Running low on stock?
Here are some of our best tips on what you need to consider if your stock is getting low.
Tip 1 BSR
If you run out of stock, you will start to lose your ranking in the search results.
It’s a bit like sinking sand. The longer your products are out of stock the deeper you fall and the harder you have to pull yourself to try to get back out.
If it’s only a few days it’s not such a big deal, but if you are out of stock for a couple of weeks or more you could lose all your keyword rankings as well as BSR.
Tip 2 Raise Price
By increasing your price, you may sell less products and lose some of your rankings, but it buys you more time to get more products into Amazon’s warehouse.
If your product was originally $10 you could try selling at $15 to see how this affects your sales velocity. The key is monitoring your inventory at least weekly so you know when you’re approaching a low stock level.
You may find that when you increase the price it sells more. You won’t know until you try, so monitor low stock items closely.
It’s easier to do this with tools like CashCowPro which lets you check sales by SKU on a daily basis.
Tip 3 Air Freight
If you’re getting low on stock, you could ask your factory to finish the first 10% of the products as quickly as possible and ship them out via air freight.
That way you get some stock in quickly while the rest of your order is made and shipped. The 10% might cost you more since air freight can be expensive, but it’s better than losing all your rankings.
Tip 4 Keep Some Buffer
It’s best to hold 10 to 14 days of stock in Amazon at all times.
So when you’re planning your reorders you should leave out this buffer from your calculations. Sometimes freight can be delayed a few days, get stuck in customs, or your factory can be late.
By having this buffer you will be able to handle any unexpected delays or even severe sales spikes.
Tip 5 Plan Re-orders
Most people believe you should reorder when your stock is getting low, but the reality is with the long lead times from China you need to reorder even when you have a lot of stock left in Amazon.
If it takes 60 days to make your product and ship it into Amazon, you need to place your reorder when you have 60 days of product left already in Amazon. If you’re selling 20 units a day that means you need to reorder when you have 1200 units left in stock. 60 days times 20 a day gives you 1200.
Most people would not say that 1200 units is low in stock, but the reality is if you don’t order at that time you will run out before your factory can ship the next lot in.
Tip 6 Tools for Managing Stock
Cash cow pro lets you see your current stock level, the date you will run out of products, your sales velocity and even how much you should order and when based on your current sales.
It’s an estimate but it saves you calculating these numbers each week, because when you login to check your profits you can also see all of these additional details.
Tip 7 Keep Raising Price
As your stock dips lower and lower, 50 units, then 20 units, then 10 units left, keep increasing the price to slow down sales velocity.
I’ve seen some items which were originally selling for $20 sell at $45 or more when the stock was low. I doubled the price of some items to slow down sales and the product still sold quickly. I had to add more than 200% to the original price to slow sales down.
Even then it was still selling multiple units a day.