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Amazon Demand Forecast Report

Amazon’s Vendor Central provides Demand Forecast Reports in both Amazon Basic Reporting and Amazon ARA Premium. These reports are calculated from historical demand, profitability and vendor lead times.

About The Report

Amazon’s Vendor Central provides Demand Forecast Reports in both Amazon Basic Reporting and Amazon ARA Premium. These reports are calculated from historical demand, profitability and vendor lead times. They can be used to prevent overstock and out-of-stock situations. They can also help with managing resources and inventory risk. Amazon shares three Probability-level Forecasts or “P-level” forecasts along with a Mean Forecast.

‍P70: There is a 70% chance that Amazon will buy the demand level indicated or less. There’s a 30% chance they will purchase more.

‍P80: There is a 80% chance that Amazon will buy the demand level indicated or less. There’s a 20% chance they will purchase more.

‍P90: There is a 90% chance that Amazon will buy the demand level indicated or less. There’s a 10% chance they will purchase more.‍

Mean Forecast: This forecast is used for certain vendors with longer international lead times and need about 6 extra weeks to deliver inventory.

How to Leverage the Reports

  1. ‍Manual PO Adjustments: Amazon’s Vendor Central Demand Forecast Reports are sophisticated datasets however do not account for promotions, advertising, or other external factors. This means Amazon’s Demand Forecast Reports should be considered as starting points to assess the right level of ideal inventory to fulfill consumer demand. Analyzing and enriching the data from Amazon’s Demand Forecasts with additional data such as seasonality and marketing efforts will help provide a clearer and more accurate picture of actual future demand. You can use your own enhanced forecast to highlight areas of overstock or understock risk to your Vendor Manager. While there is no guarantee the Vendor Manager can or will intervene, there is often a business case worth making.
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  2. ‍Manufacturing Forecasts: For vendors that deal directly with manufacturers, Amazon’s Demand Forecasts can help with manufacturing forecasts. This can especially be important for vendors where Amazon is a large percentage of distribution.
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  3. Trade Negotiations: If Amazon is consistently ordering less than their own Demand Forecasts, this can be a sign that item-level profitability has changed due to price-matching or other factors. It may be time to reassess trade funding for key items.

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