Too many brands accept every PO from Amazon in order to recognize the revenue Th
By Jasonlandro · February 28, 2026 · Curated by George's Blog
Too many brands accept every PO from Amazon in order to recognize the revenue
This approach often has compounding consequences months and even years down the line.
The brands excelling at managing this are taking a different approach
If Amazon has 8 weeks of cover on hand and orders the equivalent of 10 more weeks, you shouldn’t fill that PO in full
Unless you’re right before peak season, you’ll be overstocked by 8 or so weeks
Amazon’s algo doesn’t like you being overstocked
Amazon will mark down your inventory if it’s not selling at a high enough rate relative to how much inventory they are holding
We’ve also seen that Amazon has essentially put storage limits on vendors during peak selling periods like they do for sellers
It makes sense because Amazon isn’t going to hold endless inventory from a brand that isn’t going to sell short term, especially when Amazon is tight on square footage
As a result, Amazon stops ordering or slows down ordering on best sellers too, which can be crippling for a business
We saw this happen to multiple vendors in Q4 last year
The best operators look at how many weeks Amazon has on hand and in transit between LTL/FTL and DI for each ASIN and compare that to what Amazon is ordering
At the same time, they overlay a demand forecast to ensure they are adjusting up and down for any seasonal trends
If Amazon is ordering 5 weeks worth of inventory and they already have 14 weeks of cover and it’s normal season, the strong brands aren’t fulfilling that PO for that particular ASIN
I believe there’s two issues that lead to brands mismanaging this
The first is lack of data analytics
They merely don’t have the capability to analyze all this data
We’ve invested millions of dollars in our platform to do this…it’s not easy
Second, some employees have the wrong compensation incentives that cause them to want to accept POs to recognize the revenue to juice sales goals performance even though it’s not what’s best for the business
That’s easily fixed by changing performance incentives
If you’re struggling with this, odds are it’s the first issue over the second. However, you should look at both