How To Use Amazon Demand Forecast Tool For Effective Inventory Management

Amazon Expert

Hi I’m Steven, Founder of My Amazon Guy, a 500+ person Amazon Seller Central agency out of Atlanta, GA. We Growth Hack eCommerce and Marketplaces through PPC, SEO, Design, and Catalog Management.

Amazon demand forecast tool is one of the free-to-use tools that the e-commerce platform provides. It is essentially a practical Seller Central feature that can help sellers manage their inventory. 

 

Continue reading below to find out how this demand forecast tool helps keep your business thriving.

Where can you find the Demand Forecast Tool?

In Seller Central, go to Inventory > Inventory Planning

Amazon Demand Forecast Tool 1

Clicking on “Inventory Planning” will open a page that looks like this:

Amazon Demand Forecast Tool 2

Hover your mouse over the “Inventory” tab to show the drop-down menu and click “Restock Inventory.”

Amazon Demand Forecast Tool 3

Inside “Restock Inventory” page, click “Sales Summary” to show the “View Forecast” link.

Amazon Demand Forecast Tool 4

Clicking this link will open a pop-up window that looks like this:

Amazon Demand Forecast Tool 5

What can Amazon Demand Forecast Tool provide?

Using this tool, a seller will be provided with 40 weeks’ worth of estimated future demand. A probabilistic forecast model was used as the basis for the demand estimates.

 

This model is unique to each one of the products you offer. Previous orders, seasonal influences, active deals, and other information are incorporated into this probabilistic model.

How does it help with Inventory Management?

One of the key inputs that are used in calculating restock recommendations is the demand forecast. Through a probabilistic forecast model, a seller may understand projected demands and related uncertainties.

Amazon demand forecast tool provides a couple of prediction levels. From the image above, you can see two prediction levels:

  1. The mean level is represented by the green line and it tells the expected quantity of your weekly customer demand.

  2. The optimistic level is represented by the dotted line. Based on this line, you’ll know that the demand for your item is expected to be at or lower than this, 90% of the time. 

The tool, by default, shows the mean prediction level for a forecast period. The other two lines you can see in the demand forecast tool are:

 

  1. The ordered units of your product are represented by the gray line. This enables you to see your ordered units for up to 52 weeks if the product has been sold via FBA.

  2. The yellow line compares the number of units from last year to the current year. You can only see this line if you have been selling via FBA for a minimum of two years.

What if I do not see the tool for some of my products?

Currently, Amazon demand forecast tool is available for high-velocity products.You might see something similar to this screenshot below.

Amazon Demand Forecast Tool 6

Notice that the “View Forecast” link does not appear for all the SKUs in the list. According to Amazon, they are gathering sellers’ feedback and will make the feature available for all ASINs soon.

 

Moreover, the tool will also not show on ASINs that are new, have limited historical data, or are not under a certain category.

Why do its prediction levels not match my own demand forecast?

Sellers may have their own demand forecast tools and it could happen that their figures are not reflected in the Amazon demand forecast tool.

This can be due to various reasons. One possible reason is that the information used in Amazon’s model is not the information used in the seller’s demand forecast model.

 

The modeling and analysis techniques utilized in every tool can lead to discrepancies.

Prevent Stockouts using Amazon Demand Forecast Tool

The video below shows My Amazon Guy’s founder and CEO, Steven Pope, discussing the essential steps in optimizing FBA inventory management.