Amazon Out of Stock:
Exactly What to Do to Replenish Your Inventory and Never Let This Happen Again
February 22, 2021
7 min read
No matter how long you’ve been selling on Amazon, there’s one golden rule you live by…
Never go out of stock.
But despite your best efforts, it’s still possible you’ve endured the ultimate hair-pulling experience: Inventory starts falling, replacements aren’t coming in, and then it happens—you’re out of stock.
Worse, you’re “Amazon out of stock”.
Now, you’re in Amazon’s bad books, and it could cost you. That’s because in Amazon’s eyes, going out of stock creates a poor customer experience and signals that your business can’t be relied on to keep their customers happy.
And there’s no way to sugarcoat it, the repercussions can be harsh. From losing sales or your prized Buy Box, and even suspension for repeat out-of-stock offenders—this is a situation you never want to be in. At least, not more than once.
The first thing to know if you’ve gone ‘Amazon out of stock’ is that it’s not always your fault. According to market and consumer research firm Statista, Amazon receives more than 200 million unique site visitors each month. That’s a lot of people to serve!
Even the most advanced Amazon sellers have trouble keeping up.
But not all is lost. With a proactive attitude, iron cast strategy, and a dash of creativity, you can keep your Amazon inventory in line, starting now.
Let’s get into some of the ways you can achieve inventory mastery to grow your business and never again go out of stock on Amazon.
First, Know How You Got Here
While it’s no consolation for the extra work and stress, working out why you hit Amazon rock-bottom can set you up for successful inventory management in the future.
Let’s look at some of the most common problems:
- Peak season woes – Crisis and peak periods can make stock management challenging even for a seasoned pro. The holiday Q4 is notoriously unpredictable on Amazon, with sales growing year-on-year. For example, during its 2019 Q4 buying frenzy, Amazon raked in a whopping $87.4 billion in revenue and $3.3 billion in net profits—that’s an increase of 21% compared to 2018’s Q4 results.
- Unforeseen changes to Amazon’s terms – Hop into Amazon’s forum, and it won’t be long before you see people complaining about the ever-changing terms of service that cause major headaches for sellers. For example, when COVID-19 hit, Amazon temporarily stopped accepting non-essential items into its warehouse. This unavoidable issue had even the most diligent sellers struggling to stay in stock.
- Sloppy inventory management – Whether innocent ignorance or downright laziness, poor supply management skills will have you out of inventory faster than you can say the word ‘stock.’
One of Amazon’s more recent changes was inventory limits, which are now influenced by your Inventory Performance Index (IPI). Your IPI assesses four key metrics to determine your account’s health before confirming your inventory storage allowance—it’s definitely something to keep an eye on moving forward.
No matter how you got here, the goal is to get yourself out of this situation as quickly as possible. Here’s what to do next.
Amazon Out of Stock: What to Do When Your Worst Nightmare Comes True
First thing, don’t panic. There are specific steps you can take to rectify the situation and get back in Amazon’s good graces.
Here’s what you need to do:
Call in Reinforcements from Your Suppliers
As soon as you get that pesky ‘out of stock’ notification, you know you need to act fast. The first step is to get your replenishment order on the road ASAP.
Be sure to call your supplier directly to express the urgency of the situation and find out if they can produce your goods quicker, without compromising quality or safety standards.
To get your items into Amazon’s warehouse faster, you can send some of your inventory by air. But be careful because this can get expensive. The amount you air cargo should be enough to cover the maximum shipping time of your chosen transport method, plus an extra two weeks’ worth of buffer stock in case any delays occur.
This will bridge the inventory gap while the bulk of your order makes its way to Amazon by sea and is then processed by Amazon.
Temporarily Hike Your Prices
Raise your prices so that they’re higher than your competitors’. This will act as a deterrent to buyers because many people window shop before purchasing and are more likely to go with the better deal.
To avoid being flagged by Amazon for price gouging, make sure the change is significant enough to be noticed, but not significant enough to be called ridiculous.
A week or so before your goods arrive at Amazon’s warehouse, you can begin reducing your prices. Do this in small increments, spaced out over time.
A listing with significant drops in price can trigger Amazon’s alarm bells if done over a short period of time. This can lead to a price alert problem and can even result in having listings removed from featured product promotions. So, like all things Amazon selling, you’ll want to proceed with caution.
Switch to Fulfilled by Merchant (FBM)
Temporarily Amazon out of stock? Switch your account to FBM and start fulfilling orders yourself. This may be a bigger challenge if you’re a dropshipper, but it’s still achievable if you can get some domestic stock to your address until your FBA stock arrives.
Seek help from an external fulfillment center or even your internal team. Just be sure to give your staff a realistic end date and explain that this is an ‘all-hands-on-deck’ moment for the business. This will help you avoid issues with your team, which can further delay your recovery plan.
And, yes. It is true that your rankings may fall slightly since Amazon prefers FBA sellers with swift delivery times and solid customer experience. But at least you’ll have a means of getting revenue back into your Amazon business and can avoid being entirely out of stock.
Set a Restock Date or Apply the ‘Holiday’ Setting in Your Store
If you find yourself Amazon out of stock, you can switch on the ‘temporarily out of stock’ notice by setting up a restock date in your Amazon Seller Central account.
This will allow you to take back-orders for up to 30 days before your stock lands in Amazon’s warehouse.
Alternatively, if you can get a new batch of goods to Amazon within three days, there’s the option to turn on the holiday setting. This will make your listings inactive and hide them for 36 hours.
Here are the exact steps to take:
- Go into your Seller’s account and click ‘Settings’, and then ‘Account Info’.
- On the ‘Seller Account Information Page,’ click the hyperlink ‘Going on holidays?’
- You’ll then have the option to either make all your listings in all your marketplaces inactive or choose specific marketplaces to deactivate.
- Click ‘save’
And, that’s it!
Now that you’re safe for 36 hours, go get your emergency stock to Amazon, stat!
How to Never Run Out of Stock on Amazon Again
While it may at times feel like going out of stock on Amazon is inevitable, you can avoid it completely with the right strategy, tools, and attitude.
Once you’ve replenished your inventory and are safely out of crisis mode, sit down and develop a plan to make sure this never happens again.
Become a Sales Forecasting and Inventory Management Ace
As an Amazon seller, it’s vital to invest in sharpening your sales forecasting and inventory management skills.
Acquiring a strong aptitude in these areas will be invaluable for fine-tuning your stock orders and scaling your business. Plus, they’ll save you a lot of money and sleepless nights.
And you don’t have to do it alone. With the right tools, managing tedious inventory tasks with spreadsheets and emails can be a thing of the past.
Not only is Amazon’s recommended ship date for restocks incredibly accurate, but there’s also plenty of software to help you predict your stock requirements with greater accuracy, such as Sellics and Brightpearl. You can even set up automatic stock reorders that activate when a specific inventory threshold is reached.
Lean into these tools to gather insights on your Amazon store that will help you make accurate, data-driven decisions and never go out of stock again.
Craft a Robust Inventory Management Strategy (and Get Busy Executing It)
Businesses can avoid many issues with proper planning. Unfortunately, most of them still fail to make and implement a plan.
In one seminal study, Harvard Business School found that an astonishing 90% of companies fail to implement their strategies successfully, and 86% of leadership teams dedicate less than one hour per month discussing strategy.
Spending less than an hour a month on strategy isn’t going to do a whole lot for any business, let alone Amazon sellers.
Once you’ve laid a strong educational foundation, you’ll need to figure out how to consistently replenish your stock and stay ahead of the eight-ball on Amazon. Document and share your new strategy with your team and schedule regular monthly, quarterly or seasonal check-ins to review how the strategy is performing.
The beauty of this approach is that it will allow you to optimize through incremental changes, while preventing you from being the bottleneck since your staff will now have access to a defined plan of action.
There are three main areas your inventory management strategy should include.
1. Think ahead when ordering stock
While it can be easier and more cost-effective to send inventory from your supplier to Amazon’s warehouse, it leads to a dangerous guessing game of when to reorder.
Shipping by sea from countries like China has lead times of up to 50 days, so waiting until the last minute is risky. It leaves no room for production issues, port closures, customs backlogs, and Amazon warehouse processing delays—all things that are par for the course in any eCommerce business.
Instead, set a minimum ‘in stock’ number. Use your forecasting tools to work out the date you’ll reach this figure, then place a refill order 6-8 weeks before that date.
Also, be sure to order more than what you’ll be sending to Amazon directly. You’ll need some product for restocking and the rest for your backup plan (which we’ll dive into shortly). Double your usual order, and you should be covered.
2. Partner up with a reputable Third-Party Logistics (3PL) company
To slash your lead times for stock replenishment, enlist the help of a 3PL company to send some goods to a domestic warehouse.
Since 3PLs can feed your stock into Amazon and send you inventory level notifications, you can almost eradicate Amazon out of stock issues completely simply by bringing a trusted 3PL into the mix.
3. Have emergency supplies at the ready
As the saying goes: ‘Stay ready, so you don’t have to get ready’. Apply this mindset to your Amazon stock management strategy and you’ll have way fewer headaches in your future.
Here’s what an ‘Amazon out of stock’ ultimate backup plan could look like:
- Keeping inventory in your home or personal storage
- Ordering raw materials and packaging to assemble
- Having a local supplier that you can order small stock batches from
- Pulling stock from another outlet you own and replacing it once your bulk order arrives (i.e., an eBay or retail store)
- Securing a line of credit limit to replenish inventory when cash flow is tight
No two eCommerce businesses are the same, and there are many feasible routes to take. Choose the options you can stick with and those that will cause the least disruption to your business.
Amazon Seller Inventory: Your Game Plan Is Key to Your Growth Goals
Going out of stock is a hair-raising experience. You’re in a battle to save your business’ revenue, growth momentum, and the brand you’ve worked so hard to build.
It’s a tough road to recovery, but with good planning and razor-sharp execution, you can get back into the Amazon good books.
Have you managed to dodge the Amazon out of stock bullet so far? Good for you! You can keep this up through solid preparation, starting with the tips outlined in this guide.
If you’re looking for funding options for the next stage of your Amazon journey, SellersFunding’s Credit Line solution can help. We help eCommerce businesses like yours secure working capital for full control of their inventory.
Don’t wait for an Amazon out of stock disaster. Take control of your business today by securing the funding you need to optimize your inventory management and thrive. You can start here with zero strings attached.
Amazon Q4 Sales: 5 Steps to Prep Your Store for the End-of-Year RushContinue reading
Ecommerce Quality Assurance Gone Wrong: 7 Hilarious QA Fails (and How to Avoid Them)Continue reading
Q4 Online Sales: 5 Inspirational Brands that Hit Big Last YearContinue reading
Singles’ Day: 6 Ways to Prep China’s Biggest Shopping Day of the YearContinue reading
Halloween Ecommerce: 7 Ways to Prep for the Spookiest Retail Rush of the YearContinue reading
Alternatives to Amazon: Diversify Your Sales Channels with These 3 Awesome Ecommerce…Continue reading
7 Ways to Get Your Customer Community Marketing Your Brand (Without Them Even Knowing It)Continue reading
Debt Financing: Demystifying Debt to Grow Your BusinessContinue reading
Line of Credit Too Low? Here’s What to DoContinue reading
How a Healthy Cash Conversion Cycle Can Help Your Ecommerce Business ScaleContinue reading