How to run out of stock the right way?

The sales velocity is increasing but you are getting close to running out of stock… Who didn’t experience it, right? So finally, it hits you, that's it, you have no goods. So how do you get back on track to the sales velocity you had before you ran out of stock?

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If you ask 10 sellers how NOT to run out of stock, you will get probably 50% of them saying it is so wrong and damaging so you better do your best not to run out of stock by doing the following:

1. increase the price of the product

2. decrease the product's advertising budgets

3. or even close all campaigns related to the product

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Sounds familiar?

Well, most of the sellers will hurry to implement the above. It seems that they did achieve their goal first, the sales went down, and in the meantime, the newly ordered stock is on the way. Then you ran out of stock anyway, but hey you earned a few bucks more per unit, hurray!? Not really...

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Now here is what happens behind the scenes. The increased price and the closed campaigns caused your BSR ranking to deteriorate. If you have been ranked high on the first page, now you are far from there.

Those sales you thought you saved… did not just vanish, they actually went to your competitors who sold and earned at your expense.

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It’s true that running out of stock will always result in lost income that the competitors will benefit from, but the question is if you have already run out of stock, or you’re on your way to, how do you do that correctly that when the stock returns your sales velocity and rank will return as well asap?

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Now hear me out - Getting back to your sales momentum is possible! Let me tell you what works perfectly for us every single time:

1. don’t raise your price, whatsoever

2. don’t lower bids or budgets

3. and don’t close any of your PPC campaigns

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Good, now you are out of stock, here are the first two important steps:

First step: close the listing (Scary? Don't worry, reopening the listing is very simple)

Go to the “Inventory” tab->click on ”manage all inventory”->on the right product, on the menu arrow near the “edit” button, hit “Close listings”->Confirm (If the listing does not close, you probably have a ?Business Price in place, cancel this offer and repeat the process.)

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Step Two: Now go ahead and close all the campaigns related to the product.

The reason for that strategy, is that Amazon's algorithm “remembers” the sales velocity you were at before going out of stock, simple right?

If you raised the price and the sales decrease, that's what the algorithm will remember.

You closed or decreased PPC budgets, which caused a decrease in sales, this is what Amazon's algorithm will remember.

So obviously we prefer the algorithm will remember our high sales rate on the eve of going out-of-stock and not the slow sales rate we artificially created…

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Now, it’s important you close the listing and all campaigns as well (yeah, PPC stops anyway once out of stock, but keep reading). So, while you are out of stock and your listing shows Inactive (Out of Stock), some customers might return the product they purchased from you, in this case, a unit goes back to your inventory and your listing reopens automatically.

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The PPC which is aimed at selling dozens of units per day, is reactivated automatically as well if you are not closing them manually, then you find yourself spending a lot of money on a single sale you can make, and then after selling it, your listing goes Inactive (Out of Stock) once again.

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After 3 days, another product is returned and goes on your “shelf”, your listing is reopened again, and the process repeats itself. The sales rate generated is zero and is what Amazon's algorithm will remember when you restock.

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If you left the listing in the “not closed” status, you would cause double damage: wasting on PPC and difficulty in returning to the sales rate you were at before you went out of stock.

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Beautiful, the stock arrived and checked in, now what?

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1. Check that Amazon shows that you have enough inventory available for sale, otherwise Amazon will show in the listing that the product's delivery time is longer than usual, which will damage the sales rate and the possibility of returning to the sales rate you were at before. If you don't see enough units available for sale, leave the listing closed (yes it can take several days I know).

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2. Once your stock is sufficient to hit the road again, go ahead and open the listing, same flow as last time, just now click on “Relist”. In about 15 min (sometimes an hour LOL) you will see your listing is “active” now and your product is available for sale.

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3. Now reactivate all your campaigns. Don’t touch the bids, don't touch the budgets ??

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It is very important that everything will remain exactly as it was before. Yup, the first days will bleed some cash, look at it as an investment in getting back that sales rate you wish.

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But and this is a big but, in 95% of the times I followed this method, the sales returned to what they were before if my out-of-stock period was NOT longer than a week. Remember, the speed of returning to the previous sales rate also depends highly on the length of period you had no stock.

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The last move is conducting a general optimization 7-12 days after you reactivated the PPC and moving forwards as you used to.

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That’s it, sounds simple? It is, and it’s also very helpful. Did you ever try it? If not, good luck! ??