Does Your Advertising Account For Inventory Levels?

Tana Cofer

June 7, 2021

Advertising and inventory are the yin and yang of an ecommerce business: you need inventory in order to advertise, and you need advertising in order to sell your inventory. Both are necessary for the success of your business, and both work together to help you kill it on the sales front.

While advertising can be extremely good for business, there is an unpleasant side effect that increased advertising can cause which isn’t so good for business, especially not on Amazon: inventory stockouts.

How stockouts harm your business on Amazon

Stockouts can generally lead to disappointed loyal customers and the loss of potential customers across your sales channels. On Amazon, however, stockouts don’t just disappoint customers: they make your listings practically disappear.

Here’s how it happens. When your brand starts pouring more money into advertising a product on Amazon, you generate more traffic on that product’s listing. If you’ve got good conversion rates, increased traffic through advertising means you’re going to sell out faster.

Without a safety net or proper planning, that stockout will create two major problems for your business:

**1. Wasted ad dollars: **your product could go out of stock at any time, and every minute advertising is not paused on that product could be a minute of ad dollars wasted, which adds up quickly. Advertising inventory that is low in stock can be problematic as your advertising might be what drives the sales to push the product out of stock, wasting ad spend that could have been used elsewhere and causing an item to go out of stock, lose it’s rank, and force customers to buy other brands.

**2. Lowered rankings in organic search results: **Amazon has no awareness of when or if a product will be restocked, so once an item sells out and traffic and sales drop off of the listing, marketplace algorithms will push that product listing lower in the search results, making your product all but invisible to customers, even when it comes back into stock.

“The ramifications of running out of stock are pretty heavy,” said Mitch Park, Director of Product Management at Pattern. “Customers can’t find you, and so you don’t sell anything, but the trickle down effect is you start losing out on your organic rank. Your best seller ranking goes down because your sales drop because customers can’t find you.”

Lost sales are twofold, added Tony Morales, Director of Advertising at Pattern. Not only do you lose sales for every day your item is not available to be purchased, “but also when it comes back online, it may have been selling, say, 100 units a day, but because its ranking is lower and it’s on a different part of the page, maybe now it’s only selling 20 units a day when it comes back in stock. Even though you’re back in stock, you’re essentially still losing out on 80 units a day.”

“The best thing we can do,” Morales said, “is just make sure we never go out of stock to begin with.”

Pattern’s solution: Predict

Manually tracking your inventory shortages and pausing your ad spend so you don’t waste money is both inefficient and exhausting, especially when you have a hundred plus products to keep track of and limited manpower.

The best solution to prevent your advertising from turning into a money pit and protect your brand from stockout penalties on Amazon is through Pattern’s one-of-a-kind, expansive ecommerce tool Predict and its newest feature, In Stock Protection (ISP), available to Pattern brand partners now.

What is In Stock Protection?

Launched in November 2020, the In Stock Protection (ISP) feature on Predict is specially designed to automate the ad spend process for you so that you can save money, keep your products in stock, and protect your ranking on Amazon without breaking a sweat.

Through the ISP feature, Predict provides your brand with daily updated data on how many units you have on hand, how many you’re currently selling per day, and when your anticipated restock date is. Using that information as a baseline, Predict will automatically pause advertising on Amazon for products that are running low on inventory, divert ad dollars to other products, and re-enable ads once additional inventory is available.

“Everybody wants to advertise to sell more units, but if you don’t have enough items in stock, essentially what you’re doing with your ads is you’re accelerating your time to be out of stock,” Morales said. “What we’re doing here is we’re essentially preventing that from happening, saving the money we spent on ads, and hopefully prolonging the time that that item can be in stock from natural sell through until the next order comes in so that they have more units such that they don’t run out and don’t lose their ranking.”

In addition to giving you detailed data about your inventory, Predict provides personalized reports that give your brand insights on how many ad dollars you were able to repurpose by pausing ads on low stock products and how many organic sales (meaning sales that you would have missed out on had your product gone out of stock) were protected.

How does Predict's In Stock Protection determine whether a product’s ads should be paused?

Predict will pause advertising for products that meet one of the following criteria:

  • The likelihood of that product’s on-hand inventory meeting weekly demand is 50% or less.
  • The likelihood of the product’s on-hand inventory plus units in transit from the warehouse meeting demand for the next two weeks is 50% or less.

“If you’re not likely to meet weekly demand, we’re going to pause ads to protect spend. If you’re not likely to meet demand for two weeks, including inventory that’s coming, you’ll be paused for that, too,” Park said.

Let’s say you sell an expensive jewelry item and you only have one left in stock, but you typically sell five a week. In this scenario you also aren’t expecting a restock within the next two weeks. If you keep advertising, those five people who normally find you via ads aren’t going to all be able to purchase that jewelry from your brand that week. To protect your organic sales and make your last unit as profitable as it can be, Predict will automatically pause advertising on it and divert it elsewhere until your next shipment of jewelry arrives and is processed.

“This is all done without the user or an employee having to worry about it or keep track of what’s going on, which is a big benefit,” Morales said.

What about when you don’t want ads paused?

Maybe you don’t want Predict optimizations to run on a certain product because it’s a holiday special and you need to sell out of it. ISP can easily be overridden to allow for stockout exceptions.

Where can you access Predict's In Stock Protection?

ISP runs across all global Amazon marketplaces, streamlining international inventory and advertising processes as well as domestic. Currently, Predict and the ISP feature are only available to Pattern brand partners.

Success stories of Predict's In Stock Protection

Since the In Stock Protection update launched in November, Pattern has been able to repurpose over $1.03M USD in global ad spend and protect more than $2.41 million USD in organic sales for brand partners.

“Across the board for all of our brands, we have made adjustments 12,000+ times. That’s more than any person is going to be able to do,” Park said.

One of Pattern’s brand partners in the health supplement space has found major success with the ISP feature, repurposing $147k in ad spend and protecting $275k in organic sales in just the past six month. This brand was able to repurpose $10k in ad spend for their liquid vitamin D3 product alone through the implementation of these optimizations.

Part of what makes Predict—and a Pattern partnership at large—so valuable for brands is that Pattern manages both the inventory side of your business and the advertising side of your business, making the sales process far more efficient.

“No other ad tech has as much insight into that whole pipeline as we do,” Morales said.

More on Predict

Advertising and inventory optimization isn’t the only thing Predict can do. This comprehensive ecommerce tool helps Pattern’s brand partners manage every facet of their business. Predict can show brands if they’re winning the Buy Box, which competitors in the marketplace are selling their products, where price erosion is happening, how they can improve their customer experience, and much more.

To learn more about Predict or learn more about a partnership with Pattern, schedule a demo today!

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Global Ecommerce Weekly News: 27th September 2022
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Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)

How an Amazon SEO Agency Should Be Serving Your Brand
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How an Amazon SEO Agency Should Be Serving Your Brand

If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.

Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.

At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise  are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead. 

What is an Amazon SEO Agency?

An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.

A great Amazon SEO Agency partner will:

Prioritize Your Success

Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance

Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS. 

To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.

Provide Detailed Competitive Insight

A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.

It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.

Reduce Your Ad Spend Over Time

Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins. 

Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.

Amazon SEO Optimization and More

As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.

Contact us to learn more about our SEO optimization services.

4 Ecommerce Consultant Must-Haves
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4 Ecommerce Marketplace Consultant Must-Haves

Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces. 

Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.

So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.

Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products. 

What is an Ecommerce Consultant?

An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.

An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.

Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.

1. Brand Obsession/Specialization/Passion

At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services. 

2. Proven Results

It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.

3. Wide Range of Marketplace Expertise

It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.

4. Network of Resources

The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.

Achieve Your Ecommerce Goals With Pattern

Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces. 

With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.

Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.