Did you sell out of a product too fast? Or maybe you’re facing supply chain challenges and delays in shipments. You’re not alone. Out of stock (OOS) inventory is a culprit in many DTC brands. Shortages can be quantified as any amount less than your ideal WOS target. Reduced to numbers on a spreadsheet, these insights can go unrecognized until you realize your stock to sales ratio is off. Before you stress about missed sales or go hiding everything on your website, take a look at the following ways to strategically manage your short stock while maintaining customer loyalty. What is the cost of being out of stock? Beyond the impact on profitability and your customer’s experience, volatility in inventory has an undeniable affect on forecasting. Ensure you’re utilizing the critical metrics to track the health of your inventory. Streamlining your processes can make way for deeper analysis of your business. With Fuse, data is actualized daily to save you time and ensure accuracy. No more exporting data into a fragile web of Excel sheets. Fuse generates algorithmically-driven forecasts, while helping you maintain granular control of the data. We streamline the inventory planning process and help you manage your supply chain in real-time. Master your cash flow and optimize your business with Fuse Inventory.
FAQs
9 Ways to Deal with Out-of-Stock Inventory? ›
Offer solutions:
Pre-orders: Allow customers to pre-order the out-of-stock item with an estimated delivery date. Consider offering a discount or free shipping for pre-orders. Rainchecks: If applicable, offer rainchecks so customers can purchase the item at a later date at the original price.
- Prevent out-of-stocks with accurate forecasting. ...
- Identify and fix a broken assortment. ...
- Optimize unbalanced allocation. ...
- Automate your replenishment with AI. ...
- Optimize your safety stock. ...
- Be proactive about inter-store transfers.
- Monitor inventory levels: The best way to manage out-of-stock items is to avoid them in the first place. ...
- Communicate with customers: ...
- Offer alternatives: ...
- Use backorders: ...
- Keep customers updated: ...
- Remove the item from your website: ...
- Consider preorders: ...
- Don't overpromise:
Offer solutions:
Pre-orders: Allow customers to pre-order the out-of-stock item with an estimated delivery date. Consider offering a discount or free shipping for pre-orders. Rainchecks: If applicable, offer rainchecks so customers can purchase the item at a later date at the original price.
- Expedite Parts. ...
- Improve Forecasting. ...
- Improve Lead Time Accuracy. ...
- Eliminate Single Point Failures. ...
- Develop a Shortage Attack Team (or better shortage management processes) ...
- Improve Supplier Collaboration. ...
- Ensure accurate inventory data. ...
- Regularly update PFEP.
- Offer customers a free gift. ...
- Bundle products. ...
- Clearance sales. ...
- Return items to a supplier. ...
- Donate dead stock items. ...
- Seek out partnership opportunities. ...
- Sell items on marketplaces. ...
- Refresh or re-merchandise.
To manage obsolete inventory, businesses can consider liquidation, repurposing, donation, or recycling. To avoid obsolete inventory, businesses should implement accurate demand forecasting, lean manufacturing practices, regularly review inventory levels, and keep up with market trends.
What will you do in case of an out-of-stock situation? ›Create backorder and restock items
Sometimes the customer can wait until you restock items from the suppliers. If this is the case, you can create a backorder for the out-of-stock items, then purchase more from the suppliers to fulfill the order.
Stockouts can be caused by a variety of factors, such as incorrect demand forecasting, supply chain interruptions, production issues, inadequate inventory management, or unanticipated demand surges.
How to recover from a stockout? ›- Share if product is temporarily or permanently unavailable. ...
- Shift your marketing strategy to alternative products. ...
- Get customers their money back. ...
- Make the out of stock product less visible. ...
- Let customers pre-order or choose a longer shipping time.
Which technique is used to handle inventory shortages? ›
Inventory management tries to efficiently streamline inventories to avoid both gluts and shortages. Four major inventory management methods include just-in-time management (JIT), materials requirement planning (MRP), economic order quantity (EOQ) , and days sales of inventory (DSI).
How do you solve inventory loss? ›- Refresh or Re-Merchandise. The item itself may not always be the reason it's not selling. ...
- Discount the Items. ...
- Bundle Products. ...
- Enhance the Online Product Listing. ...
- Use Free Shipping. ...
- Remarketing. ...
- Offer Freebies. ...
- Donate.
- Be transparent. ...
- Explain. ...
- Set up notifications. ...
- Look at your supply chain. ...
- Borrow from yourself. ...
- Use alternate product recommendations. ...
- Sell now, ship later. ...
- Assess your marketing.
Create backorder and restock items
Sometimes the customer can wait until you restock items from the suppliers. If this is the case, you can create a backorder for the out-of-stock items, then purchase more from the suppliers to fulfill the order.
Apologize For The Inconvenience
We know how disappointing this news is, and we sincerely apologize for the inconvenience it has caused.” Pro tip: keep the apology succinct, and focus on moving forward by offering a refund, store credit, or links to similar products that are still available for purchase.
- Bundling products or services. Bundling products or services can increase sales. ...
- Discounting. ...
- Repackaging as an incentive. ...
- Remarket inventory. ...
- Donation for a tax write-off. ...
- Buy now, pay later. ...
- Selling online. ...
- Automation.