9 Ways to Deal with Out-of-Stock Inventory (2024)

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.

1. Be transparent. One of the most important things a retailer can do to mitigate frustration and ease confusion is to be clear and honest with information. This includes displaying the OOS message clearly and if you can, allowing a visitor to filter or sort a page by stock level. Displaying the status of stock by noting it is “running low” or that you only have a certain quantity on hand can also be beneficial.
2. Explain. Try to explain why you are in a short stock position if it’s for reasons beyond your control. This way you mitigate the erosion of brand loyalty while fostering an honest relationship with consumers. Give insights to when the customer can expect a product to return.
3. Set up notifications. Alert a customer when an item comes back in stock. This can be done through email enrollment for back-in-stock notifications. If your website doesn’t already have this feature, there are many add-on solutions available in the market.
4. Look at your supply chain. Evaluate your supply chain to see if there are any spare parts or returned inventory available that can be modified for sale. These can be put into the production line for improvement or sold as “pre-loved” goods.
5. Borrow from yourself. If you have more than one sales channel, you can consider sharing alternate channel inventory. This is especially useful for brands with a strong retail presence. In the case of store closures, if you haven’t already done so, try transferring inventory to your eCommerce fulfillment location to fill that channel’s demand.
6. Use alternate product recommendations. Cross-merchandise with alternative like-products. You might even find you’re able to capture a larger cart value by showcasing varying products that can meet the same demand.
7. Sell now, ship later. While sometimes less favored due to logistical or systematic challenges, another option is to allow for pre-order or pre-sale. Just be sure to clearly depict the timeline, otherwise this can lead to customer frustration. Instead of an “in stock date”, consider communicating an expected delivery week based on your receipts.
8. Assess your marketing. Visual merchandising can be used as a tool to offset confusion and disappointment from OOS when you don’t want pent up demand. If you know you’ll be facing a long window without inventory, make sure the product is not featured heavily on your website or marketing assets. Consider displaying it elsewhere on the bottom of a page or list.
9. Ask your suppliers for help. Suppliers may be able and willing to prioritize parts of your POs so that they can fulfill OOS goods earlier than others. Though keep in mind any risks this may put on other receipts.

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.