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Amazon Demand Planning: Demand Transfer Complications with Ecommerce

January 28, 2025

This post is based on our webinar “Demand Planning on Amazon Explained.”

eCommerce and Amazon businesses face many similar challenges—but demand transfer and unit forecasting are two that are markedly different on Amazon. Whether you’re a Seller or Vendor, the challenges you face when your products go out of stock extend far beyond just lost sales. Your sales velocity, organic rank, and advertising can all fall flat at an alarming rate, and take a long time to build back up.

Wendi Mathis, Senior Vice President of Strategic Accounts at Channel Key, is sharing her perspective and advice on demand transfer and unit forecasting on Amazon, and how her team helps avoid common pitfalls.

What is Demand Transfer?

Demand transfer is adjusting a consumer’s desired purchase to match what you have in stock.

For example, let’s say your brand sells bikes. You’re out of stock on your black bike, but you have blue in stock. If a customer walks into your store wanting to buy a black bike, but only sees blue, you’re asking their demand to transfer to the blue bike. In the store, if they only see blue, they’re more likely to buy the blue bike.

In the brick and mortar store, they can’t see the black bike because it’s out of stock—but on Amazon, your customer can see all your competitors’ listings and can see that you’re out of stock of the black bike. 

It’s difficult to get the average Amazon customer to transfer their demand from the black bike to the blue bike, because they can just go and buy the black bike from your competitor, or find one in a brick and mortar store, or look on Google Shopping.

If your black bike is your bestseller, even when it’s out of stock, Amazon will still push that color as the cover image on the search results page—making it more difficult for the demand to transfer when the customer clicks on your listing. So you can see that putting more advertising budget behind it doesn’t solve the problem, because Amazon will still push that best-selling child-variation (that’s out of stock).

Lost Sales Due to Out of Stock

If you haven’t done a strategic forecast, you might often encounter lost sales due to being out of stock. You can’t estimate exactly how much you lost due to being OOS because there’s so many factors to take into account.

You could have lost the sale because the demand didn’t transfer to another variation of yours. You could have lost even more sales because Amazon pushed your product down in the organic ranking algorithm because it’s been out of stock for too long—even just a few weeks can be costly to your business.

You’re not just losing those sales while OOS—there are countless other ripple effects that can cost your business money, even outside of that two-week out-of-stock period. After being out of stock, it could take you many more weeks to come back up and start getting that demand and conversion again. In the meantime, your competitors have started winning on those keywords, improving their rank.

Adjusting Forecast for Lost Sales Historically

After having a major OOS event on Amazon, it’s unlikely that you’ll ever fully recapture those lost sales. The ripple effects we talked about earlier can make it hard to recover from an out of stock period.

While you can’t count on recouping all of your lost sales, there are some tactics to forecast accurately to recover. If you’re selling a high-demand brand, you’ll likely bounce back a lot faster than if you have a ton of competition or don’t own the market share. You likely won’t regain 100% of those lost sales back, but it’s not impossible.

You have to take all of this into consideration in your strategic forecast, and then pay attention to that next year when you have the anniversary of that time period. You can mark this time period using the Event Stakes in Kapoq, making it easy for you to adjust your forecast.

Vendor Central

“If you’re a Vendor on Amazon, what happens in Amazon’s demand forecast and their demand planning is once an item is out of stock, the Amazon algorithm and the demand forecast are looking backward, and they can’t see that,” says Wendi.

Now you’ll need Amazon to do a manual input to their purchasing algorithm. And if you don’t have a vendor manager, or an AVS, or a relationship with your vendor team, you likely will never see that same demand come back again. It is nearly impossible. You can try to play some games to increase the demand, but that is going to be a manual task and doesn’t guarantee a result.

Of course, another reality is that other manufacturers could come in and take your sales to Amazon while you were out of stock. If Amazon really wants to source a black bike and can’t get one from you, they might look for other suppliers who have them in stock. 

Seller Central

If you’re in Seller Central on Amazon, losing sales due to being out of stock will drastically decrease your sales velocity, which is one of the biggest factors in organic rank. Amazon promotes products that have good in-stock rates and fast delivery, and if you don’t have that, your rank will suffer.

Once you are back in stock, it can take an exponentially higher amount of ad spend and sales velocity to get back to where you were before. And competitors can swoop in to run ads on your product detail page, or just take over your placements on regular keywords.

Tackling demand transfer and unit forecasting on Amazon doesn’t have to be difficult. With Kapoq, you can minimize the time your products are out of stock to ensure your sales velocity stays nice and high.

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