It can happen to any seller on Amazon: A product is almost sold out and the next shipment won’t arrive in time. There could be a number of reasons for going out of stock: The shipment was delayed, you’ve sold more than expected, or you forgot to place a new order in time.
If you’re low on inventory and it looks like stock levels won’t hold out until the next shipment arrives, then as a seller on Amazon you have the following two inventory management options:
Raise the price of your remaining products: The idea here is that you sell less, and don’t go out of stock until new inventory arrives.
Pros: Your product doesn’t go completely offline and can still make a few sales.
Cons: Your product’s performance drops significantly (click rate, conversion rate, sales) and could possibly receive negative product reviews due to its value for money.
Don’t raise the price: Let your inventory run out until you can replenish.
Pros: Your product’s performance (click rate, conversion, sales) isn’t affected, since your product is completely offline when it’s out of stock.
Cons: You won’t have any more sales at all, and competitors’ products could take your place in Amazon’s search results.
When you’re low on inventory, the better option seems to be not to raise the prices (or at least just slightly raising them would be okay), but to keep the price stable and let the product go out of stock.
The reason is that the product will quickly regain its previous rankings after re-stocking, as long as sales can be boosted relatively quickly. A significant price increase, however, leads to worsened performance and ensuingly worsened rankings. A slight increase in price could be legitimate as long as the performance of the product doesn’t suffer greatly. This will only prolong going out of stock for a little longer, however, because the product will still continue to be sold.
Running Amazon PPC campaigns for a product that has just been re-stocked is also a must.
Make sure to check out our case study on Amazon Inventory Management!