I sell through Amazon FBA: what should my lead time include before stock becomes sellable at the fulfilment centre?
Lead time ends when units are available for customers to buy, not when they reach your warehouse. If you sell from stock held in an Amazon fulfilment centre, it covers supplier time, shipping to you if goods pass through your hands, preparing and shipping them to the fulfilment centre, and the receiving time there until they show as available. Take those durations from your own recent shipments rather than from published estimates.
Why lead time is different here
In your own store, goods that reach your warehouse are more or less ready to sell. With FBA, a customer cannot buy a unit sitting in your warehouse. What counts is sellable stock at the fulfilment centre, and units do not count as available until they are received and checked in there. Every day on the road to the centre or waiting to be received is a day on which sales keep coming out of your current available stock.
Example: 20 days or 30?
You sell 18 units a day on Amazon and keep 150 units of safety stock. The supplier needs 20 days to get goods to you. On your recent shipments, prep, inbound shipping and receiving at the fulfilment centre took about 10 more days.
To your warehouse door only, 20 days: demand during lead time 18 × 20 = 360, reorder point 360 + 150 = 510 units.
Until sellable at the centre, 30 days: demand during lead time 18 × 30 = 540, reorder point 540 + 150 = 690 units.
The gap is 180 units, ten days of sales.
Order at 510 and, over the real 30 days, you will sell 540 units, 30 more than the 510 you held. The whole safety stock goes on an ordinary wait and the listing runs out before the shipment is checked in, even with no delay at all.
What goes into the lead time
- Supplier time until the goods are ready, and shipping to you if they pass through your warehouse.
- Preparing the Amazon shipment: labels, packaging and the packing list. A clear list per carton makes checking easier, and you can build one with the Packing-list generator.
- Inbound shipping to the fulfilment centre.
- Receiving at the centre until units show as available. This can vary between shipments, so use the average of your recent ones, and the longest if you want to derive safety stock from maximums.
- Enter the total as the lead time in the Inventory reorder-point calculator, with your Amazon daily sales only.
What to compare the point with
Compare it with available stock at the centre plus units on the way there or waiting to be received, plus anything in your own warehouse set aside for Amazon. The calculator does not connect to your Amazon account and does not know these figures, so take them from your inventory dashboard. If you also sell the same product from your warehouse through your own store, that is a separate stock pile needing its own calculation with its own sales and lead time.
If you are choosing between sea and air freight to the centre, the cartons' volumetric weight can change the cost a lot. Work it out with the Volumetric shipping-weight calculator before deciding, then set the lead time to match the method you chose.
Common questions
Does the calculator know Amazon's receiving times?
No. It does not connect to Amazon and knows no durations. It calculates only with the days you type, so use your experience with recent shipments.
Should I combine Amazon and store sales into one figure?
Only if both sell from the same stock. If your Amazon stock sits separately in a fulfilment centre, give it its own point based on its own sales.