels that complement

each other• Create a data-focused culture

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Know Your Inventory KPIs

Financial Intelligence

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Total Average Order Value

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Plan discount initiatives, set free shipping parameters, track the value of a new or returning customer more effectively, and project the

number of new orders you’ll need to hit your revenue targets

Average Order Profit

Helps to visualize the average profit your business generates on each order in a more logical way,

which helps you plan better and gives you more power for negotiating

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Gross Profit of Each Item

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Helps you prioritize vendor orders, keep an eye on inventory, and (most importantly) identify the right products to push versus those that are not worth it for you to sell

Top-Selling Products

Helps to understand what items are flying off the shelf the fastest to make sure there are enough of these top items on-hand during the holidays.

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Inventory Days to Zero

Avoid overselling, which puts you at risk of unhappy customers and bad reviews

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Q & A

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Danny Shaw

Head of ProductWebgility

Director of Business DevelopmentSkuVault

Rob McGrorty

Jeff Coleman VP of Marketplace Channels

CPC Strategy