Zero Inventories

 The concept of Zero Inventories is closely related to Just-in-Time (JIT) supply chain models. It is designed to reduce the risks and costs associated with holding too much stock (storage fees, obsolescence, markdowns), while ensuring that sellers maintain enough inventory to meet demand within a given period.

How It Works:

• Sellers forecast demand precisely (often weekly or monthly).
• Inventory is replenished in small, frequent shipments instead of large bulk orders.
• Stock levels are kept as low as possible, ideally aligning perfectly with sales velocity.
• On Amazon, this model is supported by real-time sales data, demand forecasting tools, and automated replenishment systems.

Benefits for Vendors/Sellers:

• Lower costs: Reduced storage fees (important for FBA, where storage costs increase for aged inventory).
• Less waste: Minimises risk of unsold or obsolete stock.
• Flexibility: Easier to adapt to demand shifts or new product launches.
• Higher ROI: Capital is not tied up in slow-moving inventory.

Benefits for Amazon:

• Efficient warehouse utilisation: Less pressure on fulfilment centre space.
• Faster turnover: Ensures FCs handle high-velocity SKUs more effectively.
• Customer promise: Fresh, updated stock cycles through faster.

Challenges:

• Stockout risk: If forecasts are inaccurate, sellers can quickly run out of stock, losing the Buy Box.
• Supplier dependency: Requires strong vendor–supplier coordination to guarantee timely replenishment.
• Operational intensity: More frequent shipments and monitoring are required.
• Not suitable for all categories: Works best for predictable, high-velocity products rather than seasonal or bulky goods.

Why It Matters:
Zero Inventories is critical for Amazon sellers because overstocking can lead to high storage fees, IPI (Inventory Performance Index) penalties, and excess inventory removals. Efficient inventory control helps vendors maintain profitability while protecting Buy Box eligibility through consistent instock rates.

Example:
A supplements brand uses Zero Inventory principles by shipping weekly replenishments of protein powder directly to Amazon FCs, keeping just enough stock for 2–3 weeks of cover. This reduces long-term storage fees and prevents expired products in FBA.

In short:
Zero Inventories is an inventory control model where sellers hold only the stock they need for near-term demand, reducing waste and costs but requiring precise forecasting and strong supply chain discipline.