How to manage your “Out of stock” inventory with ease

Out of Stock

Do you fear running out of stock? If the answer is no, then I guess you’re already doing your inventory management efficiently enough. But if its yes, then this article will shoo away your fear.

Being out of stock is apparently a good sign that your product is doing very well in the market. However, looking at it the other way round – you’ll realize that it is making a huge loss eventually.

A CNBC report estimates the total value of lost sales for retail businesses due to stock-out issues was $634.1 billion in 2015. If you are experiencing frequent out of stock then it may demolish your brand trust and increase customer service costs.

So to keep your brand trust alive and lessen the other extra charges lets see how you can-

  • Avoid getting out of stock
  • What to do if you went out of stock?


Avoid getting out of stock

Create an efficient reordering threshold

When it comes to inventory level, sellers often get confused for how much inventory should they keep to avoid getting out of stock. In that case, reordering point comes into the picture.

The threshold of reordering quantity, also called the stock-out threshold, is the least count of an item you must keep on hand at any given time. When inventory levels drop below the threshold quantity, you reorder stock to replenish your items on hand.

What inventory level would be optimal, it depends on several factors such as – demand forecasting, seasonal fluctuations in supply, running a promotional advertising campaign, the possibility of any external factor affecting the supply chain (like climatic conditions), reliability of the supply chain partners, and more. Therefore having an inventory management software that provides you the most efficient reordering threshold level can prevent your inventory from getting out of stock.


Do demand forecasting

Forecasting demand is as essential as keeping safety stock in your inventory. Demand forecasting let sellers anticipate how much inventory to order and when. You can even leverage reporting and analytics tools to determine the stock level. Hence accordingly you can plan your stock replenishment cycle, to prevent going out of stock.

By demand forecasting, you can determine your reorder point by going off your sales history, current order quantities, and on-hand quantities.

For example: Let’s say you have an ecommerce store of fashion apparels. And you forecasted demand by analyzing your past sales history of the holiday season that this time 15% more sales are being expected. So, you’ll prepare your apparels’ inventory accordingly and the risk of getting out of stock would be minimized.



Automate Inventory process

Gone are the days when retailers had to manually keep track of their inventory. Inventory automation process has got tons of benefits other than just preventing out of stock scenarios, here’s few of them:

  • It maximizes scalability
  • Increases inventory efficiency and productivity
  • Saves time and money
  • Reduces human error


Inventory automation is now used by retailers and sellers for smooth operation. As the number of retailers and products are increasing in the market, the highly stressed human force finds it difficult to keep pace with the competency.

Having an automated inventory system ease a sellers life, as he/she don’t have to worry about getting out of stock – because the inventory management software automatically reorders the inventory, whose inventory level is low or has reached a threshold.



What to do if you went out of stock?

Above points were regarding how to avoid/prevent stock outs. But what a seller would do when the selling product actually goes out of stock. Here are a few tips to tackle “out of stock” situations.


Tell customers where they can buy the item offline

For multichannel retailer showing a message like “This product is currently out of stock” may turn off many online buyers. And there are high possibilities that he/she may never come back to your store again.

Also, online buyers are always desperate, if they don’t find the product they are willing to buy, they search for other ways to get it immediately. So, make sure that you are not that one seller where buyers don’t get the product – because your competitors are already waiting to grab each and every opportunity.

However, when the demand in unexpectedly high, and your online product’s may be unavailable on the website (due to delivery-guy shortage), but in stock at one of the physical stores — during this type of cases, contact the online visitors via email or any medium and let them know where they can get the exact product from physical stores near them.

Halfords provides a good example here – the cycles are unavailable to buy online, but they smartly presented the option of “reserving” it and “collecting” in store:


Never make your product page down (404 error)

You must be doing social media advertising or you might have come across many online advertisements. Just think of the scenario where you came across a catchy mobile advertisement and when you clicked it – all you found is the view of big and bold “404 Error Page Not Found !”.

Within a fraction of seconds, any visitor will close that tab. Trust me this particular thing creates a very unhealthy impact on your prospective customers and even on Google’s ranking factor.

Instead, the solution to this would be:

→ Keep the page live and label the product as temporarily out of stock.

→ Redirect the page to a relevant product (a post-redirect message will aid user experience).


Contact the former visitors when the product is back

If you think that it’s a good idea to not show the out of stock product on the website – then you might be wrong. Because not displaying unavailable or out of stock items prompts customers to think that you normally don’t sell or have the item, and they might not come back to check again.

A patient shopper might be willing to wait for your product to restock, rather than heading to someone else (competitor). Ask for a little extra time from your customer and a “your wait is over” email message, might ease the process of making them purchase your product.

Amazon and many popular ecommerce sites notify customers when the item is back in stock via emails. If you want to follow this technique all you need to do is to capture the emails.  


Show them similar alternatives to that product

The human mind is a complex thing. It changes even when you don’t want to. Having said that, consumers purchasing behavior can be manipulated. Offering similar product options may be enough to satisfy the customer and get them to buy something else rather than showing ‘product currently unavailable’.

For example, you can do something like this:  “Sorry the black-cushion cover with the white-dragons design is currently out of stock, but we have the same cushion design in Red variant”


Push out-of-stock products to the bottom of search and category pages

It creates a negative image on the customer when they are interacting with your website for the very first time and all they see is out of stock products. By using a smart inventory management software that automatically pushes out of stock products to the bottom of search pages and listing all the available items on the top may lead to fewer disappointed shoppers.



To conclude, if you’re an omnichannel retailer there could be instances where you went out of stock. You can provide them clarity about what to do next instead of being sorry and apologizing repeatedly.

Be creative and innovative and try following the above-mentioned tips to effectively handle the out of stock situations.

Abhishek Biswas

Abhishek Biswas

A Listener, who speaks less and writes more. Will choose Pizza over anything. Doing non-technical pieces of stuff, with a degree in a technical field. Has stage fear thus prefers "Stealth-mode" conversation, also the Content Curator at Orderhive. . . . <<--- In the picture, I'm looking at my happy belly ;)


  1. Avatar Nick Posted June 28, 2019 at 11:56 am | Permalink

    Nice article on out of stock inventory. Found an interesting article on warehouse inventory management tips here.

  2. Avatar JUDY ROGERS Posted January 26, 2020 at 5:20 am | Permalink

    Concise and very informative!

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