When it comes to managing your quantity, the devil is sometimes in the details. Nothing could be more true than when talking about how you manage quantity for Amazon’s pending orders.
If you’re selling on Amazon, you’ve noticed that all of your orders are not finalized and ready to ship right away. They go through a fraud check and are held in a Pending Order status while the payment method and details are verified. This process usually takes between 30 and 90 minutes, but it can take hours or days. Once the fraud test passes and the payment is finalized, Amazon releases the order and you’re free to ship the item to the buyer.
On the surface, that may seem innocuous, but a lot can happen in the relatively small window between order placement and finalization. Take this scenario as an example:
Bob’s Online Emporium is a multichannel e-commerce mecca with a thriving online storefront and healthy sales on Amazon, as well as eBay, Sears, Walmart and Best Buy. Bob’s wants to make sure that all the stock quantity on its shelves is made available for any of its marketplaces and its webstore, so it shares the same quantity between channels (at ChannelAdvisor we call this juggling quantity). When an order comes in from one site, the other sites are updated with the new adjusted quantity available so no site accidentally oversells.
However, for pending orders, Bob’s finds itself in a dangerous situation. Bob’s has had a great sales run on nickel-plated shower caddies. It has two left in the warehouse. Nancy Smith, an Amazon shopper, is sprucing up the two bathrooms in her house and sees that Bob’s offers a shower caddy that is perfect for her needs. She orders two at 10:32 a.m.
Nancy’s order goes into the Pending Order state on Amazon and Bob’s is unaware the product is now out of stock because the order still needs to pass through the fraud check before hitting his Sales view. Although Amazon knows Bob’s has sold out of the popular shower caddy due to Nancy’s order, the other sites Bob’s sells through don’t. At 10:37 a.m., Jake Jones zips over to Walmart.com and purchases one of the same shower caddies that Bob’s is offering there. Jake’s order was placed only five minutes into Nancy’s fraud check, so the product quantity still may not be updated for another 25 to 85 minutes. At this point, Bob’s has already oversold and is going to make at least one of its customers unhappy. Plus, overselling will lead to cancelled orders and put the company’s seller standing at risk. Too many cancelled orders on a marketplace will lead to a suspension, which would put Bob’s under terrible strain.
Depending on the sales velocity of your products, your business could be at even more risk than Bob’s. I bring up pending orders and Bob’s scenario because it represents a great example of how managing the details of your e-commerce business will make all the difference in your ability to establish and grow a successful online retail company.
ChannelAdvisor is great at managing the details. Within the Amazon settings in your ChannelAdvisor account, you can opt to import pending orders to ensure the quantity is dedicated to that potential (and likely) order. We’re also great at flexibility, so like many settings we offer, you can disregard or customize it if it’s not the best fit for your business.
So, before your Amazon pending orders process marks impending doom for your seller standing, examine your quantity management process more closely. If you’re a ChannelAdvisor retailer, go to your Amazon Order settings and enable the option to import pending orders.
Blog post by Rachel Miller, senior product marketing manager, ChannelAdvisor