Running out of stock on Amazon is a situation every seller wants to avoid. Apart from the obvious loss of sales, it can also negatively impact your product ranking due to Amazon’s A9 search engine algorithm. In this blog post, we’ll provide actionable advice on how to manage out-of-stock situations, focusing on the following four points: 1) Try to never run out of stock, 2) What to do prior to running out of stock, 3) What to do while being out of stock, and 4) What to do when the product returns in stock.
Always strive to avoid running out of stock
Investing in a robust inventory management system is the key to preventing stockouts on Amazon. Stay proactive and use the data provided by these systems to anticipate and address any potential inventory issues before they become a problem.
What to do prior to running out of stock on Amazon
If you notice that your Amazon stock is running low, there are two primary approaches you can take: 1) Slow down velocity to maximize profit, or 2) Leave everything as is.
1) Slow down your sales velocity to maximize profit by:
– Raising your price
Pros: Slows down organic sales volume, extending stock life and increasing profit margins.
Cons: Reducing organic sales volume can negatively impact product ranking and Amazon Best Seller Ranking (BSR).
– Stop your Amazon PPC
Pros: Slows down paid sales volume, extending stock life and increasing operating profits.
Cons: Reducing sponsored ad sales might also reduce product ranking, though potentially less so than reducing organic sales.
2) Leave everything running as is
Pros: Maintains high ranking until out-of-stock, minimizing any potential ranking penalties.
Cons: Increases the likelihood of running out of stock sooner and losing out on the short term profit.
What is the right approach to take? As you saw there are pros and cons to both approaches. IG PPC ran a poll on LinkedIn on this topic, and below are the results.
What to do when you are out-of-stock on Amazon
When your item is out-of-stock, it is important to try to minimize the affect it will have on the product’s ranking. There are 3 approaches you can take.
1) Close the listing
Some claim that by closing the listing, the product will not accumulate a negative sales history in the eyes of the Amazon A9 algorithm, because the listing is not active in Amazon catalog.
2) Suppress the listing
Instead of closing listing yourself rather let Amazon suppress the listing by breaking one of their product listing rules, like adding text to the hero image.
Some report that this method works even better than closing the listing because suppression is a stronger form of removing the product from Amazon’s catalog.
Pros: By closing listing you are preventing a low CTR to your product
Cons: 1) Shoppers will not see your product. 2) Returned items from previous sales cannot be re-purchased
It’s important to note that the suppressing listing methods don’t always work. Some sellers have reported having success with it, and others didn’t. But it doesn’t hurt doing it as it has no downside.
3) Leave listing open
If you leave the listing open, Amazon will automatically close your PPC, but people will be able to see your product listing, read reviews, etc.
Pros: By leaving your listing open people will still be able to find your product, compare it to the competition and maybe wait until you are back in-stock. It might also tell Amazon A9 search engine that customers are still showing interest in your product.
Cons: When customers click on your Amazon product listing and don’t purchase, your click-through rate will drop significantly, lowering your ranking since CTR is a big score in the way the A9 search engine configures ranking.
When your out of stock items are en-route to Amazon’s warehouse – Should you use Amazons In-Stock head start program?
Amazon allows their FBA sellers to take advantage of a program called In stock head start. Once you notify Amazon when your item will be at their warehouse they will allow your products to be listed and purchased with an in stock soon stock status. This setting must be closed if you do not wish to take part in it.
Pros: Enrolling your product in Amazon In-Stock Head Start program will make your product discoverable, while sales might be lower you want to make sure your product is seen with your competitor on Amazon listing page.
Cons: Depending on your product’s arrival date, Amazon “In stock soon” products sell significantly lower than stocked products, which may reduce your item’s Amazon ranking.
Many Amazon sellers will choose to allow the in stock head start switched on but will close their Amazon PPC to keep their ACOS score in check
What to do when your items returns into stock on Amazon
Upon restocking, monitoring your product closely is crucial, as its ranking and performance may vary. Depending on the product and on how long the product was out of stock for, different products will behave differently. It’s essential to keep a close eye on it and to make sure it is picking up the momentum it had before going OOS.
Treat it as a new product launch.
Double down on PPC and decrease the price if necessary to regain momentum.
Look at your organic keyword tracker and see where the main keywords are ranking now and where they were ranked before going OOS. Increase PPC on the keywords you want to regain ranking.
If you see the product picking up nicely and it’s regaining momentum, you could adjust PPC and pricing to the regular.
Conclusion
Running out of stock on Amazon can be a challenging experience for sellers, but by following the advice outlined in this blog post, you can minimize its impact on your product’s performance and ranking. Stay proactive, make informed decisions, and continually monitor your inventory to ensure your Amazon business remains on track.
