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Jungle Scout's Million Dollar Case Study - Inventory Management

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Learn the strategies to maintain Inventory Management, and maximize profits and healthy cash flow!

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Jungle Scout's Million Dollar Case Study - Inventory Management

  1. 1. THE MILLION DOLLAR CASE STUDY Session #22: Inventory Management Best Practices Journey to $1MM July 26th, 2017 100% toJeremy Biron – Founder @ Forecastly
  2. 2. If you’re enjoying the MDCS - please help us out! Can we get a little love?
  3. 3. Mandy Love (JS T-Shirt Winner) My most difficult is starting with zero knowledge of selling on Amazon. Amazon is constantly changing their terms. Even with their support one person will help you with something and the next person will tell you it can't be done. The key is to keep trying. I make a lot of mistakes and learn from those mistakes. I am starting soon. My country is not listed among countries who can sell on Amazon so that has been a challenge. I am currently in the US just to register a company here and get a bank account. I hope the EIN will be out and the bank account will be open before I leave on the 14th July. What has been the most difficult part of Amazon FBA? Kenneth Nkwonta (Standard Web App) Session 21 Giveaway Winners Devon Monroe (JS T-Shirt Winner) I have started! Most difficult part is overcoming my own self doubt. I know without a doubt I'll be successful with all the tools and resources I have at my disposal. Thank you Jungle Scout team!
  4. 4. Session 22 GIVEAWAY : Win a Pro Extension or a T- Shirt ▸ HOW TO ENTER Use this Link to Enter our Giveaway www.junglescout.com/giveaway The link will also be in the Video Description of the Replay on YouTube and Our Facebook Page ▸ 2 Winners, 1 Prize for Each ! ▹ 1 Pro Extension ▹ 2 Jungle Scout T Shirt’s ▹ Featured on the Website! ▸ Winners selected every week for all of 2017!
  5. 5. Agenda ▸ Why should we care? ▸ Basic Concepts ▸ MDCS Example ▸ Additional Tips ▸ Free Tools
  6. 6. • Hundreds of Amazon seller accounts analyzed • Sold on Amazon for almost 10 years
  7. 7. “Why should we care? ▸ New Products vs. Existing Products ▸ Profitability ▸ Cash Flow
  8. 8. Lead Time ▸ Jungle Snugs ▹ Manufacturing: 30 Days ▹ Sea Freight: 35 Days ▹ Total: 65 Days ▸ Considerations: ▹ Likelihood of Manufacturing Delays ▹ Ground Shipping in U.S. ▹ Packaging/Shipment Prep. Time ▹ Customs
  9. 9. Safety Stock “Buffer” Educated Guessing Cash vs. Lost Sales 9 Calculating Number of Extra Days Percentage Extra Jungle Snugs Long Lead Time Limited Sales Data
  10. 10. Sales Velocity Past 30 Days9.8 Per Day (0 Days Out of Stock) Past 60 Days7.23 Per Day (8 Days Out of Stock) 10
  11. 11. Seasonality Every Product has Seasonality Google Trends Can’t Easily See Q4 Bump 11
  12. 12. Final Calculations – Reorder Point Current Inventory: 537 Inbound: 0 Safety Stock: Reorder Point w/o Safety = 65 Days * 9.8 Sales Per Day = 637 Safety Stock = 637 * .25 = 159 True Reorder Point = 796
  13. 13. Final Calculations – Projected Stock-Out ▸ When to reorder? ▹ Current Inventory: 537 ▹ Inbound: 0 ▹ Safety Stock: 159 ▸ (537 – 796) ÷ 9.8 = -26 Days ▸ Not Necessarily 26-Day Stock-out
  14. 14. Final Calculations – Quantity ▸ Inventory Gone Before Arrival ▸ 13 Weeks Until Next Order (Post Arrival) ▸ Days of Inventory + Lead Time = 156 ▸ 156 * Sales Velocity = 1,529 ▸ 1529 + Safety Stock = 1688 Units
  15. 15. Additional Tips ▸ Return on Investment (ROI) ▸ Sea vs. Air ▸ Product Segmentation ▸ Plan Ahead ▸ Know Your Assumptions ▸ Value Your Time
  16. 16. Inventory Tools - Free Download https://fcst.ly/mdcs Amazon Seller Calendar FBA Replenishment Calculator
  17. 17. August 2nd, 2017 10a PDT /1p EDT / 6p BST Amazon Product Research, EUROPE! If you haven’t already, register at junglescout.com/million Join us next week! San Francisco New York London

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