Running out of stock on Amazon can be disastrous and Amazon Sellers should try to avoid if at all possible. Obviously if you run out of stock, you won’t have any more products to sell. But there are more ramifications to running out of stock on Amazon than just losing potential sales. Not only will you lose potential sales, but your product rankings will suffer, you’ll lose money, and your product listing will go offline and no longer be shown in search results.
You can’t sell what you don’t have.
When your product goes out of stock, Amazon doesn’t show it in search results. Think about it, if every product listing was shown in search results, even those listings that the products are no longer available, customer would be shown millions of product listings. Plus, it would be infinitely frustrating for customers trying to find a product if they have to weed through listings for products that aren’t available.
Going out of stock is detrimental to your product rankings so you should avoid it if you can. Your keyword rankings and Best Seller ranking will also be affected by going out of stock. This gives your competition the opportunity to swoop in and take your share of the market. Amazon sees going out of stock as a sign of unreliability, and as punishment they strip you of the rankings you’ve worked hard to earn. Hence, inventory management is very important for the continued success of your Amazon business. You don’t want something avoidable like running out of stock on Amazon to cause issues.
Inventory management shouldn’t be neglected. There are multiple tools you can use to stay on top of your inventory. Amazon has a tool built in to Seller Central through the Amazon Selling Coach that will estimate when your products will go out of stock based on your sales. You can also pay for a tool like skubana or InventoryLab if you want even more features for your inventory management.
When considering your inventory management, you should remember that if your products are in the Fulfillment by Amazon (FBA) program then you stand to face far greater ramifications than if you are doing Fulfillment by Merchant (FBM) if you end up running out of stock on Amazon. Consider how long it normally takes to have your products replenished for FBA; calculating, picking, labeling, packing, shipping and processing all takes a long time which can even further impact your product rankings. Plus, if it’s around any major holiday, you can rest assured that time will be at least doubled if not more since everyone is trying to restock at the same time. Carefully plan your stock restocking so your store doesn’t end up running out of stock on Amazon.
If you’re asking yourself, how much can it really cost me if I end up running out of stock on Amazon? The answer is completely subjective, based on several factors you’ll need many pieces of data and a spreadsheet to calculate. But the simplest way to answer that question if you don’t want to do all those calculations is: A LOT. You have to consider what your normal sales rate is and completely throw that out the window since your sales will come to a screeching halt once your listing is marked as ‘Currently out of stock.’ Plus, you have to take into account the longer-term cost of how future sales will be impacted if and when your products come back in stock.
Amazon does offer a tool to show you the cost of running out of stock, but the tool is set to be deprecated and won’t be available for much longer. Amazon has not given a set date on when it will be taken down. You can access this tool by clicking here. This tool will show you the estimated lost sales so you can see how much money you are likely losing by running out of stock on Amazon.
Luckily, once your products are back in stock any new sales will automatically start boosting your product rankings. The best way to get a big boost in sales once your products are back in stock is by running a promotion like lightning deals or a price discount. It’s also a good time to really utilize your email lists and social media channels to push more traffic to your listings. This kind of strategy can reduce the time it takes your sales to bounce-back from two to three weeks to just one week.
Running out of stock on Amazon can pretty much undo all of the hard work you’ve done to boost your product rankings, so you should take extensive measures to make sure it doesn’t happen. Using Amazon PPC can help get your product rankings back faster if you are able to restock your products. Automating and optimizing your Amazon ads is the best way to ensure your campaigns perform well. Sellozo’s platform uses machine-learning to analyze past campaign performance. The platform then optimizes the campaigns based on past keyword performance.