Key takeaways:
- Amazon inventory management requires real-time synchronization across Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM) to prevent stockouts and overselling.
- Strong forecasting and automated replenishment help protect account health and maintain sales velocity.
- Multichannel sellers need centralized visibility across warehouses, third-party logistics (3PLs), and marketplaces.
- The best Amazon inventory management software reduces manual work while improving accuracy and scalability.
Amazon inventory management software, often called an inventory management system (IMS), centralizes stock control, forecasting, and synchronization across sales channels. For Amazon sellers, this software must account for FBA, FBM, strict performance metrics, and constantly changing stock statuses.
In this article, we break down why Amazon inventory management is uniquely complex, the most common inventory problems sellers face, how to solve them, and what to look for when choosing the best inventory management software for Amazon.
Why Amazon inventory management is so complex
Amazon moves fast. Inventory levels shift by the minute, orders flow in around the clock, and performance metrics are closely monitored. Unlike smaller marketplaces, Amazon directly ties operational precision to account health, Buy Box eligibility, and long-term ranking. That means inventory mistakes carry real consequences.
Most sellers do not operate with a single stock location and a simple fulfillment model. Many balance FBA with FBM, sometimes across multiple warehouses or third-party logistics providers. Inventory can be available, reserved, inbound, stranded, or unsellable at any given time. Without centralized visibility, it becomes difficult to know what is truly available to sell.
As a business grows, complexity increases. More SKUs, more channels, and higher order volume put pressure on manual workflows. What once worked in a spreadsheet starts to create delays and discrepancies. Amazon rewards consistency and speed, so sellers need systems that can keep pace without creating risk.
Common Amazon inventory management problems (and how to fix them)
1. Stockouts that kill ranking
When a product goes out of stock, Amazon’s algorithm may lower its organic ranking due to lost sales velocity. This can reduce visibility, weaken Buy Box competitiveness, and make it harder to regain momentum once inventory is restored.
How to reduce stockouts:
- Use historical sales data for demand forecasting.
- Monitor sell-through rates and lead times.
- Set automated reorder points.
- Track inbound FBA shipments closely.
Strong forecasting tools help you replenish inventory before velocity drops.
2. Overselling and canceled orders
Overselling results in canceled orders, which signal poor inventory control to Amazon. For FBM sellers, frequent cancellations increase the Order Defect Rate (ODR), damage seller performance metrics, and may reduce Buy Box eligibility or account standing over time.
This often happens when:
- Inventory updates lag across systems.
- Multiple channels sell the same SKU.
- Warehouse counts are inaccurate.
Solution: Centralize inventory control in one system that pushes quantity updates in real time to Amazon and other marketplaces.
3. FBA and FBM inventory confusion
Managing both fulfillment models adds operational complexity because FBA inventory can become reserved, stranded, or delayed in transit, while FBM inventory must consistently meet strict shipping service level agreements.
At the same time, transfers between warehouses and FBA centers require careful tracking to prevent discrepancies and unexpected stock gaps.
To reduce confusion, you need visibility into:
- Available vs. reserved stock.
- Inbound FBA quantities.
- Sellable vs. unsellable units.
Without this, forecasting and replenishment decisions become guesswork.
4. Poor forecasting and excess inventory
Purchase order (PO) workflows are just as important as forecasting accuracy. Once demand is projected, sellers need a reliable way to generate, approve, and track purchase orders tied to supplier lead times.
Automated PO creation based on reorder thresholds reduces delays, improves supplier coordination, and ensures inbound inventory aligns with expected sales velocity. Without structured PO workflows, even accurate forecasts can fail in execution.
Advanced forecasting tools can:
- Analyze historical sales trends.
- Factor in seasonality.
- Account for supplier lead times.
- Trigger automated purchase orders.
This reduces dead stock while protecting sales velocity.
5. Limited visibility across warehouses
If you operate multiple warehouses or use a 3PL provider, inventory can become fragmented across locations, making it difficult to know exactly where stock is stored, what is available to sell, and how quickly it can be fulfilled without centralized, location-level visibility.
A warehouse management system (WMS) can support:
- Bin-level tracking.
- Barcode scanning.
- Cycle counting.
- Real-time stock updates.
If you are unsure how warehouse management fits into inventory strategy, read our guide on OMS and WMS: Which Do I Need for My Ecommerce Business?
How to choose the best inventory management software for Amazon
Not all inventory management systems are built for Amazon’s demands. When evaluating options, focus on capabilities, not branding.
1. Native Amazon integration
Your system must connect directly to Amazon’s application programming interfaces (APIs) for:
- Real-time quantity updates.
- FBA shipment tracking.
- Order syncing.
- Listing data management.
Delayed sync increases the risk of overselling.
2. Real-time multichannel synchronization
Many Amazon sellers expand beyond a single marketplace to diversify revenue and reduce platform risk, listing the same SKUs across Walmart, Shopify, TikTok Shop, eBay, and other channels to capture more customers and increase overall sales volume.
Look for software that:
- Updates inventory across all channels instantly.
- Prevents double-selling.
- Centralizes order visibility.
This becomes critical as SKU count increases.
3. Automation that reduces manual work
Manual workflows require teams to monitor inventory, create purchase orders, and update listings by hand, which increases errors and slows response time. As order volume grows, these inefficiencies compound, limiting scalability and straining operational capacity.
The best systems automate:
- Purchase order creation.
- Reorder alerts.
- Order routing.
- Carrier selection.
- Inventory allocation.
Automating your ecommerce workflows speeds up processes, reduces errors and the need to increase headcount, and frees your team to focus on strategy.
4. Forecasting and replenishment tools
Without forecasting, inventory decisions rely on guesswork and recent sales spikes rather than long-term demand patterns. This reactive approach increases the risk of stockouts, excess inventory, and misaligned purchase orders that disrupt cash flow and sales consistency.
Look for:
- Historical sales analysis.
- Lead time tracking.
- Safety stock calculations.
- Automated replenishment workflows.
Forecasting is especially important for FBA, where restock delays can take weeks.
5. Warehouse and returns management
Amazon sellers must also reconcile FBA inventory regularly to account for lost, damaged, or misclassified units. Without systematic reconciliation, discrepancies between recorded and actual inventory can distort forecasting and delay reimbursement claims.
Strong inventory systems help track returns by condition, monitor adjustments, and ensure that sellable stock levels remain accurate.
Your inventory management software should be able to:
- Track returns by reason code.
- Reconcile damaged or unsellable FBA units.
- Maintain accurate warehouse counts.
Returns directly affect available inventory.
What is the best inventory management software for Amazon?
There is no single best inventory management software for Amazon sellers because every business operates differently. A private label brand with a focused SKU catalog will have very different needs than a reseller managing tens of thousands of products across multiple warehouses.
The right solution depends on how complex your operation has become. If you only sell on Amazon and manage a modest catalog, you may prioritize forecasting accuracy and FBA visibility. If you sell across multiple marketplaces, real-time multichannel synchronization becomes critical. High-volume sellers often need automation that reduces manual purchasing, allocation, and routing decisions.
Strong Amazon inventory management software typically centralizes inventory control, syncs quantities in real time, and supports forecasting based on historical sales trends. It should also integrate smoothly with Amazon’s APIs to avoid listing delays or quantity mismatches.
One example is Descartes Sellercloud™, an all-in-one ecommerce operations platform that centralizes inventory, orders, listings, and warehouse management. Amazon sellers use the platform to maintain real-time visibility across FBA and FBM, automate purchase order workflows, and synchronize inventory across multiple channels. When evaluating any solution, focus on whether it solves your specific operational challenges and supports long-term growth.
When is it time to upgrade your Amazon inventory system?
Most sellers do not wake up one day and decide to replace their inventory system. The need usually builds gradually.
You might start noticing that inventory counts are harder to trust. Overselling may become more frequent. Forecasting begins to feel reactive instead of planned. FBA restocks may arrive too late because demand was underestimated or supplier lead times were not factored in properly.
Another common sign is team strain. If scaling requires hiring more staff just to manage spreadsheets, update listings, or create purchase orders manually, your system may limit growth. Operational complexity should not automatically require more headcount.
Upgrading becomes less about adding features and more about reducing risk. A centralized system with automation and real-time visibility helps protect account health and supports growth without operational chaos.
Final thoughts: take control of Amazon inventory before it controls you
Amazon inventory management is not just about knowing how many units you have in stock. It influences ranking, customer satisfaction, cash flow, and long-term profitability. Small inventory errors can quickly become expensive problems.
The sellers who scale successfully tend to prioritize visibility and automation early. They invest in systems that reduce manual work, improve forecasting accuracy, and provide clear insight into FBA and FBM performance.
If your current tools are holding you back, it may be time to reassess your approach. With the right inventory strategy in place, you can protect your margins, maintain account health, and grow with confidence.
Sellercloud is the ideal ecommerce solution not only for Amazon sellers but also for sellers looking to expand their operations to new marketplaces.
- CPGIO, a high-volume 3PL, centralized inventory and order workflows with Sellercloud to scale without adding operational strain.
- Crystal Art Gallery gained clearer visibility across more than 500,000 SKUs and multiple Amazon accounts, improving inventory accuracy.
- Golf Superstore replaced disconnected systems with one platform, reducing listing delays and tightening inventory synchronization between ecommerce and in-store operations.
In each case, better visibility and automation helped manage growing complexity.
Watch the video below to learn about the many multichannel challenges Descartes Sellercloud solved for Pet Wish Pros.
Ready to transform your Amazon inventory management? Book a demo and see how Sellercloud delivers the visibility, automation, and scale your business needs.
Amazon inventory management FAQs
What is safety stock in Amazon inventory management?
Safety stock is a buffer quantity kept on hand to prevent stockouts caused by demand spikes or supplier delays. Calculating safety stock properly helps protect sales without overcommitting cash to excess inventory.
Can poor inventory management affect Buy Box eligibility?
Yes. Frequent stockouts, order cancellations, and late shipments can reduce seller performance metrics. Strong metrics improve your chances of winning and maintaining the Buy Box.
What is the Amazon inventory performance index (IPI)?
The Inventory Performance Index (IPI) is Amazon’s score that measures how efficiently you manage FBA inventory. It considers factors such as excess inventory, sell-through rate, stranded inventory, and in-stock performance. A low IPI score can limit your FBA storage capacity.
How often should Amazon sellers reconcile FBA inventory?
Sellers should reconcile FBA inventory regularly, ideally monthly. This helps identify lost, damaged, or miscounted units and ensures reimbursement claims are submitted within Amazon’s required timeframes.
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