Out of Stock: 8 Ways to Avoid Stockout

Managing your inventory and predicting your sales can be hard. Customers do not like it when a particular item is not in stock. As a result, they will go to another retailer where the item is available.

Stockouts, over time, can have devastating effects on your e-commerce business.

But what does it mean exactly? It is a situation wherein your inventory cannot fulfill the demand for a particular product.

This can lead to a decrease in sales and revenue, poor online reputation, a decrease in customer loyalty.

This is where inventory planning services could come in handy. That's because it allows you to prevent running out of stocks.

In relation to this, we have listed nine more ways on how you can avoid stock out for your online store:

1. Use a modern inventory system

Gone are the days when you need to use Excel sheets or pen and paper ledgers to manage your inventory.

Modern inventory systems like cloud-based e-commerce databases allow you to manage your inventory. It also lets you continue with your operations even if there is no internet access.

2. Stay organized and vigilant

Having a regular audit of your inventory and stocks is one of the best ways to manage your e-commerce business.

Doing so ensures that your online store reflects whatever is in your inventory. It also allows you to move your items in real-time.

For example, you sell Air Jordan 1 online and you only have 5 items remaining. When someone bought a pair of Air Jordan 1, your online store should automatically decrease the stock count. And the same thing should go in your warehouse.

This is where auditing comes in. You have to double-check that whatever is on your online store is the same as your warehouse, and vice versa. Otherwise, you can mismanage your customers' expectations.

3. Consider Radio Frequency Identification

More and more retailers are now developing a high-end approach to help maintain inventory accuracy.

A lot of them are now using Radio Frequency Identification (RFID) technology which stores and tracks product information using a chip. This chip is usually embedded in the item's packaging or tag.

RFID allows you to track and look for products using a handheld scanner. This makes it easier to track down where the item is.

4. Conduct regular stock counts

Doing a physical inventory count involves counting all your retail products in person.

Usually, a member of your staff or a team of workers will do a stock count. This often happens in the stock room or on the retailer’s sales floor.

The stock count is then recorded on an inventory datasheet. This may sound cumbersome, but the goal here is to have checks and balances.

Doing so ensures that the stock data will match the inventory in the actual store.

5. Practice demand forecasting

As the term implies, demand forecasting is the process where you expect the demand for a product. That way, you will know what products to put forward on your online store and when.

You can use your own judgment for this. Or you can consider several factors like seasonality, local economic state, and historical sales data.

Mind you, historical data can provide you with helpful insights on how well your products will perform.

Besides, a forecast demand can help you plan your future operations. This includes identifying which products you should stock up.

6. Pay attention to consumer trends

Another thing that you should pay close attention to is the current customer trends.

Observe if there is a particular product that your customers are gravitating towards.

For instance, there is a growing awareness of the importance of gut health. And with that, there is a demand for kombucha. If you are in the health sector, then selling kombucha drinks should be something to consider.

A lot of businesses are often caught off guard with the spikes of sales. Moreso during holidays. That's why you must pick up on patterns in the market. That way, you can forecast customer demand.

7. Set re-order points

Now that you have an idea of the number of products that you should have at a particular time, the next thing that you need to do is to create re-order points.

This allows you to create the right merchandise if needed. It also prevents your e-commerce store from running out of stocks.

To get the best results, use an inventory management solution or POS which allows you to set re-order points. That way, you can receive automatic notifications if your stock levels are running low.

8. Work on your communication

Failure to effectively communicate with your suppliers can lead to delayed or missed orders. This can result in having out-of-stock products.

To avoid this kind of scenario, you need to work on improving your communication with your manufacturers and suppliers.

Make sure that you get all your orders and deadlines on paper. Doing so ensures that everyone in your team is on the same page.

You should also inform your suppliers about any issues early on.

Let's say, that a particular product is selling faster than expected. Do not wait until the last item is sold before you replenish it. If you see that you are able to ship 80% of your inventory, then you should take action.

Contact your manufacturers and suppliers immediately. That way, you can place a supplementary order. This also allows you to meet the demands of your customers.

Finally, you may also opt to share your sales data with your suppliers. That way, you can both agree on product schedules and orders.

Prevent Stockouts for Good

Maintaining healthy stock levels for your online store can be tedious. But do not let this stop you from increasing the sales of your online store.

When you streamline your supply chain process, you can prevent stock out from happening. This can also compel your customers to be loyal to your business.

Also, learning to understand the causes of stockouts will help you come up with actionable solutions on how to prevent this from happening.