Jungle Scout's Million Dollar Case Study - Inventory Management
THE MILLION DOLLAR CASE STUDY
Journey to $1MM
July 26th, 2017
100% toJeremy Biron – Founder @ Forecastly
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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
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
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Kenneth Nkwonta (Standard Web App)
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Devon Monroe (JS T-Shirt Winner)
I have started! Most difficult part is overcoming my own
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all the tools and resources I have at my disposal. Thank
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▸ Why should we care?
▸ Basic Concepts
▸ MDCS Example
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• Hundreds of Amazon seller accounts analyzed
• Sold on Amazon for almost 10 years
“Why should we care?
▸ New Products vs. Existing Products
▸ Cash Flow
▸ Jungle Snugs
▹ Manufacturing: 30 Days
▹ Sea Freight: 35 Days
▹ Total: 65 Days ▸ Considerations:
▹ Likelihood of
▹ Ground Shipping in U.S.
▹ Packaging/Shipment Prep.
Cash vs. Lost
Number of Extra Days
Long Lead Time
Limited Sales Data
Past 30 Days9.8 Per Day (0 Days Out of Stock)
Past 60 Days7.23 Per Day (8 Days Out of Stock)
Every Product has Seasonality
Can’t Easily See Q4 Bump
Final Calculations – Reorder Point
Current Inventory: 537
Reorder Point w/o Safety = 65 Days * 9.8 Sales Per Day = 637
Safety Stock = 637 * .25 = 159
True Reorder Point = 796
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
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
▸ Return on Investment (ROI)
▸ Sea vs. Air
▸ Product Segmentation
▸ Plan Ahead
▸ Know Your Assumptions
▸ Value Your Time