On November 30th 2015, the US set a record for the busiest online shopping day ever recorded

and marked the first time online sales in the US topped $3 billion in a single day. On November

28th 2016, Cyber Monday is forecasted to break that record again, all-but guaranteeing that it

will be the busiest sales day of the year for Amazon and for e-commerce as a whole. This can

pose a challenge for suppliers, since on all Deal Days like these, Amazon’s total number of out-

of-stock items skyrockets. In order to take full advantage of one of the biggest sales days of the

year, you need to make some preparations to ensure that you will not sell out.

Don’t Be a Sell-Out: How to Stay In-Stock for Cyber MondayBy JT Meng, Account Manager at One Click Retail

This is easier said than done. Understanding the

complexities of how Amazon manages inventory and

how you can work both with and against Amazon’s

expectations will help you get the most out of Cyber

Monday.

OOS – Out-Of-Stock items

FC – Amazon’s Fulfillment Warehouse

Vendor Buy Box Fast Track % –Percent of time a given product’s detail page has an “In

Stock, Prime, two-day shipping” message

Vendor Lead Time (VLT) – Time (in days) from when Amazon sends a purchase order to

when the item is received at the FC

Prime Pickable Location – A shelf location in the FC that allows Amazon associates to fill

customer orders quickly enough to guarantee two-day delivery

Terms

Looking at past Deal Day figures and future projections can really illustrate how

being fully prepared for Cyber Monday can benefit your brand and generate a long-

term lift in sales well into the holiday season and beyond. For example, on Prime

Day (July 12th), Amazon’s biggest sales day so far, the total number of out-of-stock

items (OOS) nearly doubled, rising from a total of 6.3% to 12.2%, resulting in

thousands of dollars in lost sales for some of Amazon’s top brands. Each sale lost

due to OOS is one less potential loyal customer and one more hit to your level of

consumer confidence.

The first step to navigating your OOS rate and your Fast Track % is to understand that

Amazon’s goals and expectations don’t necessarily align with yours. It varies slightly by

category, but for the most part Amazon maintains an out-of-stock goal of +5%: it is actually

cheaper for Amazon to understock items than it is be overstocked. Understocking saves

Amazon money on warehousing and leaves room to keep more items in a prime pickable

location, which is especially important during the holiday rush. Most importantly, Amazon

will always make money regardless of how the product is being sold – by a 1st party or a

3rd party seller. So if you, as a manufacturer and a 1st party seller on Amazon, are

understocked, you will be the only one potential losing out on the sale, not Amazon as

there are always 3rd party sellers at the ready to sell your product.

Identify the Right Amazonian to Work With

There are three main supplier-facing positions at Amazon:

1. Vendor Manager (VM): Although this is the most contacted person by suppliers, your VM is

concerned with increasing selection and decreasing product costs, not with your OOS %.

2. Marketing Manager: The least contacted person by suppliers, their job is to manage Amazon’s

events and marketing, including increasing customer traffic and encouraging you to spend more on

deals and marketing.

3. In-Stock Manager (ISM): This person manages the fulfillment center (FC) operations for Amazon.

Their goals line up with yours: decreasing OOS % and increasing Vendor Buy Box Fast Track %.

Keeping this in mind, here are our 3 suggestions for preparing to remain in-stock for Cyber Monday:

Make friends with the ISM of your category; they win

when suppliers win, while VM’s win when suppliers

lose.

During the holiday season Amazon’s fulfillment center (FC) deprioritizes the prep of

items (bubble-wrapping, boxing, etc.). This is a major cause of inventory loss at the

FC, so prep and pack products before you ship them to Amazon in order to

streamline their way out the door.

Make Life Easy for the FC

More importantly, keep your vendor lead time (VLT) as low and consistent as

possible—late receipt of products could cause Amazon to drop your Fast Track %

and declare your product out-of-stock even if you’ve already shipped it. One of the

reasons Amazon is okay with some OOS is because they often have 3rd party sellers

to backup your products, but that still means lost sales for you. Another way

around this is to convince your ISM to purchase extra inventory in exchange for

you agreeing to run additional promotions to clear any surplus stock.

Make Life Easy for the FC

Amazon calculates your demand forecast for you (this can be found in the Vendor

Central portal) but only targets a 50-80% confidence in always being in-stock. This

number will be higher if you are offering deals on Cyber Monday, but you should

still confirm that your demand forecast is accurate and contact the ISM if it is not.

And on your end, you should always be 100% confident in remaining in-stock both

during and in the weeks following your deals. Expedite purchase orders leading up

to Cyber Monday to ensure you remain in-stock in the case of a significant lift in

sales after your promotions.

Optimize Amazon’s Operations

You can also work with the ISM to keep your Fast Track % up. A fall in your Fast

Track can often be caused by your inventory being stored in the wrong location at

the FC, or in fact still on the pallet it was shipped on, so work with your ISM to

ensure that your inventory is properly unpacked and stored in a prime pickable

location.

Optimize Amazon’s Operations

Beyond being the day with the biggest sales potential all year, Cyber Monday is an

opportunity to capture the attention of consumers who will be coming back to

Amazon throughout the holiday shopping season and well into 2017. As we have

seen from the sustained lift in sales for successful brands during the weeks

following Prime Day, remaining in-stock not only for Cyber Monday but for the rest

of the year should be part of your plan for a successful season.

One Click Retail (OCR) is a market leader in eCommerce data measurement, sales analytics and search optimization for brand manufacturers in North America, Europe and Asia. Thanks to our proprietary sales calculations that are 98.5% accurate down to the SKU level, OCR’s accuracy is unrivaled in the marketplace. The OCR Product Suite provides 1st and 3rd party business intelligence across the 30 largest retailers such as Amazon, Walmart, Target, Staples and Home Depot. The world’s top brands, such as Procter & Gamble, Panasonic, Nestle, Hamilton Beach and HP, rely on OCR insights to drive sales and profitability across eCommerce.

Founded in 2013 by eCommerce experts from Amazon, Walmart, Target, Overstock and other leading retailers, OCR was acquired in 2016 by Ascential plc (LSE: ASCL.L), a UK-based international B2B media company with a focused portfolio of market-leading events and information services products.

To learn more about how OCR can provide your brand with the competitive edge in today’s ecommerce marketplace, visit www.oneclickretail.com.

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