Predicting demand is one of the hardest parts of selling on Amazon. Order too much inventory and you are paying storage fees on products that are not moving. Order too little and you stock out, lose organic ranking, and hand sales to your competitors. Amazon's demand forecasting tools are designed to help, but only if you understand how to use them and where they fall short.
Insights from Andrew Morgans and the Marknology team in Kansas City.
What Is Amazon's Demand Forecast Tool?
Amazon provides demand forecasting capabilities within Seller Central through the FBA Inventory Planning tools. The system analyzes your historical sales data, seasonal trends, and market signals to project future demand for each of your products. You can find these forecasts in the Inventory Planning section and the Restock Inventory tool.
What the Tool Provides
- Projected demand: Estimated units you will sell over the next 30, 60, and 90 days
- Restock recommendations: Suggested order quantities and ship-by dates to maintain healthy stock levels
- Seasonal adjustments: The algorithm attempts to account for seasonal demand patterns based on historical data
- Lead time calculations: Factors in your supplier lead time and Amazon's receiving time to recommend when to send replenishment shipments
How to Set Up and Use Demand Forecasting Effectively
1. Input Accurate Lead Times
The forecast is only as good as the data you feed it. Make sure your supplier lead times and Amazon transit times are accurate in Seller Central. If your actual lead time is 45 days but the system thinks it is 14 days, the restock recommendations will be dangerously late.
2. Review Forecasts Alongside Your Own Data
Amazon's forecast tool is a starting point, not gospel. It works well for products with consistent sales history but struggles with:
- New products: Limited sales history means the algorithm has little to work with
- Highly seasonal products: The tool may underestimate demand spikes if your product is new or if seasonal patterns have shifted
- Products affected by external factors: Viral social media posts, competitor stockouts, or PR coverage can create demand spikes the algorithm cannot predict
- Products with recent changes: If you recently improved your listing, launched ads, or ran a promotion, historical data may underestimate future demand
3. Build Your Own Forecasting Layer
Smart sellers supplement Amazon's tools with their own forecasting spreadsheets or third-party tools. A basic demand forecasting model should include:
- Trailing 30/60/90 day sales velocity: Your actual recent sales rate
- Year-over-year comparison: What happened in this period last year? Is the trend up or down?
- Planned marketing events: Upcoming deals, ad budget increases, influencer campaigns, or external traffic pushes
- Competitor analysis: Are major competitors going out of stock, launching new products, or changing pricing?
- Seasonal multipliers: Apply multipliers for known seasonal peaks (Q4, Prime Day, back-to-school, etc.)
4. Use Safety Stock
Always carry safety stock beyond what the forecast suggests. A common approach is to maintain 2-4 weeks of extra inventory above your projected demand. The cost of holding extra inventory is almost always less than the cost of stocking out.
Third-Party Demand Forecasting Tools
Several third-party tools offer more sophisticated demand forecasting than Amazon's built-in tools:
- SoStocked (now Carbon6): Purpose-built for Amazon inventory management with detailed forecasting, multi-warehouse tracking, and reorder alerts
- Inventory Planner (Sage): Connects with Amazon and other channels for cross-platform inventory forecasting
- Forecastly: Focuses specifically on Amazon FBA inventory forecasting with customizable lead time and demand parameters
- RestockPro: Combines demand forecasting with supplier management and FBA shipment planning
The right tool depends on your catalog size, complexity, and budget. For sellers with fewer than 50 SKUs, Amazon's built-in tools plus a well-maintained spreadsheet may be sufficient. For larger catalogs, dedicated inventory management software pays for itself by preventing stockouts and reducing excess inventory.
The Real Cost of Getting Demand Forecasting Wrong
Understocking
- Lost sales during stockout period
- Organic ranking decline (can take weeks to recover)
- Competitors capture your customers
- PPC efficiency drops when you return to stock (rebuilding ranking costs more than maintaining it)
Overstocking
- Monthly FBA storage fees eating into margins
- Aged inventory surcharges after 181+ days
- Capital tied up in unsold product
- Potential disposal or removal costs
Making Forecasting a Habit
Demand forecasting is not a one-time exercise. Build it into your weekly operations:
- Weekly: Check Amazon's restock recommendations and compare against your own forecast
- Bi-weekly: Review sales velocity trends and adjust reorder points
- Monthly: Evaluate forecast accuracy for the prior month and calibrate your model
- Quarterly: Factor in upcoming seasonal events, marketing plans, and product launches
The sellers who build forecasting into their routine rarely face the stockout or overstock crises that plague reactive sellers. It is an operations discipline, and it compounds over time.
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Frequently Asked Questions
What is the best way to increase Amazon sales?
The best strategies include optimizing product listings with keyword-rich titles and bullet points, leveraging Amazon PPC advertising, maintaining competitive pricing, earning verified reviews, and using tools like Amazon Brand Registry. Marknology, led by Andrew Morgans in Kansas City, has helped 300+ brands scale their Amazon revenue using these proven methods.
How much does Amazon advertising cost?
Amazon PPC costs vary by category, but average cost-per-click ranges from $0.20 to $6.00. Most brands allocate 10-30% of revenue to advertising. The key is optimizing ACoS (Advertising Cost of Sales) to maintain profitability while scaling.
How do I optimize my Amazon product listing?
Focus on keyword-rich titles (under 200 characters), compelling bullet points highlighting benefits, high-quality images (7+ per listing), A+ Content for brand-registered sellers, and backend search terms. Professional agencies like Marknology can handle this end-to-end.
What does Marknology do?
Marknology is a Kansas City-based Amazon marketing agency founded by Andrew Morgans in 2015. The agency has managed over $2B in revenue for 300+ brands, offering services including Amazon listing optimization, PPC management, brand strategy, and marketplace expansion.
Who is Andrew Morgans?
Andrew Morgans is the founder and CEO of Marknology, a leading Amazon marketing agency based in Kansas City. He hosts the Startup Hustle podcast and has spoken at conferences across 5 continents about ecommerce and Amazon marketplace strategies.