Properly managing your Amazon inventory is key to ensuring that you stay on top. No matter how attractive and detailed your listing is and how many high-converting keywords you rank for, going out of stock can mean a lot of bad for you.
The Impact of Poor Amazon Inventory Management
Here are a few things that you can expect to happen if you don’t get your Amazon inventory management down to a fine art:
- Sales grind to a halt – Obviously, if you run out of stock, you have to wait for your product to make its way across the oceans. This can mean weeks of zeroes.
- Your listing goes offline – If you are out of stock for a considerable period, Amazon can pull your listing. No one will be able to access the listing, even if they wanted to.
- Loss of rank – Without a listing, your keyword rankings will fall, and so will your Best Seller Rank. The competition will also then have a chance to gain ground and overtake you.
Avoid Amazon Inventory Stock-Outs
Here’s what you can do to make sure that you don’t suffer the impacts of running out of stock:
Track available Amazon inventory against sales over time.
It’s quite simple to monitor how a product is doing over, say, a 30-day period. The information is readily available in Seller Central. You can then make simple projections of how much Amazon inventory you need for each 30-day period. Based on these sales volumes over the past year, note your peak seasons as well.
The next step is to check your supply. How long does it take to process an order from the day you submit the order through the manufacturing period to shipping and until it becomes available on Amazon? Take note of certain factors such as holidays and order volume that can affect turnaround times. With these figures, you can determine exactly when you need to order more product so you don’t run out of stock.
If you have already done this, then what you need to do is reevaluate periodically. As your rank increases and your campaigns gain ground, you will see an increase in sales. This can throw your calculations off, resulting in a stock-out somewhere down the line. Make it a habit to check back regularly to make sure that the numbers haven’t changed enough to cause you Amazon inventory problems. You don’t want to tie up your capital, but you can find a fair middle ground that keeps your stock at a good level.
You wouldn’t normally want to play around with your sales volume. However, an impending stock-out can be a good reason to slow down sales.
One way to encourage fewer sales is to raise your prices. If you have sold at different price ranges in the past, you can use this data to help you decide how much to raise prices. The right price can strategically slow down your Amazon inventory depletion to stretch it out until new stocks arrive.
If you are running PPC or social media campaigns, consider slowing them down as stocks run low. This can buy you some time and prevent a stock-out or at least reduce the period that you are out of stock. Pausing campaigns can also save you money. You are either not going to have product to sell to the customers who reach your listing, or lead them to a non-existent one. Both are bad for your reputation and you are paying for this to happen.
Raising Prices versus Going Out of Stock
Sometimes you may find that you have run out of stock, and there’s not much you can do about it. As mentioned above, one way that some sellers choose to take advantage of an impending stock-out is to raise their prices. This is an age-old trick that has proved to bring in a few more bucks. It may not be the best one, however. When you raise prices, your rankings drop. Your product’s performance also falls in the aspects of click and conversion rates, and sales. You could also get negative reviews on value for money.
On Amazon, allowing your product to simply go out of stock may prove better for sales when stocks come in. The logic behind this is simple. Your product is a best seller, and that’s why it has gone out of stock. It is so in-demand that you can’t keep up! This makes it a very attractive product. Customers will be watching your listing and waiting for new stock to come in. The result is a rush that can increase your normal sales volume. You would have made good for the period that you were out of stock, and possibly longer. Just be sure that you have enough inventory on its way so you don’t run out of stock again anytime soon!
When stock comes in, your product’s performance is unscathed, and your Best Seller Rank will likely return to what it was before the stock-out. It is still advisable, however, to run promotions and bolster your advertising after a stock-out. You need to encourage more sales to recover any loss in rankings.