Regular stockouts negatively affect a seller’s chance of getting the Amazon Buy Box. For Amazon’s algorithm to award a seller with the Box, sellers need a history of consistent sales and stock. For example, an Amazon seller who keeps low stock, such as 15 units, over 6 months may be preferable to another seller who often keeps 70 units but frequently goes out of stock before updating their product counts. The former seller is reliable and consistent---exactly the kind of person who can handle the demands of the Buy Box.
Importance of Stockout Reduction
Brick-and-mortar stores worldwide retain an average stockout rate of 8.3%. With this rate, someone with a 10 item shopping list has a 67% chance of encountering an empty shelf where their desired product was once placed. Up to 90% of stockouts are the result of inadequate stocking; the retail store has the product in a backroom, but hasn’t yet placed it on a shelf, or perhaps they don’t know the shelf is empty. Ecommerce shops have the potential to fair much better, because there’s no backroom-to-shelf shuffle.
The shopper response to stockouts has been heavily researched. Out of stock products frustrate shoppers and lead to sales loss, diminished store loyalty, and corrective measures to find an alternative product that ultimately skew the appearance of product demand. In addition, companies like Amazon can help make or break a business based on whether their algorithms categorize a seller dependable. Therefore, keeping stockouts to an absolute minimum is imperative.
Methods of Reducing Stockout and Getting the Amazon Buy Box
To reduce out of stocks, it helps to have an inventory management system. SkuVault enables purchasers to make better decisions by reporting on what SKUs sell best. It can zero in on the attributes of specific products, letting the user know that white Beats headphones sell far quicker than black ones, or that a certain product flies off the figurative shelves in April, but becomes hopeless in July. SkuVault helps businesses plan better, and its reports are customizable to suit the unique needs of your business.
Keep in mind that being stocked at all times won’t guarantee the Amazon Buy Box. Fulfillment method, landed price, and seller rating, among other variables, are calculated with more importance than frequency of stockouts. It’s rumored but not proven that stockouts in the past 30 and 60 days are a determining factor when competing against sellers who have similar performance ratings.
Lastly, even if the Amazon algorithm considers you a perfect match for the Buy Box, it will still be awarded to another seller if you’re currently out of stock.
