Do Inventory Levels Affect Ranking?

inventory

As we dig deeper into everything that may affect keyword ranking, be it positively or negatively, we continuously run into the question; “Do inventory levels, specifically running low on inventory, negatively impact rankings?”

This is a really hard thing to determine. Without polling people individually on their subjective experience, and having them monitor keyword ranking during low stock, it proved difficult to gather any meaningful data. So that meant digging into as many listings as possible and ferreting out the information we needed.

Nonetheless, I came up with some data that we may find useful.

The Experimental Methodology

The only way I could think to compare low stock listings was to manually search and find listings that explicitly stated there were less than 20 units left (this is an indicator FBA listings automatically publish). I figured during December, low stock listings would be rampant, so it may prove to be possible to collect them.

I stuck to listings only on the first two pages of search because I figured anything with terrible rankings likely has always had terrible rank and wouldn’t have a rich enough sales history to provide good data. After finding the listings, the next step was to find a way to determine whether or not they saw a rank decrease.

Without monitoring the listing for a period of time, this would be very hard. So I went to camelcamelcamel.com to view BSR history. The logic being, BSR fluxuations would show whether rank changes negatively affected sales during a period when they SHOULD have been increasing.

That task was long and arduous. It was also not as fruitful as I would have hoped, but after countless search terms and categories, I gathered as much data as I could possibly attend to.

The Results

After an abysmally low 38 keywords (I searched many more, but that was how many I could find low stock listings for) I was able to identify 87 listings that published less than 20 units in inventory (there were more, but camelcamelcamel couldn’t pull data for quite a few).

First, out of the 87 listings, 31 of them were on page one for the given search term and the remaining 56 were on page two. That is 64%. This alone could be an indicator that the low stock could have caused page one listings to drop to page two, but there is more information to examine.

The next thing I noticed was that out of the 87 listings 36 had seen a decrease in BSR (meaning sales velocity had increased) and 48 saw an increase, while 4 remained within a stable range. So only 55% saw a downward trend in sales. That is practically an even split. While conventional wisdom would say most items on Amazon see an uptick in sales during Q4, it would be silly to assume they all do. Furthermore, page two listings for a search term are likely to see less of the volume increase than page one. With that logic we could easily determine that the page two results that were low in stock had already been on page two to begin with.

And finally, the last bit of data to put under the microscope is that 35 of the 87 listings had started with or ended up with a BSR under 10k. For all intents and purposes we could logically conclude that sub 10k BSR is (or can be) “page one material.” And of the mere 40% that dealt with 10k and under BSRs, 14 saw a downward trend in sales and 9 saw an upward trend. Yes, that is a 50% difference, but with such a small sample size this isn’t a statistically significant amount.

The Conclusion

The overall data points to a slightly downward trend in sales, and potentially ranking, for low stock items, but for the most part everything seems pretty evenly split. This would lead us to believe that, based on the small sample here, there is no significant indication that stock levels have a direct impact on keyword ranking.

Now, the impact that being out of stock for a given time period has is a completely different story. All too often people are simply searching for something that makes their low stock decisions easier. Deciding whether to increase price to slow sales or to just run out is a common conundrum. Having a clear answer to whether low stock has an effect on ranking might help that, but I’m afraid the answers aren’t so easy.

In the end, you have to make the decisions that are right for your business specifically. That said, I think some general rules apply here:

Increase margins where you can (meaning, you may raise price close to stock out, but not too much…this is a good time to test price bands).

Keep as positive a sales history as possible (meaning, you want to keep your conversion metrics as good as you can. Likely low conversions look far worse than no sales due to no stock).

And remember, when inventory challenges cause you to lose rankings, you can always count on ZonBlast promotions to boost rankings back to normal (or even better).