Leverage Amazon Forecast to Grow Your Business
This article was contributed by Forum Brands. Learn more about their business here!
Improve Your Forecasting Abilities
Accurate demand forecasting is one of the most difficult aspects of managing a growing Amazon FBA business. As your business grows and scales, the data you are managing becomes increasingly complex. Experts in this industry understand the need for accurate forecasting firsthand.
Leveraging Amazon Forecast
Several tools are available to reduce the number of hours spent reviewing your data, increase the accuracy of your forecasts, and therefore enable you to meet customer demand effectively and efficiently. Amazon Forecast is one of the most useful items in your toolkit. It uses machine learning to forecast future business outcomes, including resource needs, product demand, and financial performance.
The built-in tools of this fully managed service use your Amazon FBA historical data to detect patterns and make predictions. The tools can also generate brand-specific data based on the types of products sold, length of time you have been selling on the platform, and your targeted audience. There are other factors to consider as well, such as trending items, seasonal influx, and customer expansion that may alter the predictor model.
Getting Started with Amazon Forecast
Prior to using the service, you will need to set up an Amazon Web Services (AWS) account. A free tier is available that gives you access to over 100 products, which will help you build and grow your FBA business over time. Amazon Forecast is available as a free trial for two months to give you time to familiarize yourself with the tool before deciding to use it full-time. Once you have created an AWS account, there are three steps of the process:
- Creating and importing a dataset
- Using the predictor algorithm
- Generating a forecast
Benefits of Amazon Forecast
Forecasting Accuracy
This tool provides highly accurate forecasts that are up to 50 percent more accurate due to machine learning. Machine learning automatically detects how time-series data and variables, such as store locations and product features, affect sales growth. Best of all, you do not have to be a machine learning expert to harness the power of Amazon Forecast. The system takes care of all the math for you.
Quicker Data Review
Sellers can conduct data reviews manually, however, the advantage of Amazon Forecast is it cuts down on months of data exploration to as little as a few hours.
By importing your time-series data, Amazon Forecast does the heavy lifting of inspecting the data and identifying key attributes necessary to generate accurate forecasting. Plus, it is not limited in the type of data you can review on a regular basis. You can set forecasts for anything, from product demand to sales growth and web traffic to resource planning.
Data Security
Lastly, Amazon Forecast is protected by encryption, which ensures your data is kept secure and confidential. Furthermore, you will always retain ownership of all data and it can only be used for machine learning with your consent. Amazon FBA sellers commonly use this service in several areas of their growth strategy, such as retail demand and resource planning. Use it as a guide for your business decisions moving forward.
Use the Data to Inform Your Decisions
Machine learning is key to managing large-scale data. However, machine learning cannot tell the full story. You and your team are able to provide valuable context to the forecasts generated and use the forecasts to prepare growth strategies accordingly. Many times, brands that experience a surge in growth are ill-prepared to meet the influx of demand. The result is delayed product and shipping availability, and consequently, unhappy customers. While growth in general is positive, you must be in a position to support rising demand in order to retain customers and sustain your business in the long-term.
For more information on how to use Amazon Forecast, refer to this article. Check out our website to hear more from Forum Brands’ experts.
