LSCM803 Procurement & Supply: Amazon's Inventory Management Case

This case study provides an overview of inventory management within Amazon.com, highlighting how the company has utilized inventory concepts to maintain competitiveness and profitability. It examines Amazon's strategic partnerships, policies for inventory administration, and the evolution of its inventory management practices. The study details how Amazon uses inventory to enable online shopping, improve delivery speed and quality control, and support sellers in managing their stock. It also explores different inventory templates, the benefits of outsourcing, and various stages of inventory management from initial virtual bookshop concept to building warehouses and partnering with distributors. The analysis emphasizes the importance of efficient planning, forecasting, and technology in Amazon's inventory operations, illustrating how these strategies contribute to customer satisfaction and overall business success. Desklib offers a wide range of similar solved assignments and study resources for students.

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AMAZON INVENTORY
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Table of Contents
Abstract............................................................................................................................................2
Introduction......................................................................................................................................2
How Amazon.com has utilized inventory.......................................................................................4
Use of different inventory templates............................................................................................5
Outsourcing..................................................................................................................................7
Development....................................................................................................................................8
Strategies followed by Amazon to manage its inventory............................................................8
Selling different production Amazon’s website...........................................................................9
Conclusion.....................................................................................................................................10
List of References..........................................................................................................................11
Appendix........................................................................................................................................13

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Abstract
In current society, internet usage has become the extremely popular space for business
companies to advertise and sell their commodities and services to different targeted customers.
This case study report provides the overview of inventory and its management within
Amazon.com. It is evident that Bezos Preston Jeffrey the originator of Amazon.com introduced
corporation in business society after understanding that internet offered huge range for online
exchanges. Although online platform was at first established as the store on online platforms for
different books, it ultimately presented various products to help in keeping side by side of the
business rivalry. This report examines diverse as well as features provided on the online
platforms. This report, furthermore, explores proposition values of Amazon along with its
principle for selecting strategic associates. It also collaborates examining the appropriate policies
embraced by Amazon for administration of its inventory. This paper illustrates how
Amazon.com uses inventory as one of essential tasks in its business operations. The need for
stocking too many products has been shown to be significant in reducing the margin of the profit.
Introduction
Amazon.com was launched by Preston Bezos Jeffrey back in the early days of 1995, and
it is currently considered as one of the most prominent retail website on the internet with the
record turnover of over fourteen billion in 2007. Ammazon.com remains to be the largest online
retailer around the globe. The company has different websites as well as product listings in
various nations that deal with the activities to sell their product6s to different targeted customers
or end users (Whitney 2018, p. 157). Management of inventory remains to be the backbone of
most retail business operations of Amazon.com. Appropriate management of inventory by

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Amazon.com has helped its operations in cutting down costs while streamlining business
processes. The company planned and managed their inventory better while selling products
through ideas of planning, sourcing, and storage inventories (Terry-Armstrong 2013, p. 3).
Therefore, this research paper has principal target that examines how Amazon.com has improved
its operations by implementation of management of inventory. The ideas presented below
explore how Amazon.com has utilized the concepts that inventory offer to keep the company to
remain competitive and high profitability during its operations in different markets.
It is clear that the founder of Amazon had the intention of creating the internet based
organization with the most dedicated as well as portfolio of product on the internet where
consumers could find anything that they might require at any period. The success of operations
of Amazon.com has been based on technology, products, and services (Segan 2018, p. 53).
Controlling inventory has remained to one of the toughest operational problems for operations of
different companies. With thirty-nine million active accounts for different customers along with
operational vision such as being “biggest selection of product globally,” the company has been
putting a lot of concentration to be as efficient as possible in management of inventory (Welcn
2011, p. 107). There has been a lot of evolution n that have occurred on management of
inventory of Amazon that has also resulted in various effects on operations and growth of the
company.
How Amazon.com has utilized inventory
Amazon.com uses management of inventory as a way of allowing customers to shop
online where they can choose among products owned by them at any time. The use of inventory
by the company has helped in increasing the number of customers as most clients are able to get

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products every time they need such products without necessarily having to go to shops by
themselves in various places (Bozer and Aldarondo 2017, p. 39). The use of inventory has helped
in providing Amazon.com with the tools that the customers can use for searching, viewing, as
well as updating product and listing information on every product on offers so as the targeted
client can view such data. Therefore, use of inventory by the company help in increasing the
speed of delivering products to different customers. It also has aid in improving the quality
control services that leads to improving customer experience and trust when requesting and
purchasing products from the company. Furthermore, Amazon inventory management has been
on the high end in helping the company sellers to keep their products in stock and sales flowing
(Henry 2017, p. 26). However, management of inventory within the Amazon.com involves more
than simply the process that deals with counting of products along with listing quantities in
Seller Central. Volume of different orders, cash flow, along with sales forecasting all perform the
function of inventory management and sellers always have the responsibility of mastering the
entire process to stay on the top of Amazon’s search listings together with drive sales.
Amazon.com utilizes the process of inventory by ensuring that their products are right for
Fulfillment by Amazon (FBA). Before process of listing products with FBA, management
ensures that they understand what can and what cannot be fulfilled in the process. The idea of
making sure that products are right start from Seller Central as it goes through to the Inventory
Tab before selecting Manage Inventory (Dvorak 2018, p. 147). The use of inventory allows
company to check the product that they need to ship to different fulfillment centers, select
‘Change to Fulfilled by Amazon’ from the drop-down menu, as well as follow the prompts to
change Amazon’s listings. The use of manufacturer barcode helps in tracking inventory as a way
of ensuring that Amazon.com remains to be competitive marketplace. Therefore, idea of

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planning inventory better by Amazon.com remain to be the general idea that help in matching the
company’s product supply with the expected demand in different places globally. The planning
of Amazon inventory in most cases is achievable or done through detailed forecasting along with
planning. In simple approach, Amazon.com as always the mandate to use the efficient plan of
their inventory better (Shahi and Pulkki 2015, p. 1321). For instance, Amazon Selling Coach can
aid in identification of inventory opportunities based on the company’s sales together with
current inventory information. The idea planning for inventory in the competitive marketplaces
is important in improving the operation of Amazon.com. Planning inventory by Amazon remains
to be the efficient approach that provides personalized suggestions that help in optimization of
company’s stock levels. It also helps the management to view their listing status and details on
the manage inventory page (Rajan and Marathe 2018, p. 863). The page help management of the
company to manage cases of inactive or out of stock listings for effective understanding of how
healthy their inventory is and how they can improve it during operations.
Use of different inventory templates
The use of different inventory templates is essential in improving operations of
Amazon.com. It helps in improving their operations to keep its competitive advantage and
remain highly profitable. One of the major merits that Amazon inventory as in its operations
remains to be the idea of helping the business organization to concentrate mostly on principal
activities as the strategy essential in reducing costs of operations (Shinn 2010, p. 19). Amazon
remains to be one of such corporations that require to be taking advantage of the benefits
associated with outsourcing of inventory. The use of product creation and matching during
inventory in Amazon can help in allowing online users to check if pages on different products
exist in Amazion.com catalog and thus they will have full information on the product on sale.

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Therefore, Amazon inventory management help in saving time and helping the company to grow
its business with such benefits that customers get from to use of online platforms. The use of
inventory has helped in ensuring that every product that Amazon posts on its platforms are
always eligible for Amazon Prime Free Two-Day shipping activities, FREE Shipping, along with
other benefits that allow it to top in global market for books and sales of music over internet. In
most cases, inventory management for Amazon is always divided into different stages. These
stages include an initial start with no inventory, and the other stage is built warehouses to store
inventory (Smith 2014, p. 12). Other stages include ideas of entering into partnerships with
distributors along with stage of entering into partnerships with different retailers globally. The
use of template of inventory that deals with recommended removal is vital in operations of
Amazon.com. The template form an inventory in Amazon fulfillment centers at risk of being
charged fee for long storage at the time of next inventory cleanup.
The initial stage on Amazon inventory starts with no inventory during the management as
the main targets of Amazon that focus on creation of a virtual bookshop, where targeted clients
could have more choices than any present bookshop that is physical around the global
community. The idea of using such concept in managing inventory in Amazon was vital as the
founder did not want to spend extra money and time on process of developing more warehouses
and deal with inventory since every warehouse could cost more than fifty million dollars for the
establishment (Xia et al., 2011, p. 457). All these stages have allowed Amazon.com to set high
standards for its operations along with sellers when it comes to activities and processes that deals
with focus on customers. The great experience of shopping for customer that inventory help in
improving include finding and ordering different products with ease, shipping products at no
cost, getting products faster after placing an order, offering excellent support to customers on

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different orders along with returns. Besides, process that deals with building warehouses to store
inventory are vital in operations of Amazon.com (Higins 2012, p. 59). It allows Amazon to build
its objectives and gain better control over their inventory together with improving the range of
different products while reducing their costs of logistics. Amazon inventory allows the company
to procure different items from their distributor as well as storing them in their warehouses
before selling to different customers (Wolf 2013, p. 17). Therefore, there is a need for the
customer to make the order and Amazon couriers it to their respective destinations.
Outsourcing
The approach of outsourcing in inventory remains to be loyal service providing technique
by a company. It concern with the system wherein goods as well as services are procured from
different external sources to the operations of Amazon. The usage of internet has remained to be
popular in operations of Amazon.com as the management uses it to advertise as well as sell their
products to reach various people that are unable to reach its headquarter (Mathaba et al., 2017, p.
3099). Amazon opened the whole fresh marketplace for competitive business in the specialty
corporation on the computer, and for extended duration, it has proved to be the successful
company on the Net. Amazon.Com has continued to be one of the famous public corporations
that investors have the desire to invest in its operations. Amazon inventory helps the company to
focus on its core operations along with savings. Amazon has been able to utilize inventory for
outsourcing as a way of ensuring that it offers quality products to markets (Helle et al., 2018, p.
54). The idea has made the company remain as one of the companies that require those benefits
from inventory outsourcing. Amazon always outsource only some of its inventory to help its
operations in mitigating risks and optimizing services in competitive markets that use internet to
support their production, distribution, and supply of books. The use of inventory outsourcing by

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Amazon.com has helped in improving its operations by ensuring that its services help in growing
business quickly (Wolf 2015, p. 27). The operations of Amazon are thus focusing of fulfillment
centers that are always built with their inventory in mind. Having inventory in mind makes the
company to have no minimum in the number of units that they always need to send as they
concentrate on handling the details of different of their products to help them in saving time so
that management can largely focus on their business.
Development
Strategies followed by Amazon to manage its inventory
Amazon.com found that the decision that deals with stocking the stores with every
possible commodity was not the appropriate approach. Although some of its targeted clients
might decide to choose not to buy if there are not adequate goods in the stock, Amazon decided
to manage its inventory in the season of 2000 by using specific strategies (Whitney 2018, p.
157). The company started from approaches that deal with reduction of the warehouses while
concentrating a lot on the products’ quality as well as manufacturer of publisher of different
products like books. The management of the company decided to manage its inventory by
deciding to buy its essential products directly from the manufacturer with the objective of
sustaining its relationships with vendors so as it can gain the appropriate deal from such vendors.
Besides, Amazon.com developed appropriate distribution structure with the aim of offering its
targeted clients with the fast delivery of the operations of company directly. The formation of
such distributions facilities have the significant influence on improving its products delivered or
shipped very fast to the targeted clients (terry-Armstrong 2013, p. 3). The fastest process of

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shipping goods by the management of the company comes out of the significant presence of the
goods that help in attaining satisfaction of a client.
Selling different production Amazon’s website
The idea that deals with inventory management has given rise to the process of selling
other products by Amazon.com on its website. Therefore, activities that deal with ideas of selling
other competitors products on the site of Amazon remain to be profitable. The profitability arises
since the targeted and esteemed clients of the company remain to be aware of the different prices
of other products when they compare with Amazon (Segan 2018, p. 54). The process help in
ensuring that the company focuses on improving their prices so that they become less when
compared to prices offered by their competitors. Besides, this idea provides the corporation with
extra profits without necessary getting involved in the process of making advertisements for their
products that are offered at low prices (Breniere et al., 2016, p. 12). Besides, such management
of inventory by Amazon.com opens new stores on its stores to provide higher availability of
products as well as draw more clients. Therefore, clients that are making different orders at
Amazon.com are always ready to wait longer than those that drive to the nearby stores along the
borders to get the same books or journals that they need (Brasler and Lettis 2018, p. 37). Clients
that use Amazon.com sites have the merits of finding the variety of published books at Amazon
than any other place.
Conclusion
The need to improve supply chain management by Amazon.com has helped in improving
the management of inventory for the company to achieve its success in operations. It is clear
from the above discussion that the primary target of Amazon inventory remains to be the need to

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offer the one-stop service. These services allow targeted and esteemed clients to get all products
of Amazon on its online platforms and deliver necessary products to clients within the needed
period. In order to realize the organization’s goals, Amazon needs to focus on creation of
collaborative partnership with its partners through the multi-tier system of inventory in order to
offer unlimited products to clients. Besides, there is a need for Amazon.com to maintain
sufficient network for its supply and distribution as a way of inventory management to help it in
delivering necessary goods to the customers. All these factors that have been illustrated in the
discussion affect operations and inventory of Amazon by affecting its competitive advantage as
well as improving its profits that they earn during operations. The use of inventory by Amazon
has illustrated that getting company’s products to customer promptly remains as the vital part of
developing the vast experience of customers’.

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List of References
Bozer, YA, & Aldarondo, FJ. 2017. 'Material handling: Robots or conveyors? Weighing the pros
and cons of Amazon’s Kiva vs. miniload automated AS/RS', Industrial Engineer: IE, vol. 49, no.
7, pp. 37-42.
Brasler, K, & Lettis, J. 2018. 'Stop Wasting Money. (Cover story)', Kiplinger's Personal
Finance, vol. 72, no. 4, pp. 32-40.
Brenière, SF, Waleckx, E, & Barnabé, C. 2018. 'Over Six Thousand Trypanosoma cruzi Strains
Classified into Discrete Typing Units (DTUs): Attempt at an Inventory', PLoS Neglected
Tropical Diseases, vol. 10, no. 8, pp. 1-19. Available from: 10.1371/journal.pntd.0004792. [20
May 2018].
Dvorak, J. 2018. 'What if Amazon Closed Up Shop Tomorrow?', PC Magazine, pp. 146-148.
Esposito, JJ, Walker, K, & Ehling, T. 2013. 'PDA and the University Press', Journal of Scholarly
Publishing, vol. 44, no. 3, pp. s1-s62.
Helle, AC, DeShong, HL, Baraldi, AN, & Mullins-Sweatt, SN. 2018. 'The Five Factor
Borderline Inventory: Behavioral outcomes across time', Psychological Assessment, vol. 30, no.
1, pp. 43-61. Available from: 10.1037/pas0000502. [20 May 2018].
Henry, Z. 2017. 'Will Amazon Buy You?', Inc, vol. 39, no. 4, pp. 24-28.