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What Happens When an Online FBA Seller Is Running Out of Stock?

Posted by Richard Whitson in Resources

You should have some tips and tricks in your back pocket for Amazon FBA seller success if you are concerned about potentially running out of stock. Having an inventory management tool in place can help you identify red flag issues earlier than later and take actions before running out of stock. However, there are still options available to you to successfully handle a situation if you are already out of stock of certain items. You’ll want to make sure that your company continues to run successfully especially if you have it on your plan that you will be selling the company soon in the future. Being able to show consistent ability to keep revenue coming in can be very powerful for convincing a strategic buyer that now is the right time to purchase your company.

Get the Necessary Support with Inventory Management

Sometimes it is practically unavoidable to run out of stock, especially if you are managing the inventory on your own. An inventory management tool can help you know when to replenish the inventory number in FBA, how much should be ordered and where shipments are at all times. If you notice that you are currently about to run out of stock in Amazon FBA, there are a couple of tips you can take immediately to slow the potential impacts.

One of these is lowering your PPC spend gradually. This would give you a couple of days’ worth of time because it might slow down sales especially if PPC spend is a major source of your current sales. Another thing you can do if you feel that you are running out of inventory very quickly is to close your listing. When you run out of stock, this can lead to a negative mark from Amazon. By closing your listing a few units before you actually go out of stock, you tell Amazon that you are voluntarily pausing the selling process because something might have happened in the supply chain. This means that it will be easier to climb back up the rankings when you do replenish your stock because Amazon didn’t originally penalize you for going down to zero.

Look at daily sales as an indicator to decide whether or not you should close your listing or lower your PPC spend. You should aim for 1-2 days’ worth of typical stock before you fully close out your listing. This gives you the necessary buffer so that you are not out of stock entirely and so that you have time to order additional inventory and replenishment orders to customers in case there was an instance in which they receive damaged goods and required an immediate replacement.

If you have already run out of stock in your Amazon FBA store, you can take some of your incoming inventory and send it by air freight or boost up your PPC spend. This will increase sales velocity when you do it for the first one or two weeks. But you should only do this after your product is back in stock. For more tips on keeping your Amazon FBA business as effective and fine-tuned as possible, stay tuned to this blog.