How Strategic Supply Chain Management Drove a $100K Monthly Sales Increase with +32% Increase in Profits
Project Summary
Brankit transformed a struggling brand burdened by a -28% profit margin where 70% of revenue was consumed by Amazon fees, 34% excess inventory, and in-stock rates below 90%. Our strategic plan focused on removing excess stock to mitigate long-term fees, adjusting prices for enhanced profitability, and leveraging advanced forecasting for precise inventory management. In just three months we achieved an additional $100K in sales and a +32% improvement in profit
Initial Hurdles
- Negative Margin: The client was struggling with a negative margin for the last five months before we onboarded it. The negative margin reached to -28% in November
- High Amazon Fees: About 70% of revenue was being consumed by Amazon fees including the huge fulfilment fee and storage cost, impacting the profitability.
- Excessive Inventory: The brand faced challenges with excess inventory, with 34% of stock deemed surplus causing inaccuracies in demand planning and long-term storage fees on excess stock
- Poor In-Stock Rate: With in-stock rates falling below 90%, the Brand was losing sales opportunities and customer trust in multiple products running out of stock.
Plan of Action
To address the challenges, Brankit devised a multifaceted strategy:
- Removal Orders: We executed removal orders for excess inventory to significantly cut Amazon fees. While this incurred some removal costs, it helped us avoid long-term storage fees and surcharges associated with completely stagnant SKUs.
- Price Adjustment: Profit analysis conducted for all the items on a unit level and adjusted the prices to increase the per unit profit. This analysis enabled us to identify underperforming SKUs contributing to negative margins
- Forecasting and Projections: Utilizing advanced forecasting techniques using AI-based tools, Brankit developed a precise quarterly projections plan, enabling proactive inventory management and order planning.
- Marketing and Supply Chain Alignment: Brankit synchronized the marketing team with supply chain operations to eliminate communication gaps and optimize advertising spend, effectively addressing both out-of-stock and excess inventory challenges
- Packaging and Cost Improvement: We conducted competitor analysis to optimize the product packaging, unit cost, and FBA fees
- Master Data Correction and Alignment: Correction and alignment of master data between the Brand’s 3PL warehouse and Amazon platforms, allowed us to streamline the inventory management and remove SKU naming issues
Outcomes Achieved
By applying strategies, the Brand witnessed remarkable improvements in just 3 MONTHS:
- Revenue Growth: The client achieved a revenue increase from $186K in November to $288K in February, with a clear pathway toward stable sales.
- Margin Enhancement: Margins increased from -20% to 12%, with stability in a short span of 3-months.
- Reduction in Amazon Fees: Amazon fees as a percentage of revenue decreased from 70% to 40%, majorly due to excess stock resolution, allowing the client to retain a larger share of their earnings
- Inventory Optimization: Excess inventory reduced from 34% to 18% with reduced Amazon storage cost
- Improved In-Stock Rate: The brand achieved a substantial improvement in in-stock rates, rising from less than 90% to 99%
- Enhanced IPI Score: The Inventory Performance Index (IPI) increased by 98 points on Amazon within 3 months, reflecting improved inventory management and awarded with long-term benefits on stock storage by Amazon.
Lee Leathers, CEO of Jaeger Tools:
“This team is top-notch! I learned a ton while they
improved our systems, reduced our doc to an optimal level,
and took lots off our plate. A+”
Become Next Success Story
Customer Stories
We have many reasons to prove our customers love us
Navigating Success With Us
We partner with industry leaders! Join us as we set sail through
insightful conversations with experts, sharing the latest knowledge
What Our Clients Say About Us
propelling them towards achievements and shared success.
Aug 16, 2023
Very professional and experienced
Very professional and experienced. We use them for their supply chain management, and direction advise on other areas we can improve. A+
Aug 18, 2023
Highly recommended!
Their expert team seamlessly integrated with our operations, boosting efficiency and productivity. What sets them apart is their tailored solutions, transparent communication, and unwavering commitment to customer satisfaction. Highly recommended!
Aug 18, 2023
Seamless Supply Chain Management by Brankit
In my role as a Brand Manager working with an Aggregator, I've had the opportunity of working with Haseeb from Brankit for the past two years. During this time, he played a crucial role in enhancing the efficiency of our supply chain management within the Home & Wellness Category, which boasts a value exceeding $20 million. Haseeb's contributions have been instrumental in refining our replenishment processes for over 1000 SKUs. Additionally, he has seamlessly integrated technological solutions into our operations through the implementation of ERP and inventory management systems. Working with Haseeb has been nothing but great. His professionalism, expertise, and positive work demeanor shine brightly in all our interactions.
Aug 30, 2023
Ecommerce Guru
To sum up my experience with Haseeb, his proficiency in the field, patience, and thoroughness were exemplary in every aspect of his work. From his impeccable attention to detail to his exceptional personal communication skills, he consistently went above and beyond to meet my needs and exceed expectations. Moreover, his unwavering dedication and ability to effectively communicate in English further enhanced the experience as he tutored me along the way in the Ecommerce journey. If you are looking for detail, knowledge and patience, Haseeb is your guy!
July 06, 2024
Really excellent work all round
Really excellent work all round - highly recommended and will continue using their services.
May 02, 2024
Working for half a year with Brankit..
Working for half a year with Brankit I am very happy. Keep it up!
Subscribe
Subscribe our newsletter to stay updated every moment
We craft solutions with automated systems, tools, and solid strategies to save your business from harsh surprises on cash flow & inventory.
Services
Resources
Company
info@brankit.com
Suite 3505, Unit 3A, 34-35 Hatton Garden Holborn, London
EC1N 8DX
+447307394583
©2023 Brankit All Rights Reserved.