How to Avoid Amazon Stockouts and Overstocks

Running an Amazon business feels a lot like walking a tightrope, doesn’t it? On one side, you have the terrifying drop of running out of stock right when your product hits the sweet spot. On the other, a swamp filled with slow-moving inventory and mounting storage fees.

This balancing act is the heart of inventory management, and mastering it is what separates the thriving sellers from the ones just getting by.

Honestly, the constant threat of Amazon Stockouts and Overstocks is enough to keep any entrepreneur up at night. You’ve worked so hard to find a winning product, nail your marketing, and build momentum. The last thing you need is your own inventory tripping you up at the finish line.

But here’s the thing – it’s not about finding a magical, perfect balance that never wavers. It’s about building a smart, flexible system that can bend without breaking.

It’s about knowing your numbers, anticipating the market, and having the right resources in place to act decisively. In this guide, we’re not just going to talk theory.

We’re going to walk through practical, real-world strategies to keep your inventory flowing smoothly, your customers happy, and your business growing.

Understanding Stockouts and Overstocks on Amazon

Before we get into fixing the problem, let’s make sure we’re on the same page about what we’re dealing with.

Stockouts and overstocks might seem like complete opposites, but they’re two symptoms of the same core issue: a disconnect between your supply and your customers’ demand.

Think of it like cooking a big dinner party. If you don’t buy enough ingredients, some guests go hungry (a stockout). If you buy way too much, you’re stuck with a fridge full of wilting vegetables for a week (an overstock). Both scenarios are less than ideal.

What Is a Stockout?

A stockout is exactly what it sounds like: you run out of a product. A customer lands on your Amazon page, credit card in hand, ready to buy… and they see that dreaded “Currently unavailable” message.

They’re not going to wait around. In a matter of seconds, they’ve clicked over to your competitor’s listing and completed the purchase there. You didn’t just lose a sale; you actively handed it to someone else. It’s a sharp, immediate pain that directly hits your revenue for the day.

What Is an Overstock?

What does overstock mean on Amazon? An overstock is the slow, silent killer of profitability. It happens when you have more inventory than you can sell in a reasonable amount of time.

That capital you invested is now just sitting on a shelf in a fulfillment center, collecting dust and, more importantly, storage fees.

Amazon’s FBA fees, especially long-term storage fees, are no joke. What might have been a profitable product can quickly turn into a liability, eating away at your margins month after month.

The overstock meaning on Amazon is simply cash trapped in physical form, preventing you from investing in faster-selling products or other parts of your business.

The Impact on Amazon Sellers

Let’s be real for a moment. These aren’t just minor inconveniences; they can seriously hamstring your business.

When you stock out, the damage goes beyond the initial lost sale. Amazon’s A9 algorithm is all about sales velocity. When your sales drop to zero, your product’s ranking plummets. All that hard work you did with SEO, PPC, and getting reviews can be undone in a matter of days.

Clawing your way back up the search results is a tough, expensive battle. Your Inventory Performance Index (IPI) score can also take a hit, which might lead to restrictions on how much inventory you can even store at FBA warehouses in the future. It’s a vicious cycle.

With an overstock, the pain is financial. Every unit that sits for more than a month is costing you money. After 365 days? The long-term storage fees are punitive. This is the classic overstock Amazon problem.

You have a warehouse full of “assets” that are actually draining your bank account. That money could be your marketing budget, your next product launch, or your own salary. Instead, it’s just… sitting there.

Practices to Avoid Amazon Stockouts

Alright, enough with the doom and gloom. Let’s talk solutions. Preventing stockouts is about being proactive and data-obsessed. You can’t just guess.

First, you need to get a handle on forecasting. Look at your historical sales data. Are there seasonal spikes? Does a certain holiday send your sales through the roof? Use tools to track your sales velocity – the number of units you sell per day. This is your baseline. A good starting point is to look at your sales over the last 30 or 90 days to get an average.

Next, understand your lead times. How long does it actually take from the moment you place an order with your supplier to when the products are checked in and available for sale on Amazon? This isn’t just manufacturing time. It includes:

• Production time
• Freight shipping time (by sea or air)
• Customs clearance
• Transportation to the Amazon fulfillment center
• Amazon’s check-in time (which can vary wildly!)

Always add a buffer to your lead time estimate. If your supplier says 30 days, plan for 45. Trust me.

Finally, establish a reorder point. This is the inventory level that triggers a new purchase order. For example, if your lead time is 45 days and you sell 10 units a day, you need at least 450 units (45 x 10) in stock to cover that period. This is your “safety stock.” So, you might set your reorder point at 500 units. The moment your inventory hits 500, you place a new order. This simple calculation can save you a world of hurt.

Practices to Avoid Overstocks

Avoiding overstocks requires a different kind of discipline. It’s about resisting the temptation of “bigger is better” and making decisions based on data, not emotion.

The biggest mistake sellers make is placing a huge order to get a lower per-unit price without considering how fast they can actually sell the product. A 10% discount from your supplier means nothing if half of that inventory sits for a year racking up storage fees.

So, how do you handle it? Start with conservative ordering, especially for new products. It’s better to sell out and reorder quickly than to be stuck with 1,000 units of a dud. Use your sales data relentlessly. If a product’s velocity is slowing down, don’t place the same size reorder you did last time. Adjust.

What if you already have an overstock situation? You need to liquidate it to free up capital. You can:

• Run aggressive promotions or lightning deals on Amazon.
• Bundle the slow-mover with a best-selling product.
• Explore the amazon outlet for overstock inventory, which is a specific program to help sell through excess stock.
• Look at off-Amazon liquidation options. In the overstock vs amazon debate for clearance, sometimes third-party liquidators or even sites like Overstock.com can be an option, though Amazon’s internal tools are often the path of least resistance.

The goal is to turn that dead stock back into cash, even if it’s at a small loss. That cash is more valuable for your next winning product than it is sitting in a warehouse.

Let’s Talk Growth – It’s Not Just About Inventory

Here’s a twist you might not expect. Sometimes, doing everything right in your business can actually cause inventory problems. Sounds weird, right? Let me explain. When you start making smart moves to grow your business, your sales can spike unexpectedly, and if your inventory plan isn’t ready for it, you’ll stock out in a heartbeat.

The Rise of Video in Listings

For instance, maybe you decide to finally add a high-quality video to your product listing. You hire a pro, they make a fantastic video showcasing your product in action, and you upload it. Suddenly, your conversion rate doubles. People who were on the fence are now clicking “Add to Cart” because the video answered all their questions. That’s amazing! But if you were forecasting based on your old conversion rate, you’re going to burn through your inventory twice as fast as you expected. Boom – stockout.

Expanding Your Reach with International Shipping

Or let’s say you take the plunge and expand to Amazon’s European marketplaces. This is a massive step for growth, opening you up to millions of new customers. But it also throws a huge wrench into your inventory logistics. You now have to manage inventory pools in different countries, deal with international shipping complexities, and forecast demand for entirely new markets. A sales surge in Germany could leave you scrambling while your US warehouse is perfectly stocked.

Growth is fantastic, but it amplifies the need for sharp inventory management. Every step you take to improve your business will put pressure on your supply chain.

Your Action Plan for Higher Sales

Okay, let’s pull all this together into a clear plan.

1. Audit Your Data: Before you do anything else, get a firm grip on your numbers. Know your daily sales velocity, your true lead times, and your profit margin on every single SKU. Use a tool if you need to; don’t rely on spreadsheets alone.
2. Set Up Systems: Create a clear reordering process. Use safety stock and reorder points for every product. Make it a non-negotiable part of your weekly workflow.
3. Communicate: Talk to your suppliers. Let them know about your upcoming promotions or seasonal plans. The more information they have, the better they can prepare to meet your needs.
4. Have a “Plan B” for Overstocks: Decide your liquidation strategy before you need it. Will you use coupons? Outlet deals? Bundles? Knowing your plan lets you act quickly before storage fees pile up.

Inventory Management Tools for Amazon Sellers

You don’t have to do this all by yourself with a calculator and a calendar. There are some incredible tools out there designed specifically for Amazon sellers. Think of them as your inventory co-pilot, handling the complex calculations so you can focus on strategy.

• InventoryLab: A fantastic all-in-one tool that helps with listing, accounting, and inventory management. It gives you a clear picture of your profitability right down to the individual SKU.
• Sellics: A powerful platform that combines PPC management, SEO, and inventory control. Their inventory module helps forecast demand and tells you exactly when and how much to reorder.
• Jungle Scout or Helium 10: While known for product research, both of these suites have robust inventory management features that integrate forecasting with your sales data to prevent stockouts and overstocks.

Using one of these tools can feel like turning the lights on in a dark room. The clarity they provide is a game-changer.

Financing Options to Manage Inventory Better

Now for the elephant in the room: cash flow.

You can have the most perfect forecast and the most organized reordering system in the world, but if you don’t have the cash on hand to place that big order for the holiday season, none of it matters. You’ll still stock out. You know what? This is one of the most common hurdles growing Amazon businesses face. Sales are great, but all your money is tied up in inventory that’s either on a boat or on a warehouse shelf.

This is where smart financing becomes a strategic tool, not a last resort. Let me explain. At Eboost Partners, we see this every day. A successful seller has a golden opportunity – maybe a chance to be featured in a major gift guide or a massive spike in demand for their product – but they can’t afford the inventory to capitalize on it.

An Amazon business loan from a partner who understands e-commerce can bridge that gap. With access to loan amounts from $5,000 to $2M, you can place that crucial inventory order without draining your bank account. This allows you to:

• Meet Peak Demand: Order enough stock for Prime Day, Black Friday, or Q4 without breaking a sweat.
• Negotiate Better Prices: Placing larger orders can often get you significant per-unit discounts from your supplier, boosting your margins.
• Invest in Growth: Use the freed-up cash for marketing, launching new products, or expanding to new marketplaces.

We designed our financing solutions for the realities of an Amazon business. With repayment terms up to 24 months, you have the flexibility to pay it back as you sell the inventory. Plus, our automatic daily or weekly payments are designed to work with your cash flow, not against it. It’s a simple, seamless way to ensure you never miss a sales opportunity because of a temporary cash crunch.

Scaling Your Amazon Business with Smart Inventory Practices

Inventory management isn’t just a defensive move to avoid problems. It’s the engine of your growth.

When you can confidently keep your products in stock, you create momentum. The Amazon algorithm rewards you with higher rankings, which leads to more sales, which allows you to place even smarter inventory orders.

Getting it right transforms your business from a reactive, stressful scramble into a proactive, strategic operation. You stop putting out fires and start building an empire.

It gives you the freedom and the capital to think bigger, act faster, and truly scale your brand. If you’re ready to break the cycle of stockouts and overstocks and need a financial partner to help you fuel that growth, reach out to us at Eboost Partners.