Do not… under any circumstances … go out of stock on Amazon!
In a recent ProPublica article by Renee Dudley that I was privileged to contribute to, the author referenced multiple companies and consultants who were insistent and repeated over and over that you can’t go OOS on Amazon.
But why is this the case? What makes Amazon so different from traditional retail?
A real-world example of the consequences of a soulless algorithm
Let’s use Rise Bar as an example – in November, Amazon was delayed with receiving, which is very typical at that time of year, although 2019 was worse than recent years, and caused an out-of-stock event for Rise Bar.
However, it was only out for a couple of days and immediately bounced back to where it was before.
At the end of March 2020, the product was selling out daily for close to two weeks. This sustained loss of consistent sales caused the ranking to drop by about a thousand for a couple of days, then even further, down to 8000 from a high of 2000.
What could we have done differently to prevent this?
Not really anything in this situation. Normally Prime Day or Black Friday/Cyber Monday are significant demand events, but they generally happen around the same time each year and can be planned for. By shipping in the extra products, you can ensure your demand doubling or tripling or quadrupling can be supported by sending in new shipments.
There were only a few days in between when the first spike started to happen and California closed, where Rise Bar is produced. Based on our experience with other clients in the Midwest and South, they were able to respond quickly enough to what was happening on the West Coast to get new items into Amazon before Amazon closed their FCs to non-essential items, and get additional essential items in, and shipping plans created.
How do you recover from a loss in sales like this?
Sustained and aggressive advertising is one approach if you’re not into cheating. Normally, you’d accompany that with sales and coupons… but these were also turned off during the COVID-19-related delays and problems Amazon was experiencing.
So, it was just advertising. To push advertising, we ran a combination of ROI-focused campaigns with specific ACoS and conversion targets, with a whole different set of ads focused on impressions and click grabs. In our case, we were also able to add posts into the mix, Amazon’s new Instagram knockoff.
Going OOS on Amazon can be very expensive
As of today – 6/14/20 – the rank on the product is back under 500 and sales are back where they were in February and headed upwards.
But it took a solid two months of consistent effort to regain the rank lost in only 3 days of being OOS, exacerbated by the lack of tools to fix it quickly, as we did after Black Friday last year. No coupons, Amazon artificially inflating ship dates, and continued receive delays at the fulfillment centers conspired to make this much more difficult than it otherwise would be at a more normal time.