How Amazon’s #1 Largest Jewelry Merchant uses Fulfil for Inventory Management

Overview

Founded in 2015, PAVOI has garnered over 50,000 5-star reviews on over 3,000 unique pieces, and is now the largest Jewelry merchant on Amazon. Their customers love the elegant design and affordable pricing, while offering recycled packaging materials which contribute towards their carbon-neutral footprint. 

Maria Cuartas, PAVOI’s Director of Operations, spoke to us about how they’ve used Fulfil to scale their operations, and specifically solve the puzzle of inventory management that any brand operating at scale is faced with.

Threading the Needle of Inventory Management

Effective inventory management can either be a growth catalyst or the Achilles’ heel of any scaling ecommerce store. Done well, you can expect to maximize your cash flow while minimizing storage costs, but missing the mark can mean lost sales and reputational risk. Factors like seasonality, growth, and product launches can all heavily influence the inventory management process, which needs to be closely monitored and controlled to be effective.

Any cash that is invested into inventory is a sunk cost, and inaccessible for other investment opportunities such as marketing or product development. Furthermore, every step in the process between purchasing and ultimate delivery to the customer is a cost center for the business. This includes transportation costs, storage fees for inventory on hand, and inventory shrinkage such as damaged or lost goods. Because of this, Maria and the PAVOI team are constantly aiming to minimize both the time from production to consumption and the amount of inventory held at each storage location along the way, without risking stocking out.

“At any one time we are looking to minimize the amount of time that it takes for a product to be produced, to when it’s in the hands of one of our customers.” 

- Maria C, Dir of Operations at PAVOI

On the other hand, the risks of understocking and selling out are also extensive. At the most basic level, undershooting inventory management means selling out, which equates to lost sales. This is of course never an ideal scenario for any merchant, but for one like PAVOI with Amazon as a lead sales channel, this can be especially devastating with the possible loss of the coveted “Best Seller” badge and a de-ranking in the marketplace’s listings.

Therefore, there’s a small window of opportunity for every ecommerce brand to optimize their Inventory Management into the Goldilocks zone. Not too much inventory so that excessive fees start to eat into the bottom line, but not too little that there is risk of selling out and the complications that come along with that. 

Feeding the Beast

Inventory Management is a science, with a series of inputs and a set of desired outputs that represent a system that can be optimized. Thinking in this systemic framework, the inputs can be classified as Internal and External. 

Internal Inputs are data that’s available to the merchant and within their control like Sales (historical and projected), marketing data (forecasted ad spend, campaign performance, etc), desired safety stock levels, and growth projections.

External Inputs are factors that must be taken into consideration by the merchant but are outside of their direct control - these are things like Lead Times, Manufacturer’s raw material quantity on hand, and transportation throughput at critical supply chain checkpoints like shipping ports.

For PAVOI, these inputs need to be taken into consideration when targeting the desired Output, which is a specific number of days of cover and/or weeks of stock for each of their 3,000+ products. This gives them visibility into how many days of inventory they have before they sell out of stock, or when they need to re-order from their suppliers to prevent this from happening.

KEY FACTS

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LOCATION

5

COUNTRIES SHIPPED TO

6

WAREHOUSE

REVENUE GROWTH (YOY)