Preventing Out-of-Stock Situations in eCommerce

It’s an all too familiar feeling for any eCommerce store. Your sales chart starts to rise, customers add products to their carts, but then instead of checkout, orders start dropping, and your shop suddenly encounters a dreaded out-of-stock situation – leaving customers looking elsewhere for the same item. In this blog post, we’ll discuss just some critical ways for out-of-stock prevention and keeping your business on track without overstocking.

What Is a Stockout?

A stockout or out-of-stock (OOS) situation happens when a company runs out of a particular item and can’t complete client orders. The opposite of an overstock is when there is an excessive amount of inventory of a product with low demand. 

Preventing Out-of-Stock Situations in eCommerce

Stockouts can occur at any stage in the supply chain for various reasons, such as production delays brought on by challenges obtaining raw materials or retail shelf unavailability caused by inadequate inventory management techniques, or unexpectedly increased sales.

Must-know ways for out-of-stock prevention in eCommerce

Boost the accuracy of your inventory

Stockouts may unintentionally result from inaccurate inventory counts. And out-of-stock prevention requires minimizing human error. By routinely checking and updating stock levels, businesses may prevent inventory problems, but doing so manually increases the chance of rare mistakes. 

In order for inventory data to be updated and communicated throughout a centralized system in real-time, it is more efficient to use an inventory management solution that enables employees to scan things as they are received and picked to fulfill orders.

Make cycle counting a regular habit

Closing the store regularly to do a comprehensive inventory count is important but not always feasible. Cycle counting – measuring and inspecting a small number of SKUs regularly — may be far more efficient. 

Preventing Out-of-Stock Situations in eCommerce

Inventory teams can use it for auditing inventory amounts and checking that absolute counts match what’s stated in a spreadsheet or inventory management software.

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Enabling BackOrder

Timing is crucial for out-of-stock, losing out on potential customers is as heartbreaking as it is preventable. Have a plan to enable BackOrder functionality for when your inventory runs out so customers can keep purchasing. Set a BackOrder threshold so if inventory goes any lower and there is no certainty that resupply will occur in time, you can safely pull the product out of rotation.

Calculate lead times

The lead time, or the duration between placing an order and receiving it is essential for determining the reorder point. It is also a crucial aspect to consider when evaluating potential and present suppliers. In general, shorter lead times are desired since they can reduce the cost of carrying inventory. When products are selling out more quickly than expected, shorter lead periods might be helpful.

Preventing Out-of-Stock Situations in eCommerce

Boost your planning skills

One key aspect of doing company is being able to predict client demand effectively. Of course, customer demand might suddenly and drastically change, making forecasts useless. 

However, in most situations, demand forecasting may assist in maintaining inventory levels at an appropriate level, assisting in out-of-stock prevention, shortages, and overstocks – and ultimately saving money. 

Consider consumer patterns and seasonality to enhance forecasting abilities. Additionally, think about implementing an inventory management system that delivers data and insights automatically to support predictions.

In Conclusion

Out-of-stocks not only turn away potential customers but also damage customer loyalty in the long run. But with some vital inventory management steps in place, it’s possible to prevent such situations entirely while keeping your costs relatively low. An easy first step is to try out BackOrder – BigCommerce’s leading inventory management application.

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If you have any concerns about the topic of out-of-stock prevention, please don’t hesitate to let us know, we are happy to support you with our expertise!

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