Stocking out can have an adverse impact on your entire Amazon business. Aside from lost sales, it can also lead to degraded Sponsored Products campaign performance and reduced sales rank.
The best case scenario is to prevent a stockout through optimized reordering and forecasting processes. However, running out of inventory is inevitable at times. Here are some things to consider so you don't completely lose momentum in the event of a stock out and are able to hit the ground running when those items are back.
Actions to Take
Some items on Amazon are eligible for "pre-order". If your products qualify, you should leave your listing as-is and remain eligible for pre-orders. If your product is not eligible for pre-order, then you can consider deactivating your listing until the item is back in stock. Regardless of listing status, running out inventory can impact your sales rank.
You should pause your ads until that SKU is back in stock. Pausing your ads prevents the bidding algorithm from bidding too low (look below for more details). Amazon will automatically stop running ads once an item stocks out and resume when an item comes back, but your bidding strategy needs to change when this happens.
Once an Item Comes Back in Stock
You should resume running advertising as soon as your item comes back in stock. Once advertising resumes, evaluate the following:
- Your Ad Group Default Bid. In some ways, a newly restocked product acts much in the same way as a newly launched product, especially if it has stocked out for a significant amount of time. What this means is that you will need to reinvest in advertising to get the product closer to its prior performance. You should consider raising default bids to help improve traction.
- Your MACS: Increase MACS on campaigns where products stocked out to make sure you are bidding as high as possible where needed. Learn more about MACS here.
What to Expect with Flywheel Advertising
- For any keywords or ad groups relevant to multiple SKUs (both paused and not), the algorithm will continue to make changes based on performance and standard bid change criteria.
- For any keywords or ad groups that are relevant only to one SKU that stocked out, you will see most efficient bidder performance where the ad was paused. Based upon how long a product was out of stock (we review 60 days of data to make bid changes), we will use the last available bid or start off at the ad group default bid.
- If the ad was not paused at the time of stock out, then you might encounter some initial bids that are too high or too low. Which is why it's important to reevaluate your ad group default bids when a product comes back in stock or, better yet, paused any ads where the product is unavailable.
Since Amazon stops placing ads for any products that are not in stock, you will not receive any keyword recommendations for that product. Once an item is back in stock, it can take some time to start generating impressions, which then convert into clicks and sales. This means that you might need to wait a couple of weeks to start seeing new keyword recommendations.