Listen closely.
If you’re diving into the colossal jungle that is Amazon, you need to be aware of these dangerous pitfalls that could spell disaster for your brand.
Amazon: A Goldmine… If You Know How to Mine It
Amazon, with its vast ocean of customers and unmatched shipping infrastructure, offers e-commerce brands unparalleled opportunities.
Their consumer trust is off the charts.
But don’t be fooled—getting your products listed is just the beginning.
There are treacherous waters ahead, and many brands flounder due to one critical mistake: poor inventory management.
Inventory is the beating heart of your e-commerce venture.
Mastering inventory management is essential to scale any e-commerce brand. But on Amazon, the stakes are even higher.
Missteps can lead to catastrophic consequences.
In this revealing video, I’ll expose the five major problems that can cripple your brand on Amazon if you neglect your inventory management. Buckle up—this is vital for anyone serious about conquering Amazon.
Watch the video. Learn. Adapt. And turn these potential pitfalls into stepping stones for your brand’s unstoppable growth on Amazon.
If you prefer reading let’s start with the first major problem stemming from bad inventory management.
1. Loss of organic keyword rankings
Ah, the elusive top spot in Amazon’s organic search results.
It’s not as golden as it once was with 43 ad placements muscling in ahead of organic listings, but make no mistake—it’s still immensely valuable.
Here’s the brutal truth: Climbing those organic rankings is an arduous journey.
It demands years of high sales, stellar reviews, and a significant investment in advertising.
One of the key drivers of this hard-earned rank? Your product’s sales velocity.
Now, imagine this: You start having stock issues.
Suddenly, fewer variants of your product are available.
Your once lightning-fast next-day delivery stretches to a sluggish 7-day wait. This isn’t just a minor inconvenience—it’s a conversion rate killer.
But wait, it gets worse.
If you go out of stock completely, it’s like slamming the brakes on a speeding car. Your momentum grinds to a halt.
Here’s why this is a monumental problem: Any disruption in availability can cause your organic ranking to nosedive.
And once you start slipping, your competitors won’t wait for you to recover—they’ll surge ahead, making it an uphill battle to reclaim your position.
Every slip, every delay, and every out-of-stock notice is a crack in the foundation of your ranking.
Ignore this, and you’ll find your brand buried under a mountain of competitors, struggling to claw your way back to the top.
2. Canceled subscriptions
Subscriptions—it’s the Holy Grail of e-commerce.
Imagine having customers who, with zero effort on your part, keep buying from you month after month, blissfully unaware of your competitors.
It’s like striking gold every time.
But here’s the nightmare scenario: you go out of stock.
Those prized subscription orders? They don’t just pause with a polite, “We’ll wait for you.”
No, they lapse.
Your golden geese wander off to greener pastures, seeking out similar products from your competitors.
Here’s the harsh reality: once those loyal subscribers switch to a competitor, luring them back is akin to climbing Mount Everest in flip-flops.
They’ve found a new home, a new brand to trust, and you’re left standing in the cold.
What you’ve lost isn’t just a one-time sale; it’s stable, recurring revenue—a stream of income that could have fueled your growth indefinitely.
All because of a hiccup in your inventory management.
And unlike a one-time customer, a lost subscriber is often gone for good, a casualty of poor planning and oversight.
Don’t let bad inventory management rob you of your most valuable customers.
Get it right, and you’ll keep that golden goose laying eggs. Get it wrong, and you’ve just handed your competitors a golden opportunity.
3. The Dreaded Low Stock Fees
Brace yourself for another curveball from Amazon—low stock fees.
Yes, you heard it right.
If there are two things Amazon excels at, it’s getting products to customers at lightning speed and finding every possible way to charge sellers fees.
One of the more infuriating fees? Low stock fees.
It may sound counterintuitive, but when you don’t have enough inventory in their warehouses, Amazon penalizes you.
It’s their way of ensuring their logistics machine runs smoothly, but it could be a financial thorn in your side.
Here’s what happens: when your stock levels dip, not only do you risk lower revenue from fewer sales, but you also get slapped with these punitive fees.
It’s a double whammy—less inventory means less potential income, but the cost of doing business just went up.
It’s like being kicked when you’re already down!
Amazon’s low stock fees turn a bad situation worse, eating into your profit margins precisely when you need every dollar to navigate through the inventory hiccup.
Don’t let this happen to you.
Maintain optimal stock levels not just to keep sales flowing, but to avoid those insidious fees that Amazon seems all too eager to levy.
Your bottom line will thank you.
4. Decreased inventory storage allocation
Amazon’s warehouses might seem endlessly vast, but space is limited and highly coveted.
Here’s how it works: Amazon allocates storage space based on your sales velocity. The more you sell, the more space you get.
Simple, right?
But this creates a precarious balancing act, especially for growing brands.
When you’re starting out, your storage allocation is minuscule.
You can’t keep much in stock, which means you can’t sell much, which means you have to constantly replenish that tiny allocation to prove your sales velocity is worth more space.
It’s a relentless cycle.
Now, consider this: you’ve managed to secure a decent allocation. Sales are humming along nicely.
Then, disaster strikes—you go out of stock. Sales plummet.
What does Amazon do?
They tighten the noose and reduce your storage allocation.
Here’s the kicker: once you’re back in stock, you’re not just fighting to reclaim your sales numbers—you’re battling with a reduced inventory allocation.
You’re back to juggling constant replenishments for a meager allocation, making it incredibly difficult to regain your previous sales momentum.
It’s a vicious circle where decreased allocation begets lower sales, which in turn begets even less allocation. A downward spiral that’s tough to escape.
Avoiding this pitfall requires vigilant inventory management.
Keep your sales velocity high, maintain your storage allocation, and safeguard against the devastating effects of stockouts. Your growth on Amazon depends on it.
5. Your competitors capture customers
If you’re out of stock, your competitors are ready and waiting to swoop in and claim your customers.
And let’s be clear, this problem extends beyond Amazon.
On Shopify, running out of stock means turning off your Facebook ads, which reduces exposure.
But on Amazon, the stakes are much higher.
Amazon shoppers are determined buyers.
They come to the platform with the intent to purchase.
If they search for “whey protein” and you’re out of stock, they won’t just leave empty-handed—they’ll buy from your competitor.
It gets worse.
Even loyal customers searching for your brand by name might end up buying from your competitors if you’re out of stock.
They type in your brand, you don’t show up, and there your competitors are, ready to pounce.
Effective inventory management isn’t just a best practice—it’s your lifeline in this cutthroat environment.
Here’s what you need:
- Visibility: You must have a crystal-clear view of your current inventory levels at all times.
- Sales Rate Tracking: Keep a vigilant eye on your rate of sales to anticipate demand.
- Lead Time Awareness: Understand how quickly you can restock to avoid prolonged out-of-stock periods.
But there’s a delicate balance to strike.
Overstock, and you’ll be paying unnecessary storage fees, with your cash tied up in unsold inventory.
Understock, and you’ll lose customers to competitors who are more prepared.
Mastering this balance is crucial for success on Amazon.
Get it right, and you’ll fend off competitors and keep your customers loyal.
Get it wrong, and your competitors will thank you for the gift of your hard-earned customer base.