Seeing your Amazon sales trend down can be stressful! As a seller, the best thing you can do for your business is to stay calm and investigate the dip in sales so you can diagnose the issue(s) and set a plan to get back on track.
We start our investigation by looking at the most common reasons why sales might be down. Some may seem obvious, but it’s important to rule out issues such as running out of stock before digging even deeper…
You Ran Out Of Inventory
A severe dip in sales is often an indicator that you’ve run out of inventory. Running out of stock has a negative impact on your Amazon listing, your account, and your ability to rank and win the buy box. For this reason, it is important to monitor your sell-through rate and inventory levels. With our Amazon analytics and diagnostic platform, myHorizons, you can use the inventory management tool to help with inventory forecasting.
Your Listing is Suppressed
If your sales drop significantly (or go to zero) one of the first things to check is the status of your listing. There are multiple reasons why Amazon will suppress or deactivate a listing, including if you are missing required information, have received too many complaints about a product, or have stranded inventory. Be sure to monitor your listings on a regular basis and routinely maintain and update your listings to fit Amazon’s requirements.
Similarly, your Creative can be taken down for a variety of reasons. If your imagery is completely removed, your listing will be temporarily suppressed. Make sure to also check on other Creative for potential issues, such as your Storefront.
You Lost the Buy Box
Winning the buy box is crucial to Amazon sales, which means it’s also one of the first things to look at when you notice a slump in sales. Your sales may drop significantly if you had the Buy Box and suddenly lost it or now have to share it with more sellers than before. If you are competing with other sellers for the same buy box, they can steal it from you by offering your products at lower prices. This can turn into a major issue if you are a brand owner or manufacturer with distribution leakage. Unauthorized sellers who get ahold of your products can attach to your listings, undercut your MAP and steal the Buy Box from you. It is extremely important to try to eliminate distribution leakage so unauthorized sellers can’t engage you in a race to the bottom for the buy box. Watch our Common Mistakes episode on distribution leakage here.
Sometimes Amazon may suppress the buy box. Additional sellers, a sudden significant increase in your price, or changes to Amazon’s algorithm can cause the buy box to be suppressed. The buy box may also be suppressed if you are listing your product online on another platform for a cheaper price. You can use Seller Central to check if you are winning or losing the buy box. We prefer to monitor the status of every buy box at once using myHorizons.
New Negative Reviews are Impacting You
If you’re experiencing lower sales, a good place to investigate is your customer reviews and seller feedback. Especially if you don’t have a lot of reviews for your product, one negative review can hurt your sales. Many buyers look at your most recent reviews before purchasing your product, and a scathing one-star review can turn potential customers away. Additionally, one bad review can lower your average, which has a particularly negative impact when this lower average causes a change in your stars. For example, if you move from a 4.3 average to a 4.2 average, your listing will adjust from displaying 4.5 stars to 4 stars. We recommend constantly monitoring your reviews with a tool like myHorizons. Additionally, though reviews are extremely important, avoid engaging in shady review manipulation. Instead, read our post on the best ways to generate positive reviews without violating Amazon’s guidelines.
There are Issues with Your Advertising
Advertising can have an extremely positive impact on product visibility and sales, so it only makes sense that when advertising stops your sales may take a hit. If a promotion you have been running has recently ended, this could be the reason why your sales have suddenly slumped. If your advertising on Amazon has stopped unexpectedly, check to see if there is a possible issue with your payment method. Also, investigate the possibility of Amazon purposely preventing you from advertising. For example, if your product gets flagged as “adult” your advertising won’t work. If your sales have decreased but advertising has not stopped completely, review your campaigns for profitability. Also, review and update keyword bids daily to ensure you are maximizing ROI.
Finally, don’t forget to check changes in advertising campaigns off of Amazon. Just as your advertising may unexpectedly stop on Amazon, your Google Adwords campaigns may be put on hold if your credit has run out or your ad doesn’t comply with Google’s requirements.
The Competitive Landscape Has Changed
You may also see an unexpected change in sales as the competitive landscape changes. New competitors may be entering the space, or existing competitors may be lowering prices or running aggressive advertising campaigns. A good way to start your investigation is by simply searching for your own products (as if you were a customer) to see if your visibility has changed. Also, check out your competitors to identify anything they’re doing exceptionally well- it might be time to update your listings, imagery, etc to stay competitive.
Your competitors can influence your sales in many ways. For example, you may see an unexpected spike in sales when your competitor runs out of stock. It’s important to investigate and take note of any significant changes affecting your performance.
A dip in your sales could also be explained by seasonality. For example, many businesses on Amazon experience peak sales in Q4 during the holiday season and a lull in sales afterward. On the other hand, a brand that sells sunscreen likely sees lucrative summer months and lower sales in the winter. It’s a best practice to keep track of your business’s monthly and yearly sales data so you can identify seasonal trends and forecast inventory accordingly. It is also important to pay attention to trends in sales by-product as it is possible that not every product in your warehouse sells at the same pace throughout the year.
Though seasonality is an external factor can’t usually control, being prepared for a rise or fall in your sales is key. Businesses who fail to forecast correctly for seasonality of demand can experience stockouts during peak seasons if they underestimate demand, losing out on sales and hurting their Amazon seller history. On the other end of the spectrum, overestimating demand can lead to cash flow problems and an unhealthy balance sheet. Businesses with excess stock at the end of a season have to either sell discounted products in end of season sales or take on the burden of inflated carrying costs until demand picks up again. Read more on how to forecast inventory for Amazon here.
Considering these common reasons for low sales on Amazon is a great way to start your investigation into your own performance. However, Amazon is a complicated platform and sometimes as sellers we have to dig deeper to diagnose problems. At Envision Horizons we know firsthand the many struggles of understanding your brand health on Amazon. That’s why over the past few years our team has been developing our own software to do the heavy lifting. Introducing our Amazon analytics and diagnostic platform, myHorizons…
Our technology, myHorizons, is a real-time marketing analytics and AI-powered advertising optimization platform. Built by our software developers, myHorizons enables our team and our clients to analyze profitability, optimize advertising, monitor consumer behavior, discover new opportunities, and make business decisions with confidence. Learn more about the many features and tools included in myHorizons on our technology page.
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