What to do if the product is out of stock

1. Consequences of out-of-stock

1. Loss of sales. The most direct consequence of out-of-stock is that sales are suspended. There must be good sales before out-of-stock, but during the out-of-stock period, without sales, sales performance will also drop sharply. This impact is not the most important. The most serious consequence of out-of-stock is reflected after out-of-stock.

2. Loss of confidence. For many sellers, facing the shortage of goods is actually a desperate situation. Seeing that the goods are out of stock when they are making money, they estimate the future sales based on the sales before the shortage, prepare a large number of goods, and finally send the goods to the FBA warehouse by express delivery, air transportation and sea transportation. They originally hoped to continue the glory before the shortage, but the fact is often that no matter how hard you try, the sales volume does not improve. The advertising cost is higher and the product price is lower, but there is no change in sales volume.

3. Loss of competitive advantage. During the period of out-of-stock, the external environment may not change significantly. Competition still exists, but it will not become more intense in a short time, and the industry trend will not change in an instant. The fundamental reason for the loss of sales after the out-of-stock is that the weight of your own listing has changed greatly due to the out-of-stock. It can also be said that during the out-of-stock period, the weight of your own listing has been greatly reduced, the ranking has dropped, and the keyword quality score has been reduced, which is reflected in your own listing. The sales volume cannot be increased and the advertising cost cannot be reduced.

During operations, sellers must be fully aware of the serious consequences that may result from out-of-stock situations, and try their best to ensure that their flagship products are always in stock. Only in this way can they ensure that operations get better and better.

2. How to prevent out-of-stock

1. If financial resources permit and sellers are sure that the products do not have infringement or quality issues, they can stock more inventory appropriately. Sufficient quantity is a necessary condition for creating hot-selling and best-selling products.

2. In terms of delivery, sellers can use a combination of express delivery, air transportation and sea transportation to ensure timeliness and reduce freight costs. At the same time, they should also adopt an appropriate quantity and frequency of each shipment, and do not wait until the stock is out of stock before rushing to replenish.

3. Ensure good communication with suppliers and ask them to prepare goods for you in advance or reserve a batch of goods in your own inventory in advance in case of emergency.

4. If the goods are on the way and the inventory in the FBA warehouse is almost sold out, the seller can adopt the method of self-delivery and follow-selling to ensure that the listing is still online even if it is out of stock.

5. Since Amazon has multiple sites, when replenishing stocks at each site, as an operator, you should clearly know the logistics time of each country, the overseas warehouse code of each category, the cycle of listing and arrival, etc.

7. Amazon’s backend has complete sales reports, which can tell you exactly how much is sold each month. So once we are approaching the red line, we will directly replenish the goods through express delivery. Even if there is no profit, our ranking will not drop. Then we will accelerate replenishment through air delivery to maintain normal profits. We will also gain competitiveness through large-scale replenishment through sea delivery if conditions permit in the later stage.

8. By combining new and old goods, discarded goods and heavy goods, and best-selling goods and second-best-selling goods together, the cycle and frequency of general goods can be increased, thereby reducing logistics costs.

9. The most meaningful method, which is also not adopted by most sellers, is that sellers can follow the sale of a listing and use FBA for delivery. That is, for the same listing, the seller has two SKUs (or even three) that are all shipped by FBA. If sellers follow the sale of multiple SKUs of the same listing and use FBA for delivery, and if they can cooperate with the "small batch, multiple batches" delivery method, so that your listing is often in a state of almost sold out (Only X left in stock), the sales of this listing may also be better.

10. You can use the software to track product replenishment. Cover all overseas warehouses and third-party logistics, accurately reflect the inventory status of each SKU. Automatically generate purchase orders and prepare goods before the peak season.

3. The key lies in regular monitoring and accurate forecasting

Break it down into specific areas: Source . Contact suppliers and develop several suppliers to deal with various emergencies.

1. Ask suppliers about delivery time

Ask clearly how long it takes from ordering to delivery. If it is related to the order quantity, you also need to ask for the specific time.

2. Find out the supplier’s peak season

Find out their holidays and if they have any closed periods, such as when production slows down for inventory management or when people are on vacation.

3. Ask them about their confirmed monthly shipment quantity

This will give you an idea of ​​how many backup vendors you need, or if it’s worth marketing aggressively to get volume discounts.

4. If you do self-delivery, ask about the delivery time

Then count the delivery times of the past few times, and then monitor the delivery times in the future, so that you can know the average delivery time and the error value you can tolerate to avoid out-of-stock situations. If you are doing self-delivery, check the delivery times in the past, and if possible, calculate the average over the past year. Don't forget about delays during peak periods such as the Christmas holidays.

5. You need to know the number of units sold per month for at least the past 12 months

Make sure to account for any possible stock-outs. Then, you need to calculate the supplier's delivery time based on how much inventory you need during your peak season to ensure that you will not be out of stock during the peak sales season. Then communicate with the supplier so that they are ready to produce orders at any time.

6. Calculate the node of return order

Figure out how much product you need in inventory to cover your supplier’s lead time, taking into account how long it takes to actually send them a purchase order, as well as delays in production and shipping due to holidays, etc. Just check the Restock Report in Seller Central to know when to source.

4. Solutions after out of stock

If out of stock occurs within 2 weeks :

1. Adjust product prices

①Price increase

This is a common routine operation for sellers, because submitting can reduce product sales and avoid out-of-stock situations. However, this method is also dangerous. Raising prices will quickly lower product rankings. In addition, Amazon’s backend can directly identify store inventory. If you forcefully raise prices due to insufficient inventory, Amazon may reduce its support for your traffic. After timely replenishment, the ranking will be lower than before after the original price is restored. The advantage of this method is that it can reduce certain losses and delay the out-of-stock cycle. The disadvantage is that the shopping cart may be cancelled, which will reduce the conversion of listings and affect the store weight.

② Price reduction

If the seller can guarantee that the product can be replenished within 2 weeks, it is best to adopt a price reduction strategy. The price reduction must also ensure that the product has a certain profit margin. At the same time, the advertising budget should be increased to quickly replenish the product in a short period of time. This can increase the product ranking in the short term. As long as the seller replenishes the stock in time, the ranking will only fluctuate within a small range in the later period, and there will be basically no major damage to Listing .

2. Emergency replenishment

When facing FBA out-of-stock, some sellers will urgently replenish goods from China, use red orders to quickly ship goods to the warehouse, and generally sign for them within 3-5 days. For sellers with urgent goods and high customer unit prices, this method can be used to urgently replenish goods. Although this method will have some impact on rankings, sales can quickly increase after the goods are put into storage, so the impact on listing will not be significant. The advantage of this method is that it can alleviate the out-of-stock crisis in a timely manner, and the disadvantage is that there is enough supply before it is needed.

3. Follow your own listing

Sellers should follow-sell their own listings by self-delivery before they run out of stock. In this case, firstly, they can avoid being automatically removed from the shelves by the system due to FBA stock shortages, and secondly, they can avoid being treated as ownerless listings and followed by other sellers after they are removed from the shelves. The advantage of this method is that the decline rate of keyword rankings slows down, and the disadvantage is that sales are affected by the timeliness of arrival. Of course, when following the sale before FBA runs out of stock, it should be noted that the price of the follow-sale should be higher than the price of FBA delivery, because the price of self-delivery is high, which can avoid the flow of shopping carts to self-delivered SKUs and ensure that the shopping cart remains in the FBA SKU as much as possible. If the self-delivered SKU happens to generate an order, the seller can create a multi-channel delivery order after the next batch of FBA inventory is put on the shelves, and the Amazon FBA warehouse will help complete the delivery.

4. Make the Listing Currently Available​

After the product is completely out of stock, you must make the listing currently available and never follow the sales on FBM. If Amazon Warehouse Deals follow the sales at this time , you will have to spend money to buy it out, since there are not many of them anyway.

5. Pause all running ads

Before restocking, stop running ads. Amazon PPC is the main one, but any other ads associated with Amazon listings may also need to be paused. This will reduce the visibility and traffic of the listing to avoid inventory being bought out.

6. Increase the price of goods

Do this only after pausing all ads has not worked for a few days. Go to a level that is beyond your customers’ tolerance level. Usually one level higher than your competitors. This will make buyers less likely to buy. However, it’s best not to do this before pausing PPC unless you want to see them buy your competitors’ products.

7. Readjust the new return order time point and buffer inventory

Recalculate to take into account any circumstances that may cause stock outs.

If out of stock lasts for more than 2 weeks :

If the out-of-stock time exceeds 2 weeks, the listing is basically useless. You can create a new identical listing , and then send the replenished FBA directly to the new listing . After the FBA arrives at the warehouse, merge the two listings , adjust the old listing inventory to zero, and then promote the new product. Since there is a new product bonus period, you can increase advertising and quickly improve the product ranking.

5. How to restore ranking after out of stock?

1. Promotions and Giveaways

It will cost more, but will allow listings to recover quickly. This method is quite effective if there is enough cash flow to cover the lost revenue, advertising, and free items during the out-of-stock period.

2. PPC Advertising

Amazon PPC improves the organic ranking of listings by displaying them in priority positions while increasing visibility .

6. Specific remedial measures for stores affected by out-of-stock

1. Optimize search engines and increase CPC advertising investment

Using CPC (Cost Per Click) advertising can bring sellers the most real traffic and actual conversion of potential consumers. The CPC advertising model allows sellers to expand their publicity while only paying for the sellers' behavior of clicking on the advertising link, not the number of times the advertisement is displayed. It is one of the best ways for sellers to promote their stores.

2. Advance sales forecast based on big data analysis

Sellers should communicate with some suppliers they have been working with for a long time in advance to find out when and how much goods will be needed. Of course, it is up to the sellers to make their own judgment on how much to purchase. It is recommended that sellers can develop an order status table for each category and each month based on their own store's monthly turnover and product sales, and analyze and estimate the store's future sales in combination with Amazon platform policies and changes in major industry events.

3. Flexible and reasonable regulation of supply chain demand

Sellers should consider the continuity of store supply and negotiate with suppliers on delivery time and quantity to ensure store inventory. Sellers need to find a long-term and stable supply chain that can communicate effectively and replenish goods in a timely manner to match the seller's procurement efficiency and consumer purchasing needs when store sales surge.

4. Send express with good timeliness

My personal suggestion is to use FBA for delivery as much as possible, which can at least ensure the timeliness of delivery.

(Compiled from: Sellers’ Home, Cross-border E-commerce Winners Club)