Restock Your Best Bets, On Time
Restocking is the Achilles Heel of many an ecommerce retailer. Like a leak in a bucket that keeps expanding, it’s the kind of topic that’s easy to overlook because it seems obvious and mundane. However, there’s more than meets the eye here, and the potential gains — both in saving time and increasing profit — will be well worth your time.
Consider this: how much are restocking mistakes really costing you? How much money are you leaving on the table when you’re understocked? How do you know exactly what to restock and how much to order? How do you handle times of increased demand?
In our latest ebook, we dive into an overview of 3 different ways to approach restocking, common reasons why items go out of stock, and also get valuable tips from a professional, multi-million dollar Amazon seller with 6 years of experience on the Amazon platform. We’ll be breaking down these data tips over the next week right here on our blog.
Why Good Sellers Stockout…And What To Do About It
Know what to do in these 4 common scenarios and you’re well on your way to stockout prevention:
1) CUSTOMER DEMAND CHANGES
Sometimes, a celebrity will wear a certain shirt or purse and sales will go through the roof, resulting in stockouts. Other causes can be more predictable – for example, a particularly long and brutal winter (like the kind New Englanders frequently experience) will prompt increased purchases of snow boots.
What to do: This depends on the kind of product you’re selling. Are you selling seasonal clothing? Make sure to track historical sales rank changes and keep abreast of relevant external factors (like the weather) to help predict inventory levels. It’s worth the extra effort to track monthly sales by SKU over the years and keep this data on hand in spreadsheets. (our CEO did exactly this before launching Teikametrics to replace those spreadsheets with something more scalable!) For the celebrity scenario, there’s not much you can do here, except to react as quickly as possible to the change or build a large buffer into your overall strategy, which has its own drawbacks and benefits.
2) NORMAL SEASONAL VARIATIONS
As September begins, sandal sales begin to fade faster than daylight hours and your ballerina-style flats begin to pick up, resulting in stockouts.
What to do: Keep historical sales data on hand to accurately predict changes in seasonal demand.
3) SUPPLIER ISSUES
Other times, suppliers will simply run out of stock on a popular item or discontinue it, resulting in a stockout.
What to do: Make sure to maintain open communications with your suppliers to to discuss any changes in their product line or any updates on a SKU level. This way, you’re not kept in the dark and you can stock up on items that are about to be discontinued. More importantly, you’ll know if any of your best selling items are about to be discontinued, giving you the ability to buy up a bunch of extra inventory so you can continue to enjoy these sales for as long as possible.
4) PRICE VARIATION DUE TO COMPETITION
There are two potential scenarios here:
a) You’ve been struggling to sell 10 units a month of a particular SKU… but then your biggest competitor runs out of the stock, or gets cut off from the supplier altogether for breaking MAP. All of a sudden, you’re the top seller on the listing, and demand goes through the roof, resulting in stockouts.
b) Amazon jumps on the same listing, and now you can’t win the Buy Box, no matter how much you lower your price.
What to do: Keep an eye on sales volume and price changes to see changes in a sales velocity for your SKUs. To handle the common scenario of Amazon taking over a listing, you’ll want to constantly diversify and expand your products so that losing a few skills won’t kill your business.