FBA inventory allocation for multi-SKU products is a key step in balancing replenishment efficiency, warehousing costs, and sales conversion. It requires dynamic adjustments based on product characteristics, sales data, and platform rules.
In this article, Weefreight will discuss scientific allocation logic and techniques for avoiding deadstock to help achieve healthy inventory turnover.
- Scientific FBA Inventory Allocation Logic for Multi-SKU Products
The core of inventory allocation is “demand-based allocation and dynamic adaptation.” Strategies should be formulated around three dimensions: sales priority, warehousing efficiency, and risk control to avoid inventory imbalances caused by single-dimensional decisions.
- Tiered Allocation by SKU Sales Tier, Focusing on Core, High-Selling Items
First, use Amazon’s Inventory & Sales Reports or third-party tools (such as Helium 10 or Jungle Scout) to categorize all SKUs into three tiers based on sales over the past 30-90 days. Then, assign different inventory allocation weights:
Core, High-Selling Items (Top 20% SKUs): These SKUs contribute approximately 80% of sales and require sufficient inventory to avoid stock-outs. The allocation strategy is to “cover 15-30 days of sales + a safety stock buffer,” with priority allocated to Amazon’s core fulfillment centers (such as warehouses near core consumer areas) to shorten delivery times. If a product experiences seasonal fluctuations, historical sales growth rates should be factored in (e.g., stocking 1.5-2 times daily sales before peak season).
Stable, flat-selling SKUs (Mid 60%): These products have medium sales with minimal volatility. Allocation is based on “covering 7-15 days of sales,” eliminating the need for a significant buffer. A “centralized + decentralized” model can be employed: 60% of inventory is allocated to core warehouses to ensure timely delivery, while 40% is allocated to secondary warehouses to distribute inventory pressure and avoid a shortage of replacement inventory in the event of a single warehouse out-of-stock.
Long-tail, slow-moving SKUs (Bottom 20%): These products have low and volatile sales (e.g., monthly sales of <5 units). Allocation is based on “covering only 3-7 days of sales,” with priority given to non-core warehouses with lower storage costs. If these SKUs are “linked sales supplements” (e.g., accessories for a main product), allocation can be coordinated with the main product’s inventory level (e.g., if the main product has 100 units in stock, 30 accessories should be stocked at a ratio of 1:0.3).
- Combine “sales forecast + replenishment cycle” to accurately control quantity and avoid overstocking.
Inventory allocation is not a “one-time stocking” approach; it must be dynamically adjusted in conjunction with the replenishment cycle. The core formula is: Single-time allocation inventory = (average daily sales × replenishment cycle) + safety stock – current inventory in transit.
If the SKU is “locally sourced with a short replenishment cycle” (e.g., domestic shipments with a replenishment cycle of 3-7 days), safety stock can be compressed to 3-5 days of sales to avoid occupying excessive warehouse space.
If the SKU is “overseas sourced with a long replenishment cycle” (e.g., cross-border sea freight with a replenishment cycle of 30-60 days), safety stock should be increased to 10-15 days of sales and split into “batch” shipments (e.g., if a total of 30 days of sales is required, stock it in two batches, 15 days apart, to avoid a sudden oversupply).
For “seasonal SKUs” (e.g., Christmas decorations, summer swimsuits), a “small-batch trial run + incremental inventory buildup” strategy should be initiated 2-3 months before the peak season: 30 days of trial stock should be allocated first, and subsequent replenishment quantities should be adjusted based on sales growth to avoid a large number of unsold items after the peak season ends.
- Optimize inter-warehouse allocation efficiency using Amazon inventory tools
Official tools provided by Amazon can help reduce manual allocation errors and improve SKU turnover efficiency:
Amazon Remote Fulfillment (NARF): If a SKU is out of stock in warehouse A and has excess inventory in warehouse B, this tool can be used to redeploy inventory from warehouse B to the sales area covered by warehouse A, eliminating the need for re-shipment. This is particularly useful for filling inventory gaps between warehouses for flat-selling items.
Inventory Planner: Input data such as a SKU’s historical sales volume, replenishment cycle, and storage costs. The tool automatically calculates a “recommended allocation quantity” and provides alerts for “potentially out-of-stock/slow-moving SKUs,” reducing subjective judgment errors.
Multi-Channel Fulfillment (MCF): If some long-tail SKUs have excess inventory in FBA warehouses, they can be synced to multiple channels, such as independent websites and other platforms. This “cross-channel diversion” optimizes the FBA inventory share and avoids wasted storage fees.
- Core Techniques for Preventing Slow-Selling Items with Multiple SKUs
The root cause of slow-selling items is “inventory supply exceeding market demand.” This requires proactive management through product selection, inventory monitoring, and sales activation, rather than passively clearing out inventory after it becomes unsold.
- Strictly control the number of SKUs during the product selection phase to avoid blind expansion.
More SKUs isn’t always better; a “survival of the fittest” SKU selection mechanism should be established:
Before developing new products, verify demand through Amazon search volume and competitive SKU turnover rates. If more than 30% of competing SKUs have monthly sales of less than 10 units, demand for that specific segment is limited, and adding new SKUs should be avoided.
Implement a “quarterly elimination system” for existing SKUs: SKUs that rank in the bottom 10% of sales for two consecutive quarters and whose storage costs exceed sales should be removed from shelves or cleared out, allowing resources to be focused on dynamic sales.
Avoid over-segmentation of SKUs: For example, instead of offering the same style of T-shirt in 10 colors and 8 sizes, retain the core 3 colors and 5 popular sizes. Additional SKUs can be added based on sales data to reduce initial inventory pressure.
- Establish a dynamic inventory monitoring system to provide early warning of slow-moving items.
The key to slow-moving items is “early detection and early intervention.” A daily/weekly inventory monitoring mechanism should be established:
Core Monitoring Metrics: Focus on tracking three metrics: “Inventory Age (FBA Inventory Age), Sales Turnover Rate (30-Day Sales/Current Inventory), and Warehousing Cost Percentage.” If a SKU’s inventory age exceeds 90 days and its sales turnover rate is less than 30%, immediate intervention is required.
Setting Alert Thresholds: Use the “Inventory Alerts” feature in the Amazon backend to set thresholds for different SKU tiers. For example, “Inventory Less Than 15 Days of Sales” for core items triggers a restock alert, while “Inventory More Than 30 Days of Sales” for long-tail items triggers a slow-moving alert.
Linking Sales: Link slow-moving items with core, high-moving items (e.g., selling a “main product + accessories” combination, or using a slow-moving item as a “free gift” upon purchase). Leveraging the traffic from the core item can drive sales of the slow-moving item, reducing the likelihood of slow-moving items.
- Quickly activate slow-moving SKUs in the early stages to avoid dead inventory.
If a SKU shows signs of slow-moving inventory (e.g., no sales for 15 consecutive days, inventory age exceeding 60 days), activate it within one week to avoid continued storage fees:
Price Adjustment: Short-term price reduction to 5%-10% above cost, or offer coupons or discount codes, combined with Amazon “Lightning Deals” flash sales, to quickly boost sales.
Traffic Supplementation: Use Amazon on-site advertising (SP ads targeting precise keywords) and off-site social media promotion (e.g., Facebook groups, TikTok short videos) to boost traffic and exposure for slow-moving SKUs.
Inventory Splitting: If slow-moving SKU inventory is large, split it into “small-batch clearance + remaining inventory removal”: First, retain 30 days of sales in the FBA warehouse to try activation. The remaining inventory can be shipped back to the overseas warehouse or domestic warehouse via “Amazon removal orders” to avoid FBA inventory stagnation. Warehouses incur high long-term storage fees.
Bundling clearance items: Multiple slow-moving SKUs are combined into a “clearance package” and sold as a low-priced combo pack (e.g., “3 slow-moving items bundled at the same price as 1”). This approach is suitable for low-priced, small-volume SKUs (such as accessories and gadgets).
Summary
The core principles of FBA inventory allocation for multiple SKUs are “tiered focus, data-driven, and dynamic adjustment.” First, we prioritize inventory for core items based on sales volume, then optimize allocation efficiency through replenishment cycles and tools. Furthermore, we strictly control SKU quality from the product selection stage, mitigating slow-moving risks through real-time monitoring and early activation. Ultimately, we achieve a healthy inventory state with no shortages of core items, no overstocking of popular items, and no slow-moving long-tail items.
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