Reducing Shortages: Practical Tips for Licensed Merchandise Amazon Vendors

If you're a licensed toy or game Vendor on Amazon, you already know the stakes are high. You're juggling seasonal surges, forecast unpredictability, and consumer demand that shifts with the latest trending character or film release. When stock runs short or orders get partially fulfilled, you're not just risking a chargeback, you’re risking shelf space, reputation, and long-term profitability.

Your strategy to reduce shortages requires proactive vendor operations. We’ve outlined practical steps that licensed merchandise vendors can take to reduce shortages and stay on the right side of Amazon’s ever-tightening supply chain rules. Let's look at the detailed view on each of these sub types. 

Why Do Shortages Happen?

Shortages on Amazon Vendor Central often stem from preventable misalignments between what Amazon orders and what vendors ship. Common causes include:

• Manual receipt process at Amazon
• Labelling Defects
• Packing inaccuracy 
• Catalogue Defects (case pack vs single)
• Carrier Loss, Overlabelling or Damage

For vendors managing hundreds or even thousands of SKUs tied to fast-moving licences, these problems compound quickly.

If this sounds familiar, you’re not alone. We explored some of these mixed carton and SKU-level challenges in Managing Mixed Cartons: How Toy & Game Vendors Can Avoid Amazon Chargebacks and Inventory Management Strategies for Toy Vendors. But let’s dig deeper into shortage-specific issues.

1. Start with Data: Monitor Shortage Patterns

Before you can fix a shortage problem, you need to know where and why it’s happening. Begin by analysing:

• What is the total magnitude of shortages for the last 12 months?
• Are there specific  ASINs triggering shortages most frequently?
• Are shortages happening during specific periods or year round??
• Are there patterns in DC location or carrier e.g. small parcel vs pallet?

Use Amazon’s Vendor Central reports to track trends over time. If you're seeing consistent issues across the same SKUs, it’s likely a structural, not seasonal, problem.

2. Streamline Your Confirmations and ASN Process

Confirming orders quickly and accurately is essential to reducing the risk of shortages. A late confirmation or worse, a confirmation that doesn’t match what you can actually ship can create a domino effect across the supply chain.

Consider:

• Automating PO confirmation and shipment creation as much as possible.
• Utilise EDI Order confirmation, ASN and invoice to ensure that what is accepted, shipped and billed are totally aligned. 
• Set up your Warehouse team with License Plate Receive compliant labels for correct dispatches.
• Implementing exception alerts for partial fulfilments or shorted lines.
• Using your ERP or EDI tools to validate shipment data before sending ASNs
• Begin the pick-pack-ship process as soon as possible to check for shortages; use barcode scanning where possible to validate accurate picks.
  
  

The fewer manual interventions, the better. KhooCommerce can help automate these touchpoints, saving time while improving accuracy.

3. Clean Up Your Internal PO and SKU Mapping

One of the most common culprits behind shortages is mismatched PO and Catalogue data. If Amazon’s PO requests don’t align with how your ERP recognises pack sizes, units of measure, or configuration codes, you’ll end up with fulfilment mismatches.

Ensure:

• Your ERP or inventory system matches the SKU structure Amazon uses
• Case packs and singles are correctly being shipped and labelled correctly. 
• Mixed cartons are labelled with 
• Case packs and inner packs are correctly labelled and accounted for
  
  

The goal is to create what we call “data harmony” between systems. We dive deeper into these principles in the Ultimate Amazon Vendor Guide, particularly in the sections on case configuration and shipment validation.

4. Revisit Your Safety Stock Strategy

Holding too much stock eats margin. Holding too little costs orders. For licensed merchandise, where demand can spike without much warning, dynamic stock planning is essential.

Start by:

• Segmenting SKUs by seasonality and velocity
• Creating tiered safety stock levels based on Amazon’s forecast accuracy (or inaccuracy)
• Building in supplier lead times for made-to-order or low-volume lines
  
  

If you’re still managing this on spreadsheets or guesswork, it might be time to look at smarter demand planning tools or at least integrating more structured forecasting into your operations.

5. Collaborate With Amazon, Proactively

Finally, don't wait for shortages to stack up before taking action. Reach out to Amazon Vendor Managers or Support when you spot repeat shortage issues on specific SKUs or DCs.

Provide:

• Data showing historical fulfilment accuracy
• Evidence of systematic issues (e.g. misrouted POs, forecast inconsistencies)
• Proposed solutions or changes to your catalogue setup
  
  

The more data-led and proactive you are, the more likely you are to get traction and protect your vendor scorecard.

Next Steps: Turn Insight into Action

Smarter decisions start with early action: aligning your systems, cleaning up SKU data, and improving stock visibility across your team and partners.

If you’re already feeling the strain of Amazon’s shortage penalties, or struggling to keep up with shifting forecasts, here are a few resources worth bookmarking:

• The Ultimate Amazon Vendor Guide – A deep dive into packaging, PO alignment, and operational best practice
• Managing Mixed Cartons – Why carton errors are one of the most common triggers for chargebacks and shortages
• Inventory Management Strategies for Toy Vendors – Tips on keeping SKU-level data clean, accurate, and Amazon-ready