✔ 100% Successful FBA Amazon Inventory Management strategy, Supply Chain Logistics

by Tomer

January 30, 2021

Tomer [00:00:00] What’s up, guys, in this video we’ll take a look on an interview that I did with Eli Ventura about logistics, about supply chain inventory management in your Amazon FBA business.

And before getting into the video, please make sure to subscribe to the channel and leave a comment. I subscribed so I can personally reply to your comment. Let’s start.

Tomer [00:00:28] OK, guys, we have Eli Ventura, is the co-founder and director of e-commerce that We force, which is a company that gives services to brands on many marketplaces.

We also have his own five brands on Amazon with more than twenty-five products and keep launching new products all the time on Amazon and of course, on other marketplaces, he sells in Europe, Japan and you said Brazil also Eli, you started.

Eli Ventura [00:01:02] I would begin next month. Yeah.

Tomer [00:01:06] I’m excited to hear how it goes there so we can learn from this guy a lot of things. This recording will be focused on inventory management, on logistics.

And like Eli said before this call, this is kind of a gray area, area that is not that shiny, but it’s super, super important to your business, especially when you grow and you have like more than one or two products, it becomes more and more important.

So Eli, before we start, why won’t you tell a little about yourself and about your background before you started Amazon, how long you do Amazon?

Eli Ventura [00:01:46] OK, so I’m from Israel first married with two beautiful girls. I think the most important part and all the business that’s the reason we are selling.

Started to sell on e-commerce on 2013 started on eBay dropshipping some suppliers from Israel, some from the United States, basically drop shipping and wholesale and then in 2014 and discover the private label on Amazon and they basically fell in love.

And my first product is the product I sell, the brand that I sell now and started in 2014. And since then I left eBay and basically I focus on the Amazon, started to spread my brand and create and other brands and other brands on Amazon, US, Amazon, Canada, Amazon, Europe and Japan.

Eli Ventura [00:02:48] And I, I, I tried to create for this new products every one or two months in order to enlarge my skills.

Tomer [00:03:01] And you’re like the five brands under one seller account, or you like a couple of seller accounts.

Eli Ventura [00:03:13] I have two seller account. Yeah. My seller account I have three brands there and I have another seller coming to partner with two other brands.

Tomer [00:03:21] You recommend, if you like, have your own brands without partners and like other people involved, like keeping everything in one account, or sometimes it’s better to when it’s like better to split it into two sellers account.

Eli Ventura [00:03:34] I think as we both know, Amazon, it’s always better to split because they can woke up in a shiny day and close your account without any notice.

Eli Ventura [00:03:48] So, yeah, back up. Back up is always good to know. We always don’t, you know, hide it from Amazon.

Eli Ventura [00:03:59] Amazon knows about my second account and that are related and they all clear in the white. Also, was the end of e-commerce in the electronics, one of the biggest consumer products companies in Israel?

It’s a two-billion-dollar company, and I asked them to start with the Amazon e-mail business and the business in United States. And we did a lot of great things. And that’s all.

Eli Ventura [00:04:36] That’s me.

Tomer [00:04:38] So you got probably a lot of experience with Electra, which is the kind of a big seller. I didn’t know that they sell like products in the US marketplace like Amazon.

Eli Ventura [00:04:48] It’s under the radar. Under the radar.

Tomer [00:04:53] Under the radar. Yeah. OK, good. So let’s start with the first question. I prepare here for you what from your eyes, from your experience is the importance of logistics and inventory management to your success as an Amazon FBA seller.

Tomer [00:05:13] Yeah.

Eli Ventura [00:05:16] I think that as an Amazon FBA business owner, we would like to think of ourselves as individual entrepreneurs, and I believe that the business owner basically in all the world of e-commerce and Amazon FBA in particular, you need to develop skills in many areas like financial management, logistics planning and many more like every other retail business.

Eli Ventura [00:05:45] And to run an Amazon business will you really need to know how to accurately manage your inventory according to cash flows so that any given time you will have precisely the right amount of stock needed.

Too much or too little, because if you have too much inventory, let’s say you have 1000 more than you need that it means you have used your cash flow that could be dedicated to purchase new products and you have too little inventory. So you didn’t lend the goods properly. So therefore you were likely to be short of cash flow, understand cash flow.

Tomer [00:06:28] And also like sales. Right?

Eli Ventura [00:06:29]  Yes, of course. Sales and cash flow.

Tomer [00:06:32] Yeah. Yeah, true. True. I figure this out on my own business and the importance of this when you’re like I had like a couple of products, it was easier. But the more you have, it’s harder to manage all of this. So, yeah, it’s super relevant topic. I agree.

Eli Ventura [00:06:52] It’s super important skill that you have to every Amazon seller need to develop the skill to finance or financial and logistics.

Tomer [00:07:01] It’s it wasn’t part of my questions. But do you feel that it’s better to outsource this to someone that that is expertize or keep it to yourself, develop these skills of financial management and inventory management?

Amazon Inventory Management Strategy

More Amazon Inventory Management Strategy

Eli Ventura [00:07:17] I think that my one of the most sentence that I like to share and written all over my place in my office is do what you do best and outsource the rest.

So you need to know what you’re doing best. If you know, to do PPC, please do PPC. If you know management, inventory, finance, I’ll do it. And the other things to not hire someone but find someone to do it for you.

But as a freelancer, I don’t I don’t really like the payroll and something like that. You need someone to do it, but some experts to make it expertize and you need to know it, but, Not not to do it, but to not to focus on it, but to to to manage it.

Tomer [00:08:12] You know, you need to do it maybe at the beginning, understand the principles, the basics, and then, like, outsource to someone that can only do that and focus, and then it would even be better than you, right? 

Eli Ventura [00:08:25] Yeah. Let me share with you one example from eBay. At the beginning of my business, I sell on eBay, and on eBay, you have a lot of customer support and customer service.

And they did it on my own because I’m a control freak and they want to do it all by my own. And I spent about three or four hours a day, only about customer support, four hours a day.

And I thought I did the greatest customer support ever better than Amazon and the most expertise in the customer support. That’s what they did. And then I had enough in Christmas in 2018-2019.

Eli Ventura [00:09:09] And I hire a VA from the Philippines to the only customer support. I discovered two things. One she do it better than me because that’s what she you do.

She knows how to do customer support and to English is better than me, as you said. English is not my native speaking language. So she speak better than me. She have.

She has much more patience and the customer loved her and my time is their patient, so I could spend my time on other things on Amazon, on finding products, on promotion and so on.

Tomer [00:09:54] Yeah, that’s that’s a big topic that I really fashioned. I love. I’m passionate about like outsourcing about like delegating like like work to other people. Yeah.

Like maybe in the future we can just talk about that. Super, super, super important. They feel OK in the end. I know that in the previous positions that you had and manage many people under you, you realize that organizations and discipline are big parts of any business success.

Do you have anything that you can share to make Amazon eBay sellers more organized or on top of their business numbers? And bottom line.

Eli Ventura [00:10:36] I think when I started to work on Elektra, as I said, it’s one of the biggest companies in Israel and I was it’s after five years as an entrepreneur and I used to manage many things on my own. So there’s quite a few advantages and disadvantages in a large organization.

Eli Ventura [00:10:57] One of the things I’ve learned and taken with me is that understanding that one person, however talented, cannot know and be expert in everything.

Eli Ventura [00:11:11] For example, as I said, if you are managing the BBC, you have the expertise and you do the Pepsi management the best in all the US. It doesn’t mean that you know how to manage the inventory at the same level.

Eli Ventura [00:11:27] So you you must. And let’s say you will be surprised to know how much information and understanding you can get from an expert planner with inventory management expertize. For example.

Eli Ventura [00:11:48] I work with a cleaner that is working about one, I think, no, it will get about four hours a month and I’m sending in reports,  Amazon reports and basically put it on the Excel sheets and analyze them and tells me how many units I need to order from each rescue and when to place the order.

Eli Ventura [00:12:19] I never quite done it, couldn’t it? By itself is the way it is that it? The same in the financial field, understanding the numbers, analyze cash flow and what you need to understand it, but I am not for a full time job, full two hours a month, three hours a month.

I have an expertize in accounting or I don’t know if someone in adviser that could that can take the numbers and tell you what you’re doing.

Eli Ventura [00:12:49] Good. If you put too much money on the TPC, you you spend too much money on storage on the BMO that I don’t know and tell you what you need to do in order to to make the business run.

Well, the most important thing that the business will want. OK, that’s that’s a great example.

Tomer [00:13:12] I thought now to hire like I thought I actually hired the freelancer the same way that you explain, just like for part time, just like maybe two or three hours a week at the beginning and then maybe just less a month just for the inventory.

But for financial, it’s the same. Yeah, I know. Kind of like what’s going on in the business, but I don’t really dig deep enough to the bottom of things because the lack of time and that could save me actually a lot of money.

Tomer [00:13:43] So that’s something that I definitely would work on. And to hire someone as a freelancer just to look at my financial.

Tomer [00:13:50] You think that the accountant is is have the right expertize to dig into Amazon things or have the right knowledge or you think it’s better to hire someone that is just like know about Amazon?

Eli Ventura [00:14:04] I think numbers and finance. In the end, it’s numbers. It’s only numbers, it’s data. So you want to take the data and put it on the Excel sheet and then they know what to do and they know what Wilkins will and what don’t work.

And well, for example, I worked with a financial advisor that came from the real estate and field and she took my numbers. She asked me how much, if you can see how much Amazon Fiamma. She didn’t know nothing about Amazon.

Eli Ventura [00:14:33] And after two or three hours that she analyzed the report, she told me, OK, you’ll typically is worth something like this. You’ll need that. For example, only 30 percent for all your sales will be from the PPC. Otherwise, your your your margin is really, really low.

Eli Ventura [00:14:54] And you need that cash flow in order to make other inventory and to so they they look from a different angle on your Amazon business and help you to understand it better financially, because, you know, at the end we are we are running a business there.

Eli Ventura [00:15:13] And if someone it can be about 100 and 200 or 300 dollars a year and it could be millions, as you know. And it’s a business and you can run it alone.

Tomer [00:15:28] You can. You can. Sometimes you have the illusion because Amazon doing like the big parts of the business, like, you know, inventory. Exactly. Customer service.

Do you think that you can run it by yourself? Which is true. But to a certain level, like maybe as a beginner your first year. Yeah, but but the faster that you are, the faster your growth will be.

Sometimes you get scared on think, oh, I’m not making enough to hire someone, but I think that’s the best investment that you can make even before taking profits to yourself, like invest in other people. And it could be like the return the our I will be like crazy.

Eli Ventura [00:16:09] Yeah. And always very positive and definitely. Yeah.

Tomer [00:16:14] OK, great. How you manage your supply chain that you mentioned that you send the data like to someone and then is analyzing it like are you aware of what formula they are using. Are you like the numbers that are giving you the recommendations are accurate using any software as a first?

Eli Ventura [00:16:35] I work with several tools that give me an overall picture of my activity and alerts me regarding inventory sales right thing and so on. If you send a bold or Fetcher or Salix forecast, you have a lot of good tools that help you to manage your Amazon account.

And I know many sellers that don’t use them. And it’s awful because I think it’s one of the most important part of the Amazon FBA business, because Amazon doesn’t let you know anything. And it’s really, really tough to to get data from Amazon and to understand the data.

So to the external tools. And it’s you know, it’s it’s pennies fifteen dollars a month in nineteen dollars a month spending.

Eli Ventura [00:17:23] But because, as I mentioned.

Tomer [00:17:25] Like thousands of dollars, right, pennies compared to what you can actually save or make more.

Eli Ventura [00:17:32] You know, first you need to understand first it’s easy, it’s easy to understand what the business do because I’m meeting with a lot of sellers that and look at and say, oh, I, I sell 20 k’s this month.

Oh, exactly. But I don’t have cash flow in my end. So where is the cash flow? It’s go to the PPC and I didn’t understand it.

But as I mentioned earlier, I will explain that once a month I send in the Amazon reports, he puts them on Excel files, analyze them and then tells me exactly what they need to do. The tools also told me, tell me what to do and I compare it to is the walk.

Eli Ventura [00:18:15] And I walk like this, I, I, I make a purchase order in my which my supplier, according to the files I am talking about, is of course that the first time you although I think the first few months of actually product after launch, it’s really hard to, to know what working well, but after five, six, seven months you have a great picture and good picture to know how many people you need to order. 

Tomer [00:18:50] Like for new items, it’s very challenging.

Tomer [00:18:54] You know how well it will do or how much it will make.

Tomer [00:18:57] I know a lot of people that explain how to sell on Amazon. They analyze the competition, they see what they’re selling. And based on that, they were there like two months supply. My approach is a little different.

I like to test the market with small quantities and then sometimes it’s kind of like it’s not a good thing because I lose a lot of sales if the product is good. But at the other end, if the product is a failure, I don’t really risk myself a lot.

But yeah, it’s still something that I test, you know, always testing and see what works the best. At the other end. You can you could say, OK, bring like 50, 100 units or two thousand.

You go all in, you’re going to be fully committed. The product research you’re going to do is going to be very well and everything else. You’re going to make sure that it’s like the right way and you put like all in approach, which is also good. But I always change my mind about it. I don’t know.

Eli Ventura [00:19:55] I don’t like the all in. I love the all in when you know your product is good, but you know it only after you sell it a few months after.

Eli Ventura [00:20:04] It’s definitely all in. But in the beginning, be careful. Watch yourself, because you can spend thousands of dollars for nothing and you never know, even like you might like to think like 30 thirty products now.

Tomer [00:20:20] And I still don’t know for every new product that they bring. Some markets. Yes, I have more confidence. Maybe it’s related and maybe it’s something that I have experience with. But you still like you never know how the markets will look like except the market, right?

Eli Ventura [00:20:35] Yes.

Tomer [00:20:38] OK, so you think it’s an area you should outsource or because the importance to keep it OK? So about that we already discussed we should outsource like the desk,.

Eli Ventura [00:20:52] Not the 100 percent unit.

Eli Ventura [00:20:53] You need to find the balance to be read about that.

Tomer [00:20:57] Yeah, I think the approach or the way you explain it, like hiring a freelancer is the right balance because you’re not like, fully committed to hire someone like full time or even part time that works no matter like how many hours a day that you agreed.

Tomer [00:21:12] And he’d do whatever like he needs to do, like as far as work and where he’s done is done. So that’s I think what you would really like don’t risk, you know, if you’re not happy with the 10 hours, it is for you. Yeah. You lost that money. But at least, you know, like, you know what works and you can move on to the next person.

Tomer [00:21:32] So how this will be the last question, which is relevant to where we we are right now is the time of the year, almost the end of Christmas.

Tomer [00:21:42] I think, like many of our items, like you already see that it will arrive after Christmas, which hurts the conversions. But it’s time to prepare for a Chinese New Year.

So how Amazon FBA sellers should prepare as far as the inventory management for this upcoming Chinese New Year, which is like definitely different than the previous year’s, you know, last year, Chinese New Year, the whole thing, the pandemic started.

Yeah, a big challenge to everyone to have stock after. And whoever had prepared enough stock before was really lucky to get like all these fruits of all of these sales and doing different.

Eli Ventura [00:22:28] Yes, at first we record the video, we’re in the middle of December, so I think the concern is not placed an order yet because the supplier is already quite late.

Eli Ventura [00:22:42] But like everywhere, every year this period is different is the choir and other thinking and planning in.

Eli Ventura [00:22:50] It’s crucial to understand all the details before we are placing the audio with the supplier first. I think that all sales on Amazon and basically all the retail world are placing orders which the supplier this month.

So think about it, all the retail all over the world. Placing all the Chinese suppliers now this month so all defectively are really, really busy, and as a result, the production time is expected to be much larger than usual.

Eli Ventura [00:23:26] Second. The end of the production, it’s about the January, the end of January, as every year the shipping companies are expected to be overloaded much more than expected, so that the shipping costs and the preparation time are also expected to be larger than usual.

Third, the factories are expected to return to work only at the end of February. So even then, there is a bottleneck as expected.

Eli Ventura [00:23:56] So even if you started to produce producing today, so at the end of February, the goods are expected to be ready only around the beginning of April. So that means that the goods that the order today should be enough for you.

Eli Ventura [00:24:15] By about middle of May, you need to walk on five months ahead.

Tomer [00:24:22] Well, I didn’t plan it like that. So it’s a good point that you’re saying.

Tomer [00:24:28] I think that, you know, like let’s say you place this over there now, right, and it’s going to be, let’s say, like middle of January to be ready when shipping.

[00:24:40] You think that the factories won’t be able to take another order like between or mid-January to know the Chinese New Year, which is February 12th, 12th, 20, something like that.

Eli Ventura [00:24:53] But all the other Chinese employees are starting the vacation at the beginning of February so they don’t take new orders. And they’re back only at the end of February.

Tomer [00:25:09] Yes, yes, that’s why you need a really good relationship with factories, because, you know, for me, during the pandemic, they actually produced some of my best seller items.

Tomer [00:25:21] I put like a lot of I actually threatened them. I told them, look, if you’re not going to produce the goods, I’m going to move my operations to to India. I sell a lot of cotton products and they got scared and they actually got an arrangement that they’re going to work at home during the pandemic.

They get like some stopping flights. But I only could do that if I built this relationship. So building relationship, like sending gifts, being like, you know, interested in them building this personal relationship. It’s it’s like we talked about our eyes. So the return of these little things is so, so important.

Eli Ventura [00:26:02] So here is another tip. Here’s another tip. As I said, do what you do best, outsource the rest. So I have also a Chinese sourcing agent that she teach me that when I talk with the Chinese supplier and ask for the quote, so I get an English quote, a US dollar quote.

But we she contacted the supplier. She gets another quote. It’s a Chinese quote, each other and it’s different prices. And it’s it’s their relationship with the supplier.

No matter what you do, you can be the the the warmest contact person. And it will be great communication. But when you’re talking with the Chinese, with your Chinese supplier, it’s other communication.

Eli Ventura [00:26:49] So since then, I will only whisper even if I found myself on Alibaba, I knew suppliers. I tell them, OK, thank you very much. I will contact my, you know, my sourcing age.

I don’t think it’s such a sourcing agent. I call her my I am don’t like my operation manager, my position manager or something like that. I will contact you tomorrow and she will continue from here.

Tomer [00:27:15] Well, that’s that’s a nice strategy. Actually, I didn’t think about it. I do have a sourcing agent too. But to be honest, recently, the prices that they can bring, they are not that great.

So, you know, I didn’t really use it, but it’s a good point to try because, you know, they obviously they have someone talking to them the same language. Also, the way that you explain it, like like she’s part of your company just based in China, they will take it seriously.

And they say they know what they are doing and we can just like them and just tell them stories. You know, I also like to check, you know, the Chinese Alibaba one six six eight.

You see, what are the price they are giving me is comparable with what they sell it between themselves? You know, that’s a good way for me to validate whether the pricing is like is on or like it’s they’re trying to rip me off, but yeah. Yeah, I learn Chinese now. So they’re trying to talk with me. Chinese.

Tomer [00:28:16] I enjoy it.

Tomer [00:28:18] By the way, did you visit China? Do you recommend to sellers to go and visit there?

Eli Ventura [00:28:24] I do recommend them, but I honestly, I never been to China. I really, really want to be here. I, I wanted to be here last year and I tell myself that I will be in the Canton Fair in April.

Eli Ventura [00:28:38] But Pandemic’s and yeah, I actually had the ticket from March last March there this March I mean twenty twenty. And obviously it was I had to cancel the flight but I planned to go with this. I hope that we will have this can be done for in this April.

Tomer [00:28:57] No I don’t think you don’t think that it will happen maybe in October at the end of the year. Too soon. Yeah.

Tomer [00:29:05] But anyway I plan to go to I think that the value and the more personal connections that I will create will be like something that I really feel that I, I just I have to go there and build those relationships.

And the main purpose is just get like better payment terms. So let’s say they ship the item, but I will pay them only like after 60 or 90 days. Yeah.

Tomer [00:29:29] A line of credit to allow me to launch new products and have better financing and better options to scale.

Tomer [00:29:43] What about you? Do you have payment terms with your suppliers? It’s a big part of logistics, right?

Eli Ventura [00:29:49] Of course not that good. I have a line of credit of 60 days with one of my major suppliers. It’s good, but it’s not. That helps me. But yes, I talking with them every time and I.

We are working together for six years. They’re sending me presents for Christmas, although I’m an Israeli and a Jewish, but I don’t want to tell you.

Tomer [00:30:15] Yeah, yeah, they like to send their gifts for the new year. I know. Yeah, that that’s good. From what I did a little research because that was my my main purpose to travel to China to get the payment terms.

So before my trip, which was canceled, I really did the research and what I heard from other sellers that were able to get it, they said that the best way to do it in person, like and be prepared, like show them why they want to give you the payment terms.

It’s not just for you. It’s for them. Yes, it’s for them. Yeah. Like get get the numbers right. And tell them that if you give me payment terms you’re going to get them yourself and back it up by data showing the numbers.

Even if they are not 100 percent accurate. Exaggerate then yes or no. I think it should increase the rate if you just.

Tomer [00:31:04] That’s exactly what. Yeah, that’s exactly what I did. I told them.

Eli Ventura [00:31:08] Now I can ask you if you give me a line of credit 60 days, I will be able to enlarge it by 12, 14, 16, maybe 20. Excuse because you give me the line of credit to work. Give me here to breathe.

Tomer [00:31:26] OK, this I didn’t really plan about anything new. This new excuse. It’s good for them. Like you’re going to say. Yeah, that’s a really good point.

Tomer [00:31:34] I didn’t, I just told them I’m going to order more. That was my plan. But it’s the same. The same. Yeah, yeah, yeah. OK, very good. All right. It was very productive call.

I learned a lot of things. I’m sure the people are going to watch. It will also learn new things. I appreciate you coming and doing this with me. And sure, I hope we can do another call maybe about the outsourcing and hiring about related to Amazon FBA.

Eli Ventura [00:32:05] I will be happy.

Tomer [00:32:07] Thank you very much, Eli.

Eli Ventura [00:32:08] Thank you for your time, Tomer.

About the author

My name is Tomer, and I founded Sourcing Monster to share proven tips and methods that I use every day for my Amazon business to provide value and growth for you as well as you journey through your own business!

Feel free to comment or share any feedback down below!

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