When Growth Stalls Because Stock Runs Out

Matthew Shearer Last Modified : Sep 9, 2025

Reviewed by: Bruce Sayer

Why Running Out of Inventory Costs More Than You Think

For marketplace sellers, nothing is more frustrating than seeing demand soar—only to realize you’ve run out of stock. At first, a stockout might seem like a temporary setback. But in reality, it can trigger what many sellers call the “inventory death spiral”: lost sales lead to lower search rankings, which reduce visibility, which further depresses future sales. Recovering from this cycle isn’t just hard—it can be extremely costly.

The Inventory Death Spiral Explained

Running out of stock doesn’t just mean a pause in sales—it sets off a chain reaction that can derail months of hard work. Sellers often call this the “inventory death spiral.”

1. Out of stock = lost revenue
   The first hit is obvious: when shelves are empty, customers can’t buy. Every day out of stock equals missed revenue opportunities and frustrated customers who may never return.
2. Momentum disappears
   Marketplaces like Amazon reward products that maintain steady, consistent sales. The moment a listing stops converting, the algorithm shifts its focus to other products that are still selling. The sales velocity you worked hard (and paid heavily in ads) to build evaporates.
3. Search rank plummets
   Once your listing loses momentum, its ranking drops. A product that once sat on page one can quickly slide to page five or beyond. And since 70% of shoppers never click past the first page of Amazon results, being buried deeper all but eliminates organic sales.
4. Reentry is expensive
   Even when inventory returns, the listing doesn’t bounce back automatically. Sellers often have to pump money into pay-per-click ads, discounts, and promotions to regain lost ground. In some cases, it can take weeks—or even months—to climb back to your original visibility.

The spiral is brutal: the longer you’re out of stock, the harder and costlier it is to recover. One Amazon beauty brand reported losing nearly half its keyword rankings within 10 days of going out of stock. It took six weeks and thousands in ad spend to claw back to their previous position.

For smaller sellers without deep pockets, one major stockout can permanently change the trajectory of their business.

The Real Cost of Going Out of Stock

The numbers tell the story:

• Amazon data shows sellers can lose up to 30–50% of sales rank within just 48 hours of going out of stock. Regaining that rank can take weeks, even if inventory is replenished quickly.
• A survey by Jungle Scout found that 58% of sellers listed inventory management as their biggest operational challenge, with stockouts leading to lost revenue and wasted ad spend.
• According to eMarketer, retailers lose an estimated $1 trillion globally each year due to stockouts and overstocks combined—with small and mid-sized sellers hit hardest.

For one apparel seller, a three-week stockout of a best-selling SKU during peak season didn’t just cost $40,000 in lost sales—it also caused their product to drop off the first page of search results. It took two months and an additional $10,000 in ads to claw back visibility.

Breaking the Cycle

Preventing stockouts is about more than good forecasting—it’s about having the cash flow to place purchase orders before inventory runs dangerously low. But here lies the dilemma: sellers often don’t have capital available when they need it most, especially with funds tied up in existing stock or delayed marketplace payouts.

But what if those shelves didn’t just hold goods—what if they held the solution? Imagine turning today’s stock into the fuel for tomorrow’s growth, without waiting on sales cycles or delayed payouts.

A smarter way to unlock what you already have is coming.

About the writer

Matthew Shearer

In his role as SVP, Channel Sales at eCapital, Matt he leads our go-to-market strategy for embedded finance solutions. Leveraging his extensive network, Matt establishes new partner relationships and drives revenue, showcasing his dedication to business success and innovation in fintech.

Previously, at Funding Circle US, Matt drove innovative lending solutions as the Head of Financial Institutions for Strategic Partnerships and Enterprise Sales. He also excelled in strategic roles at Alviere and Viasat, and began his career managing diverse lending portfolios at FirstBank, where he cultivated a thriving organizational culture.

Matt holds an MBA from the University of Colorado Boulder and a BBA from the University of San Diego, complemented by a certification in Strategic Sales Management from Harvard Division of Continuing Education.

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