What is the most common problem you encounter when managing your Shopify store? We bet it’s out of stock. 📦 In 2022, more than half of global e-shoppers reported being unable to purchase products due to out-of-stock products, according to Statista. Stockout is one of the most critical problems Shopify business owners worry about because it ends up losing revenue. 💵 That’s why there are many solutions created to prevent out-of-stock issues. In this article, we aim to talk about out-of-stock in detail, from what out-of-stock is and why you may be experiencing it to key strategies to prevent it. Let’s start!

What is Stockout?

According to the Cambridge Dictionary, out-of-stock refers to products that are out of stock and unavailable to buy in a store because they have all been sold. In other words, out-of-stock, aka stockout,  means insufficient inventory when there is demand for it. Here are some examples showing how out-of-stock happens:

• When a new product quickly becomes a bestseller ⭐, it may result in higher-than-expected sales and the inventory depleting faster than planned.
• Shipment delays occur with overseas supplies due to unforeseen events like natural disasters 🌊 or strikes that cause certain items to go out of stock.
• An online retailer may run out of holiday-themed decorations 🎄 because of an unexpected seasonal demand before the holiday season ends.
• During a campaign, an eCommerce store can experience out-of-stock due to high demand in orders for discounted items. 🛒
• A problem in the inventory management system results in inaccurate stock levels being monitored and causes the overselling of a popular product that is actually out of stock.
• Suppliers can experience a shortage of critical materials and struggle to deliver products to the eCommerce stores on time, which can cause out-of-stock. 🚚

Shopify stores face numerous stock issues daily, depending on their inventory management structures, the products they sell, and the size of their stores. So, what could be the underlying reasons for your out-of-stock situation? 🤔 Let's explore the main causes together.

Why Do You Run Out of Stock on Your Shopify Store?

Running out of stock when managing Shopify inventory can cost you revenue and cause unhappy customers, affecting your store’s image. Understanding the reasons behind stockout can help you find solutions to prevent it. Here are some common causes:

📦 Weaknesses in Inventory Management

Advanced inventory tracking and management are crucial for keeping the stock at the optimal level. Using outdated and inefficient inventory solutions can result in inaccuracy in stock levels, which can cause stock issues.

For example, using Excel spreadsheets to manage Shopify inventory may not be as efficient as you think. While manual data entry increases the chance of stock level errors in Excel, it cannot track and manage your inventory in real time, leading to discrepancies between actual and recorded stock levels. Automated inventory management systems, however, provide real-time updates, reduce human error, and ensure more accurate stock tracking, helping you avoid stockout and overstock issues.

📌 Do you want to learn why Excel is not the most efficient solution for your growing Shopify store? Read Excel Limitations in Inventory Management and From Excel to Fabrikatör: Transform Your eCommerce Inventory Management.

🚚 Lack of Supply Chain Management

Coordinating with suppliers, manufacturers, and distributors successfully is a must for effective supply chain management. When a problem occurs during the supply chain process, delays and disruptions can occur, leading to stockout. For example, if your supplier suddenly delays shipment due to production issues, your inventory can quickly be depleted.

🔮 Errors in Demand Forecasting

Demand forecasting requires carefully examining past data, market trends, and other factors to make inferences from it. Errors in demand forecasting, such as underestimating the popularity of a product, can result in insufficient stock levels. On the other hand, overestimating demand can lead to overstock issues like extra warehouse costs. For example, if you make a mistake when calculating the future demand for a popular product, you may be out of stock.

Now that we've understood the main reasons behind stockout issues, let's explore what needs to be done from the beginning to prevent it and ensure it doesn't occur.

Key Strategies to Prevent Stock Issues in Shopify

Automated Stock Tracking and Replenishment Systems

While manually tracking inventory and creating purchase orders individually is an option, it's not effective due to its time-consuming nature and susceptibility to errors. Instead, choosing a method where future stock predictions are automatically made and purchase orders can be quickly prepared and sent will be more beneficial to your business, preventing you from being out of stock.

Strong Supply Chain Management

Supply chain management is crucial for your processes because it significantly affects how quickly materials and products reach you. As you're well aware, customers in the eCommerce market don't like waiting. ☹️ Maintaining strong and clear communication is essential to avoid any problems with suppliers. Having a reliable contact who you can easily reach out to in case of any issues with stock levels is vital. If you're effectively managing this process and building good relationships, that's great, but another necessity is having alternative suppliers to turn to in case of unforeseen problems. Therefore, communicating with multiple suppliers is also crucial to prevent out-of-stock.

Data-Driven Demand Forecasting

Planning helps to show us the route we're going to take and what we should pay attention to along that route. Data-driven demand forecasting is one of those detailed plans created by considering past data and other effective conditions. It helps you sell with foresight, allowing you to order enough inventory without running out of stock. You can think of demand forecasting as your magic ball, ensuring that reality closely aligns with the forecasted amounts, thus preventing stock issues.

Real-Time Stock Information and Alerts

Imagine an assistant telling you: ‘’Hey! This is the favorite product of your customers, but you’re almost out of it. Create a purchase order quickly!’’ Wouldn’t it be helpful? We certainly think it would. You should be able to see real-time stock information and keep informed with alerts when managing inventory to prevent being out of stock on your Shopify store.

📌 How do you make an analysis to see which product is the star of your store? With ABC Analysis, you can better understand the popularity of your Shopify store’s products. Read ABC Analysis for eCommerce Inventory to learn more.

Using Inventory Management Software

Remember the assistant telling you you should create purchase orders; it can also automatically replenish stock, forecast future customer demand, analyze your products, and accordingly decrease the risk of being out of stock. Especially if your Shopify business is growing and you have a wide range of products like an online apparel store, you need an assistant more than anyone else. Shopify is integrated with many inventory management solutions you can benefit from to avoid stockout, but choosing the best for your business is critical. You need a Shopify app that not only prevents out-of-stock situations but also helps you manage stock-out issues with its essential features. How?

How to Manage Unexpected Out of Stock for Your Shopify Store?

A good inventory management solution minimizes the possibility of stockout, it is true. However, it also does something very important: it enables you to manage the process when you run out of stock. If you're wondering why it doesn't completely eliminate the possibility of out-of-stock, it's because predicting the future with 100% accuracy isn't possible. Let's remember that during the COVID-19 pandemic, many eCommerce stores ran out of stock due to unexpected spikes in demand. As unexpected events and global problems can cause sudden changes in demand, we believe an inventory management solution should be prepared for any situation. But how can you continue making sales and generating revenue when you're out of stock? The simple answer to that is by accepting backorders.

When you lack available stock, you can get a backorder for a good or service that cannot be filled immediately. How does backorder work? You accept backorders for products that are temporarily out of stock and once the items are replenished in your inventory, you fulfill the orders.  You can try it now for free!

To learn more about backorders, you can read Ultimate Guide: Backorder & Preorder and Backorder Benefits for Your eCommerce Store.

• When all is considered, which solution can minimize the likelihood of your store being out of stock and support your inventory management process with advanced features like backorders and more? Of course, it’s Fabrikatör. 🚀

Fabrikatör: Your Inventory Assistant! 🦸

Do you experience out-of-stock often? You don’t have to if you use the right solution for the problem: Fabrikatör. It has a 5/5 rating on Shopify, many advanced features, and backorder support! You can quickly cut off stockout issues with Fabrikatör. How?

1️⃣ With powerful analytics, Fabrikatör will tell you the most purchased product in your store and advise you to restock it, which you can manage in seconds.

2️⃣ It blends past data with algorithms and market conditions for a more successful demand forecast, enabling you to make more realistic plans and prevent stockout.

3️⃣ Fabrikatör will keep track of the stock and automate the replenishment process to save you time when avoiding out-of-stock.

4️⃣ You will be able to create purchase orders quickly.

5️⃣ You can manage out-of-stock better, accept backorders when you’re temporarily out of stock, and keep earning revenue.

To prevent being out of stock, you can trust Fabrikatör, your ultimate inventory hero! You can try all these features for free! Besides, our experts can give all the information and answer all your questions about Fabrikatör if you have 30 minutes.

See Fabrikatör in action now!

‍

‍