What To Do When Running Out Of Stock on Amazon?

First off, congratulations! Your product launch was a success and the running out of stock shows that you have a winning product. However, running out of stock (OOS) can sometimes be inevitable and these are some simple strategies you can employ to dampen the negative effects of running out of stock on Amazon.

Running Out of Inventory?

Amazon is structured in such a way that it punishes sellers who plan poorly in inventory management and runs out of stock. However, most of the times, many of the factors that cause sellers to not restock in time are often out of our control. Some examples include factory side issues, shipping/logistic issues or even a global pandemic such as COVID-19.

Amazon punishes these sellers, nonetheless by lowering the organic rank of our keywords due to the lack of daily sales that we have so painstakingly worked for. You can also trust your competition to jump ahead of you and snatch up your would-be customers.

Running out of stock will cost you in organic ranking, daily sales and overall competitiveness with your competitors.

This happens to every sellers, so fret not. There are ways to reduce this negative impact on your listing and ranking.

Should I Increase Price and Reduce PPC to Slow Sales?

Most sellers will do this: Let us increase the price and reduce PPC so that our inventory can last longer! When I finally sell out, I can close my listing safely.

Contrary to this popular believe and common sense, this strategy of increasing price and reducing PPC actually causes more harm than good in the long run. By doing this, your sales velocity will go down drastically and in the eyes of the all-powerful Amazon algorithm, your product is not converting well and thus, you deserve a much lower rank than your competitors who sells more than you.

When you finally sell out and close your listing, guess what? Your listing will be recorded as being a poor performing product and thus, making your comeback REALLY DIFFICULT. You will have to do more PPC, promotion etc. to regain back the sales velocity you once had and that will cost you much more.

The Best Working Strategy

Rather than increasing price and reducing PPC to slow sales, you should rather opt to reduce price and increase PPC to increase your sales! When you do that, you will go out with a huge sales velocity and when you finally close your listing, Amazon Algorithm remembers that on its record. This is very useful when you are back in stock.

Once you are back in stock, and your listing is relisted, your previous organic rank will remain largely unmoved and just by spending the same level of PPC, you can easily go back to the days of high sales velocity.

Hopefully this time, you would have learnt the lesson and plan properly to prevent you from getting out of stock again!

Additional Tips

When closing your listing, make sure you get the status as “Inactive (Closed)” as opposed to getting the out of stock version. Here’s how to get this.

1. In your seller central, go to “Inventory” and then “Manage Inventory.”

2. Click on the drop down box to reveal more information for that ASIN.

3. The Click on Close Listing. And you are done!

Inactive (Closed) can only be achieved when the seller close it manually. This effectively freezes your sales velocity and will not subject your Out of Stock ASIN to further degradation due to the lack of sales. This helps sellers the most in maintaining your inventory score and your previous organic ranking the best as this manual closing of listing is not attributed to running out of stock according to Amazon’s algorithm. (Your rank will still get affected, but a quick PPC campaign can help restore that easily)

Getting Inactive (Out of Stock) is very bad as this means that Amazon finds that there is no more inventory in their fulfillment centers and close the listing on your behalf. However, when Amazon closes your listing as Out of Stock, your inventory metrics will be affected AND your organic ranking will be affected greatly. You will spend a lot more in PPC or promotions when you restock just to regain the previous sales velocity you had.

So that’s all you really need to do! Sell out faster and you can regain back faster when you are restocked once again!