Amazon Vendor Inventory Storage Strategy Optimisation

Reduce storage costs and improve inventory turnover through strategic storage optimisation.

Storage costs represent one of the largest warehousing expenses for Amazon vendors, yet most approach storage reactively rather than strategically. Inventory accumulates in warehouses without systematic analysis of storage efficiency, turnover optimization, or strategic placement decisions. Slow-moving products consume expensive storage indefinitely whilst fast-movers are inefficiently slotted. Poor inventory management creates storage waste costing 20-40% more than optimised strategies would require.

Our Inventory Storage Strategy service analyses complete inventory profiles, optimises storage allocation and slotting, implements turnover improvement strategies, and recommends SKU rationalisation for chronic slow-movers. This comprehensive approach typically reduces storage costs by 20-35% whilst improving inventory availability for high-velocity products.

For Finance Directors concerned about working capital tied up in inventory and operations managers seeking storage efficiency, our strategic approach transforms inventory management from cost centre to competitive advantage.

Key Takeaways

ABC Analysis & Strategic Slotting: We segment inventory using ABC analysis (high-value/high-velocity A items, medium B items, low C items) and optimise storage slotting accordingly. Fast-movers are positioned for efficient picking; slow-movers are placed in less expensive storage locations. This strategic slotting reduces handling costs whilst maximising storage density.

Inventory Turnover Optimisation: We analyse turnover rates by SKU, identify slow-movers consuming disproportionate storage, and implement strategies to improve velocity or exit chronic underperformers. Improving average inventory turns from 4X to 6X annually can reduce storage requirements by 30-40%.

Multi-Location Storage Strategy: Vendors serving multiple Amazon regions often benefit from strategic inventory placement across locations rather than centralised storage. We model optimal inventory distribution that balances storage costs, shipping expenses, and service levels.

Obsolete Inventory Identification: Slow-moving inventory eventually becomes obsolete, representing both storage cost and capital waste. We systematically identify obsolete stock, recommend liquidation strategies, and implement processes to prevent future obsolescence accumulation.

Seasonal Storage Planning: Vendors with seasonal demand patterns require flexible storage strategies that minimise fixed costs whilst accommodating peak inventory levels. We model seasonal storage requirements and recommend flexible arrangements that avoid paying for unused capacity year-round.

The Problem

Inefficient Storage Allocation: Without systematic slotting strategies, fast-moving products often end up in inefficient locations requiring excessive travel time, whilst slow-movers occupy prime picking positions. This inefficiency wastes labour and storage resources simultaneously.

Slow-Moving Inventory Accumulation: Many vendors indefinitely store slow-moving inventory hoping it will eventually sell, consuming expensive storage whilst tying up working capital. This "hope-based" inventory management destroys both storage efficiency and capital returns.

Over-Inventory From Poor Forecasting: Inaccurate forecasting leads to over-inventory positions that consume unnecessary storage. Vendors maintain safety stock based on outdated assumptions or fear of stockouts, resulting in 30-50% more inventory than optimal levels require.

Obsolete Inventory Waste: Eventually slow-movers become obsolete through product discontinuations, seasonality, or competitive obsolescence. Vendors delay liquidation decisions, allowing obsolete inventory to consume storage indefinitely whilst losing more value through aging.

Our Process

Step 1: Inventory Profile Analysis

We analyse complete inventory profiles including turnover rates, velocity patterns, seasonal factors, value concentration, and storage requirements. This diagnostic reveals inventory characteristics driving storage costs and identifies optimization opportunities.

Step 2: Strategic Slotting & Placement Optimisation

We design optimal storage strategies using ABC segmentation, implement efficient slotting for high-velocity items, place slow-movers in lower-cost storage, and model multi-location strategies for regional distribution. Implementation plans include reslotting execution and performance metrics.

Step 3: Turnover Improvement Initiatives

We identify slow-moving inventory requiring intervention: pricing adjustments to accelerate sales, marketing focus to improve velocity, or liquidation for chronic underperformers. We also address forecasting improvements that prevent future over-inventory situations.

Step 4: Ongoing Inventory Optimization

We establish inventory monitoring dashboards, implement regular ABC review processes, and create systematic obsolescence identification procedures. This ongoing management sustains storage efficiency and prevents inventory inefficiency from degrading over time.