The worst nightmare of eCommerce stores, perhaps the thing they most dread preventing. Yes, you guessed it right, it's being out of stock! 😨 Did you know retailers lose nearly $1 trillion in sales annually because of stockout. 💸 When you don't have enough inventory, you can't make sales. Therefore, preventing stock issues constitute the main task for Shopify stores. That’s why monitoring, handling, and examining inventory are important parts of Shopify stores’ daily routine. Accordingly, eCommerce owners seek ways to better manage out of stock situations. In this article, you'll discover how. But first, let's begin with definitions, as always.

What is Out of Stock for Shopify Stores?

Out of stock, also known as stockout, refers to products that are unavailable to buy in a store because they have all been sold or there is not enough stock for that specific product. It can occur when a customer orders a product exceeding the inventory on hand. Stockout typically occur due to inaccurate demand forecasting and poor evaluation of the store’s data and analytics unless there are unexpected factors like COVID-19. If there's less inventory in the warehouse than the customer demands 🛍️, or if there's an issue within the supply chain 🚚, an out of stock situation becomes inevitable.

Shopify store can loose sales due to a stockout since customers are more likely to look elsewhere for the necessary items. This can have a negative impact on long-term revenue and customer relations. Let’s dig deeper and categorize the reasons behind a stockout further.

What Causes Out of Stock for Shopify Stores?

There are actually multiple reasons behind stockout, such as supply chain and demand issues. First, let's explore these factors together to better understand how to effectively manage stockout.

📈 High Demand

Stockout can occur when customer demand exceeds available inventory, especially during peak seasons or promotions. During seasonal sales events like Black Friday or product launches, Shopify stores may experience a surge in customer orders, quickly depleting available inventory.

📌 A better way to manage seasonal demand and make realistic plans accordingly is making seasonal demand forecasting.

📉 Inaccurate Demand Forecasting

There are several ways and various algorithms to make an accurate forecasting for your Shopify store. However, using Excel spreadsheet is not one of them. ⚠️  Due to its limitations in data analysis and scalability, it may lead you to make unrealistic plans and experience stock issues that do not align with reality.

🚚 Supply Chain Disruptions

Delays in the supply chain, such as transportation issues, production delays, or supplier shortages, can result in stockout. Shopify stores relying on international suppliers may encounter delays in shipping or production due to factors like customs delays or raw material shortages, leading to stockout. For example, COVID-19 reduces factory capacity in Asia, making shipping and logistics more expensive.

📦 Inventory Mismanagement

Errors in inventory management, such as miscounted or misplaced items, can lead to an imbalance between available stock and customer demand. These errors are often encountered by growing Shopify companies relying on Excel for inventory management. Additionally, errors in Shopify's inventory tracking can lead to inconsistencies between displayed stock levels and actual inventory on hand, resulting in stockout when orders are placed.

🛍️ Sudden Surges in Demand

Some demand fluctuations cannot be guessed, right? A demand spike in a particular product, often due to external factors like viral trends or influencer endorsements, can lead to out of stock. When a Shopify store's product is featured in a viral social media post or mentioned by a popular influencer, it may experience an unexpected increase in demand that exceeds available inventory.

Constantly having products out of stock can be stressful and difficult to manage. It can cause sales loss, drive customers away, and ultimately threaten business growth. 📉

Some Shopify businesses even considers hiding / temporarily disappearing their products as a solution. But is it really?

Is Hiding Out of Stock Products a Solution?

No, it is not. 👎 Your Shopify store will suffer from this unhelpful practice, here is why:

When you discontinue products, it's best to push them down in your catalog and hide them from catalog pages. However, it's important not to take the product page offline. This is because each product has its own URL, and removing it could lead to complete removal from Google. 🚫

So why keep the product page active? The answer is simple: to ensure potential customers can still find your store. 🛍️

While the discontinued product won't be sold anymore, there might be substitutes or alternatives available. But if customers can't find the discontinued product initially, they won't be presented with any alternatives. 🔄

Well, but what could be the real solution for out of stock issues! Accepting backorders! 💫

Backorder when Out-of-Stock?

Shopify defines backorder when a product is not currently in stock, but will be in the future. According to Fabrikatör, backorder is simply when a business owner takes orders for products that are currently not in stock. 🔄 In this way, customers can order the products they desire when they need them smoothly and the store doesn’t lose profit. 💸 In short, backorders constitute the perfect solution for the most challenging eCommerce inventory issue.

Let's imagine a scenario to understand the benefits of backorders more easily. Let’s say your best-selling product 👗 in your Shopify store, which you typically sell for $20 each, is out of stock.  When potential customers visit your store’s page, they see the "out of stock" message. ☹️ What do they do? They probably decide to buy the product from another seller.🚶‍♀️Your profit? Zero dollars. Now, let's go back to the minute your store is out of stock but this time, you decide to accept backorders. ✨ Customers visits your online store and see that they can still purchase the product, but with a later delivery date. 🤔  If 5 customers come by, and 2 choose not to wait, 3 of them decide to make the purchase. 🛍️In this scenario, your profit is $60! 💰 So much better than zero. See how efficient backorders can be?

📌 For more comprehensive backorder information, read Ultimate Guide: Backorder & Preorders. Do you need ready to use Klaviyo Templates, click here to reach them.

How Good are Back-in-Stock Shopify Apps?

Increasing the conversion rate is challenging, especially in a market saturated with similar services. Back-in-stock apps often have low conversion rates because they require customers to leave their email and wait for notification. A better approach is to sell them backordered items immediately, clearly communicating the estimated arrival date. 📈

To enhance conversion rates, businesses can offer alternatives that meet customers' needs. For example, instead of a discontinued cleaning product, they can suggest a similar one. Similarly, for books, offering other titles by the same author or on the same theme can capture customer interest. It's essential to be imaginative and inventive in offering alternatives to maintain customer engagement. ✨🛍️

It seems like what you're looking for is an inventory management app that includes backorders and advanced features to support your entire inventory process. What app is it? Of course Fabrikatör!

Turn Stockout into Revenue with Fabrikatör!

Out of stocks may be inevitable for your Shopify store but we got you covered. 🤝 Keep earning revenue and let your customers buy their favorite products whenever they want! 🛍️

With Fabrikatör, you can achieve so much more:

• Automate various inventory management tasks, including calculating reorder points, inventory costs, and more using efficient formulas. 🤖
• Save time by restocking inventory on time or creating purchase orders in seconds. ⏱️
• Monitor inventory, reach valuable insights, and create custom reports directly from the dashboard. 📊
• Streamline inventory planning and control by effortlessly managing purchasing, demand forecasting, freight, and order management. 🚚
• Handle your supply chain operations efficiently by integrating your Shopify store with ShipHero, Klaviyo, and many more. 🛠️

Would you like to witness firsthand the efficiency, profitability, and simplicity that an inventory management app can bring to your business? Our experts are ready to provide you with more information.

Do you need a 5/5-rated Shopify inventory assistant for your store? See Fabrikatör in action now! ✨

‍