What to Do When You’re About to Stockout

As an Amazon seller, one of the last things you want to experience is a stockout. After all, the consequences are dire. You risk losing sales, the Buy Box, and SEO rank and your account could be put on hold, or worse, suspended altogether. The result of all of this is lost revenue and slow to no growth while your competitors win all of your business.

Coming back from a stockout takes a lot of time and effort, but thankfully there are ways to prevent one. And even if your inventory levels are nearing zero, you can fulfill every last order so long as you’re prepared. With that, here are 5 things to do when you’re about to stockout:

Order More Inventory

Before you do anything, you need to order more inventory, keeping two important factors in mind: how much to order and when you’ll need it. If an order is already in the works, check the status of it so you know when you’ll actually have the product in-hand. Either way, don’t be surprised if you have to rush the order and, as a result, pay a rush fee.

Slow Your Own Sales

One way to prevent an Amazon stockout is to slow your own sales. While it may seem counterintuitive to inhibit the growth of your business, doing so is only temporary and will decrease your chances of experiencing a stockout (which is arguably more detrimental to your growth than a brief lull in sales).

The two most common ways to slow down sales are pausing promotions and changing the price.

• Pausing promotions: Do you have an advertising or online marketing, either on Amazon, through your social media accounts, etc.? If so, stop running them until you’re back in stock.
• Changing price: You may be flying through inventory because you offer the best price. Increasing it should help slow sales. Just don’t forget to readjust once you’ve replenished your stock.

Re-evaluate Your Inventory Management Strategy

Do you have an inventory management strategy? If so, you may need to re-evaluate it. If not, now is the time to put one together.

Your inventory management strategy factors in a variety of data points — such as your sales history and sales velocity — to determine how much inventory you should have on hand at a given time plus when and how much to re-order. You’ll also be able to set alerts so when you hit a certain point, you’ll be reminded to place a new order.

For help figuring out this information, check your inventory reports in Seller Central or consider using a third-party inventory management tool.

Invest in Buffer Stock

Buffer stock is an extra supply of inventory to use in case of emergencies — i.e. if an unexpected surge in sales is emptying your shelves, you’ll have enough “buffer” product to fulfill orders until you’re able to replenish your everyday supply.

So how big should your buffer stock order be? While some sellers opt for 10% of their typical order, some keep a stash of about ~500-1,000 units. Or, you can calculate how many units you sell in the time it takes your supplier to get you a new order. At the end of the day, it really depends on your budget and sales volume.

Increase Cash Flow

Thanks to Amazon’s two-week payment delay, it’s difficult to maintain a steady source of cash. But cash is vital in business, especially when you need to order inventory. To help you achieve reliable and daily access to cash, check out Payability, a financing company for marketplace sellers.

Payability offers two cash flow solutions depending on your needs. With their Instant Advance option, Payability buys a certain amount of your future receivables at a discount, giving you a large lump sum of cash. With Instant Access, they pay you your Amazon income one business day after making a sale; not only that, you could use their new Seller Card to access your funds even sooner.

Payability has helped thousands of marketplace sellers maximize cash flow, stay in stock, and grow their businesses. In fact, this Amazon seller uses Payability to buy more inventory and sell it faster. To see how you can use daily cash access to avoid a stockout, turn inventory more quickly, and grow your business, visit go.payability.com/Urtasker to learn more.

New Payability customers referred by Urtasker will receive a $250 sign-on bonus. Follow the Payability Facebook and Payability Twitter for the latest e-commerce updates. Let them help you during your business stockout.