Having a hot product that flies off the proverbial shelves of your Amazon store is a good thing right? Well, in theory, yes, so long as you don’t sell out! Amazon wants to see that you have a popular product that sells well, of course. In addition, they want to see that you can keep up with the demand. Running out of stock has a negative impact on your Amazon listing and account and can impact your future sales.
The Importance of Inventory
Captain Obvious here with the first reason having stock is important. Nothing to sell means no sales. If you’re not making any sales, you don’t have any money coming in. If there is no money coming in, well, you can fill in the rest. Equally as important as making money is to ensure that you continue to make money in the future. Creating momentum with your listing with PPC campaigns, sponsored product listings, etc. is an expensive and timely process.
What Happens When you Run Out of Stock
- You lose the momentum that you paid to build through PPC
- Your listing rankings drop
- You will no longer appear as a seller on the listing
- If you were the only seller, the listing will disappear completely
- You will lose to your competitors
- Competitors’ products can take your place in Amazon’s search results and ultimately the sales. This is particularly true if it’s a one-off purchase)
- Hijackers have a greater opportunity to hijack your listing, which is notoriously difficult to deal with and resolve.
How to Avoid running out of stock
Avoid running out of stock by sticking to the three Ws:
- Be sure there are always items being worked on. In other words, always have an order in production with your supplier.
- Always have products in transit. The most cost-efficient way to do this is via sea freight. Hence, always have products on the water.
- Ensure you always have enough items in inventory to last you until the order on the water arrives. This one probably sounds like a no brainer to an experienced Seller. However, a new Seller may not be as keen to timing their inventory forecast with their shipment arrival.
What do to when you’re nearly out of stock
Sellics conducted a case study where they tested the best practices for an Amazon listing that is nearly out of inventory. Below are some of the tactics tested and tips to help Sellers in this situation!
Tactic 1: Cease all marketing spend
Immediately pause all marketing spend to slow down sales. You’ll want to discontinue any PPC campaigns, and promotions or deals. The idea behind this practice is that ceasing all marketing efforts opens the door for your competitors’ listing to rank above yours. With your listing pushed further down the list, the less visibility you will have, thus resulting in fewer sales.
Tactic 2: Slowly increase your pricing
While this helps you save what inventory is left by slowing sales, it can have adverse effects on your listing. Increasing your product pricing can affect your click-through rates, conversion rates, and total sales. All of these can have a negative impact on your product’s ranking long term.
Tips for Success!
- Have Backup stock at a domestic warehouse to ship in immediately. Utilizing a domestic 3PL warehouse, such as Noviland, can act as a backup for your majority stock. You can also use this backup stock to experiment with selling on various platforms such as Walmart Marketplace and eBay.
- For quicker replenishment, air freight a portion of your order coming from China. This way, you can maintain some inventory while waiting for the rest of it of your shipment to come by vessel.
- Once your full shipment arrives and you’re restocked, double down on sponsored products and PPC campaigns to re-stabilize your rankings. Ideally, you’ll be spending double or triple what you were spending prior to running out of stock.
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Lisa Kinskey is the Marketing Assistant of Noviland, Inc., a rapidly growing sourcing & purchasing solution making sourcing from overseas factories simpler. Lisa has a background in sales, marketing, and event planning, and currently resides in Kennesaw, Georgia.