Membrane

Why stockouts are hard to prevent on Amazon

A pack often runs out at Amazon because it was reordered on numbers that changed after the order left. This page shows why, how we prevent it, and the job that does the work.

  1. 1 · Why it happens

    Many sellers reorder on two numbers: sales per day and lead time. Both often change after the order leaves.

    Stock at Amazon on the reorder date=sales per day×lead time

    Here’s one reorder under the rule many sellers use, shown twice with example numbers, not any brand’s records. Red marks sales above the plan, lead-time days over the plan and the days nothing could be bought, and the dashed part is the sales missed.

    As plannedIt sells 10 a day and the order takes 24 days, so it lands as the last unit sells.
    Stock at AmazonunitsSold per dayunitsLead time24 daysOrder processing: 1 dayManufacturing: 8 days8Shipment out: 1 dayTransfer: 4 days4Receiving at your warehouse: 2 daysOrder processing: 1 dayTransfer to Amazon: 3 daysReceiving at Amazon: 4 days4Supplier → your warehouse, 16 dWarehouse → Amazon, 8 dREORDER DATEORDER LANDSREORDER DATEORDER LANDSStock at AmazonunitsSold per dayunitsLead time24 daysOrder processing: 1 dayManufacturing: 8 days8Shipment out: 1 dayTransfer: 4 days4Receiving at your warehouse: 2 daysOrder processing: 1 dayTransfer to Amazon: 3 daysReceiving at Amazon: 4 days4Supplier → your warehouse, 16 dWarehouse → Amazon, 8 d
    As it happenedIt sells 12 a day, a promotion runs five days, and the order takes 38 days, so there are 20 days with nothing to sell.
    Stock at Amazonunits20 days emptySold per dayunitsLead time38 daysOrder processing: 1 dayManufacturing: 14 days14Shipment out: 1 dayTransfer: 6 days6Receiving at your warehouse: 2 daysOrder processing: 1 dayTransfer to Amazon: 5 days5Receiving at Amazon: 8 days8Supplier → your warehouse, 24 dWarehouse → Amazon, 14 dREORDER DATEORDER LANDSREORDER DATEORDER LANDSStock at Amazonunits20 daysemptySold per dayunitsLead time38 daysOrder processing: 1 dayManufacturing: 14 days14Shipment out: 1 dayTransfer: 6 days6Receiving at your warehouse: 2 daysOrder processing: 1 dayTransfer to Amazon: 5 days5Receiving at Amazon: 8 days8Supplier → your warehouse, 24 dWarehouse → Amazon, 14 d

    Amazon adds its own days to the lead time

    2–5 daysto check in a shipment after it is delivered to Amazon.1
    Up to +1 daymore, usually, before Amazon finishes receiving it.1
    +5–10 daysof processing may be added after peaks such as Black Friday and Prime Day.1

    Stock costs money at both ends

    Under 28 daysof supply, going by past sales, gets you Amazon’s low-inventory-level fee.2
    181+ daysin Amazon’s warehouses gets you Amazon’s aged-inventory surcharge.3

    Amazon’s own Restock guide tells sellers to “balance the cost of running out of stock” against the cost of carrying too much.4

  2. 2 · How we prevent them

    Every Monday we project each pack’s stock at Amazon day by day, and set what to send and by when.

    Reorder point=expected sales over the lead time+safety stock

    That’s the reorder point, as supply-chain courses teach it.5 The usual rule leaves out the safety stock.

    Longer, less steady lead times need more safety stock.6 We keep it as safety days, set for each place the stock sits.

    Usual rule and ours, side by side

    The usual ruleWhat we do
    Sales per dayLast month’s averageThe last 8 weeks, with the out-of-stock days left out once Amazon’s records cover 30 days
    Lead timeThe supplier’s quoteSet for each route, from your door until Amazon can sell it, check-in included
    Safety stockLeft outSafety days, set for each place the stock sits
    Stock countedWhat’s at AmazonAmazon, on the way, your warehouse and open supplier orders
    When it is checkedWhen stock looks lowEvery Monday, for every pack

    What we do every Monday

    1. Map the stockWe note what’s at Amazon, on the way, in your warehouse and on order, and each route’s shipping time.
    2. Forecast sales per dayWe forecast each pack from the last 8 weeks, and leave out the days it was out of stock.
    3. Work out Amazon’s stock for each day aheadThe first day it reaches zero is the stockout date.
    4. The Monday listIt says what to send to Amazon, and by when. The send-by date is the stockout date minus the shipping time.

    Why not Amazon’s Restock tool

    Restock recommends a ship date “based on your estimated days of supply and lead time.”4 Amazon can’t see your own warehouse or your open supplier orders.

    We count both, so the list also says whether your warehouse can cover a shipment, and when to order more.

    Read the playbook →

  3. 3 · Who runs it

    We run this for you as Stockout Prevention, part of the Inventory Management job.

    Inventory Management · deliverableStockout PreventionCover breaks caught before they cost sales — every at-risk SKU flagged with the action that prevents it, and a running receipt of the revenue protected.

Sources

Amazon’s rules

References

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