Does running low on inventory on FBA affect your Amazon keyword rankings? It’s a common concern for all FBA sellers. Even more feared is the impact of completely running out of stock. Here I will lay out some of the negative impacts on Amazon keyword rankings – both from running low on inventory to being completely out-of-stock. I’ll also look at what you can do if faced with super low stock.
How Low Inventory Problems Occur
There are many reasons why you might run out of inventory. The most common include:
- An unexpected spike in demand
- A delayed shipment of new inventory
- Forgetting to reorder inventory
- Incorrectly calculating future inventory needs
Does low inventory levels affect Amazon keyword ranking?
Low inventory by itself does not appear to have a significant effect on inventory. Anthony Lee, of ZonBlast.com, did one of the most detailed studies comparing stock listing levels and sales trends. Lee used sales levels as a proxy for Amazon keyword ranking. The study found that the impact of lower inventory levels was essentially neutral.
Anyone who has tried to increase inventory levels to positively impact ranking levels will recognize the same lack of correlation. Simply increasing or decreasing inventory levels, by itself, does not impact Amazon keyword ranking. However, running out of inventory all together is a different story.
Avoiding a Bad Scenario
The worst case scenario is completely running out of product. No product, of course, equals no sales. Your listing will also be ghosted by Amazon making your product impossible to find. In turn, this can lead to a drastic drop in rankings when your listing goes live again. In short, avoid completely running out of product!
Should you increase prices?
When you are faced with potentially running out-of-stock, a logical response may be to increase prices. One may think that raising prices will slow sales as buyers shift to less expensive options. By incrementally increasing prices, sales may decrease until your next shipment arrives. Unfortunately, while this approach can work, it does potentially create some problems.
Key metrics including:
- Click-through rates (CTR)
- Conversion rates
- Total sales
These can all decrease as a result of higher prices. This, in turn, can have a negative impact on your product’s ranking. There is also the possibility that you may receive negative reviews. At a higher price point your product may not appear to offer value for money.
Running low on inventory by itself appears to have little impact on rankings. Raising prices in response to short inventory can slow sales but it may also impact Amazon keyword rankings. Completely running out of product can have a significant impact on pricing and should be avoided even if this means raising prices. What this reinforces is the importance of prudent product management. The best case scenario is to not run low on stock in the first place. Of course, the unexpected does occur for any business. Luckily, running low on inventory should not have a significant impact on Amazon keyword rankings by itself. The danger for Amazon keyword ranking comes from the necessity to raise prices, or even worse, running out-of-stock all together.