Over the last few years, Amazon has really improved the free Prime shipping incentive for their customers.
It used to be Free 2-day shipping for all Prime customers. Then they added Free Same-day shipping for select items as long as the buyer hits the spending minimum (currently $35).
And now Amazon is transitioning to Free 1-Day delivery for all Prime customers.
As these delivery times have sped up, I've noticed a change on the backend (for sellers) too. As these shipping speeds increase, so has Amazon's use of a distribution center fulfillment model.
Once upon a time, Amazon would assign me a few Fulfillment Centers, I'd ship my items there, and that's where they'd stay.
But now it's much more common for my inventory to get transferred to other Fulfillment Centers as soon as it's off the UPS truck.
This means that items spend more time in “Reserved” status for sellers. And for buyers, they may head to a product page on Amazon.com and find that a certain product is “backordered”.
I've noticed that there are a lot of misconceptions about backordered inventory among Amazon sellers. So today I want to clear the air about the three myths that I hear most often.
How to Tell if Your Inventory is Backordered
First, I want to make sure you know what I'm talking about when I'm discussing “Backordered” inventory.
Your FBA inventory becomes “Backordered” when Amazon transfers your items from one Fulfillment Center (FC) to another.
A lot of sellers are really confused by this. If Amazon has you send all of your inventory to one warehouse, why do they then immediately transfer it to other FCs?
They're usually doing this to get items as close to buyers as possible. And I personally think it's a good thing. I'd rather send my inventory to just 1 or 2 FCs at a time and let Amazon handle the transfers on their end. Plus, it leads to happier Amazon customers.
I should point out that only FBA inventory can be backordered. If you're a FBM (Merchant Fulfilled) seller, then your inventory is either In Stock or Out of Stock (as in, you have it on hand or you don't!).
Amazon often transfers inventory as soon as they finish processing your inbound shipment. So your inventory might go straight from Inactive status to Reserved status. Here's how it looks in Seller Central:
I can see that this book is in Reserved status which means that Amazon is processing it in some way. If I click the little arrow, I can get more information:
As expected, this item is in FC Transfer status.
For the buyer (or you when you're stalking your competition on Amazon.com 😉), Backordered inventory looks like this (this screenshot was taken on May 1):
So if I'm going to buy this item, I know that it won't be “in stock” until May 4. I'll still get my Prime shipping benefits, but this will definitely delay my delivery estimate.
If you're checking out your competitors from the “View All Offers” page, you'll see backordered offers that look like this:
So if you're trying to find out if you have any backordered inventory, you can look for “Reserved” inventory in Seller Central or you can look for your offer on Amazon.com.
I usually only check the product detail page on Amazon.com if I'm curious when my inventory will be live again (May 4 in the example above). Sometimes items are only backordered for a few days and other times it can be a couple of weeks. But I don't stress about it too much!
Now it's time for some myth-busting!
Myth 1: Backordered Items are Out of Stock
There's a big difference between inventory that's Out of Stock and inventory that is Backordered (or in FC Transfer status) at Amazon.
A lot of sellers and buyers get confused when they see wording like “In Stock on May 4” or “Due in stock on May 4” on an Amazon product page. To a lot of people, this signals that there isn't actually any in-stock inventory.
Naturally, Amazon sellers might get upset thinking that their competitors are getting away with listing Out of Stock inventory on the Amazon website!
But backordered inventory is in stock. It just isn't available for immediate shipment to the customer. Once it's in Amazon's possession, it's no longer Out of Stock.
On the flipside, inventory in an Inbound Shipment to Amazon is not the same as being backordered. Your inbound inventory is Out of Stock and can't be purchased by customers.
So anytime you see that your new inventory is in FC Transfer status or is on backorder, it means that an Amazon Fulfillment Center has already Checked In and Received your shipment. These items are just being transferred from one fulfillment center to another.
Myth 2: Backordered Offers Aren't for Sale
This is another big misconception. And it usually happens when a seller notices that their own inventory is stuck in Reserved/FC Transfer status in Seller Central.
It doesn't help that Amazon often shows backordered inventory in the “Reserved” column instead of the “Available” column. That sort of makes it seem like your inventory isn't available for purchase!
But here's the good news: your backordered inventory is live and available for sale on Amazon.com. Customers can (and will!) purchase your inventory while it's being transferred.
Amazon knows that it's their decision, not yours, to transfer inventory around. Therefore they're not going to punish sellers by switching their inventory to Inactive status during FC Transfer.
So don't panic when your inventory looks like it's not available. You will still get sales!
Myth 3: Backordered Offers Can't Win the Buy Box
No one can fully decode the mysteries of Amazon's Buy Box algorithm. But here's something that we do know: backordered items are fully eligible to rotate into the Buy Box.
Again, Amazon doesn't want to punish sellers just because their inventory is being transferred around Amazon's fulfillment network.
But sometimes sellers with plenty of in-stock inventory get mad when they see a backordered offer in the Buy Box. It might seem like it's not fair for a backordered offer to win the buy box when other sellers have inventory ready to ship.
Amazon actually does this to be as fair as possible. But it might be hard to see why until you're the seller with the backordered inventory!
Here are a few things to keep in mind about backordered offers in the Buy Box:
- If a buyer is in a hurry, she may skip the backordered BB offer and choose another seller who can offer regular Prime 1-day or 2-day shipping.
- You can sometimes price your offer a little higher than your backordered competitors and still get the sale.
- If you price competitively, you will probably still rotate into the Buy Box alongside the backordered sellers.
You'll see backordered offers in the Buy Box more often in the busy Q4 selling season when sellers are sending in more shipments.
Don't Lose Sleep over Backordered Inventory
I hope this has helped you make sense of Backordered inventory. It happens to all sellers, so there's no reason to panic if your offers become backordered.
The important thing to remember is that customers can buy your inventory while it's in FC transfer status. As long as you price competitively, you'll still get some sales!
Do you have any questions that I missed? Let me know in the comments.