What are stockouts?
A stockout is when a store runs out of inventory of a particular product that a customer wants to buy. Doesn’t sound dramatic on paper, but the ripple effects? That’s the killer.
Beyond the obvious lost sales, stockouts damage your brand reputation, hurt your search rankings (especially on marketplaces like Amazon), and create a cascade of operational headaches. Your customer service team fields angry emails. Your marketing team scrambles to pause ads for out-of-stock products. Your suppliers get panicked calls for rush orders at premium prices.
The hidden cost that really stings? Customer lifetime value. When someone can't find what they want from you, they don't just buy it somewhere else once. They often shift their buying habits permanently.
Common causes of stock outs
Stockouts can be caused by a variety of factors throughout the distribution and sales process, including:
Poor demand forecasting
The problem: You're flying blind. Most businesses base their ordering on gut feeling or simple averages from last month. But customer demand isn't linear, and yesterday's sales patterns don't predict tomorrow's spikes.
The fix: Build forecasting that actually accounts for seasonality, trends, and external factors. Look at your data over longer periods – at least 12 months if you have it. Factor in marketing campaigns, seasonal events, and even competitor activities that might drive traffic your way.
The key is understanding your business's unique patterns. Maybe your sales always spike on Tuesdays. Maybe certain products sell together. These insights become your competitive advantage.
Not having accurate insights into these patterns can lead you to make poor purchasing decisions. This results in understocking popular products and/or overstocking slower moving items.
Supplier delays
The problem: There can be a whole host of supply chain delays during manufacturing and shipping that can throw off your restock schedule. Worst of all, it feels entirely out of your hands as you’re waiting on them.
The fix: Diversify your suppliers to give yourself a safety net. Having established relationships with multiple manufacturers means you have back-up options if one experiences delays. You can find quality suppliers through a directory like Syncio Marketplace.
Ineffective inventory management
The problem: Manually managing spreadsheets for your inventory is a recipe for disaster as human error is highly likely. Just a few miscalculations, incorrect inputs or forgotten orders here and there can completely throw off your stock levels and purchasing decisions.
The fix: Make your life easier by fully automating your inventory management system. With the right software, you can automate:
- low inventory alerts
- stock repurchases
- supplier and customer communications
- order fulfilment
- safety stock calculations
While it may take some time to establish an automated system that works for you, it’ll be far more efficient in the long run. Try a combination of apps like Prediko, Shopify Flow and LSA.
Lack of real-time visibility
The problem: Your inventory numbers are outdated by the time you see them. You think you have 50 units, but sales from multiple channels haven't synced yet, and you actually have 12.
The fix: Implement real-time inventory syncing across all your sales channels. Whether you're selling on expansion stores in different regions or platforms, marketplaces like Amazon and eBay, or retail partners or resellers websites, every sale should immediately update your central inventory count.
This is where an app like Syncio becomes a game-changer. Instead of manually updating inventory across platforms (and inevitably making mistakes), everything stays synchronized automatically. When you sell one unit anywhere, it's immediately reflected everywhere.
How to immediately handle stockouts
But none of that helps if you’re currently in a stock out frenzy. So, we’ve put together the steps you can take immediately to minimise loss and keep customers happy.
Coordinate rush restocks
Discuss with your suppliers ASAP about whether it’s possible to do rush restocks for in-demand products. Consider the manufacturing and shipping timeframe and additional cost involved vs the potential increase in customer satisfaction and sales. Weigh up whether it’s a viable option for your store.
Clear customer communication
Make it very clear on your website if a product is not available currently to avoid overselling.
If you have a confirmed restock date, add that to the product listing. Add a button asking customers if they’d like to join a waitlist and be notified when the item is back in stock.
Offer alternatives
In the meantime, provide customers with alternative options of similar products they could purchase instead. Add these under the original product listing as ‘items you may also like’/’similar products’. This empowers the customer to make their own choice if they don’t have time to wait for restocks.
How to prevent stock outs long-term
Understanding what factors lead to stock outs allows you to prevent them from occurring in the first place. This is the best option to protect your store’s reputation and margins. You can do this in a few simple steps:
Build safety stock buffers
Reserving a few items of particularly popular stock can save you in a pinch. There are a few methods for calculating how many items should be kept as a buffer. Here’s one formula:
(Maximum amount of forecasted sales x Maximum lead time for suppliers to deliver stock) – (Average amount of product sales x Average lead time)
You can implement this buffer easily with Syncio's Synced Stock Buffer feature. Just toggle it on in Product Settings → Variant tab, set your buffer amount, and it will automatically apply across all your synced products within 24 hours.
Use the 80/20 rule for inventory focus
If you predict customer demand early, you can ensure there’ll be enough stock for best-selling products. You don’t need a crystal ball for this step. Instead, take into account past sales data, industry and customer trends and seasonality when purchasing stock. You can also use apps like Prediko to automate this process.
Truth is, roughly 20% of your products likely drive 80% of your revenue (hello, Pareto Principle). These are your VIPs – the products that can never, ever be out of stock.
Identify these power players and give them special treatment: shorter reorder cycles, higher safety stock levels, and maybe even dedicated supplier relationships. For these products, prevention is mission-critical.
Invest in supplier diversification
Never let a single supplier hold your business hostage. For critical products, maintain relationships with at least two qualified suppliers, even if you primarily order from one.
This doesn't mean splitting every order. It means having backup options that you've already vetted, tested, and established relationships with. When your primary supplier hits a snag, you can pivot quickly instead of scrambling to find alternatives.
One way to build more diverse networks is by connecting with like-minded brands and suppliers on Syncio Marketplace.
Automate every aspect of your inventory
The stores that never seem to run out of stock aren't just lucky. They've automated the hell out of their inventory management.
In our experience working with thousands of e-commerce businesses, there are three non-negotiable pillars to building a bulletproof inventory strategy:
- Master your demand patterns: Use AI tools like ChatGPT or Google's Notebook LM to analyze historical sales data and spot trends you'd miss manually. Don't just forecast demand – forecast uncertainty and adjust safety stock accordingly.
- Sync inventory in real-time: If you're selling across multiple channels, tools like Syncio eliminate the nightmare of overselling while letting you run leaner inventory. Sell one unit anywhere, it's reflected everywhere instantly.
- Automate supplier communications: Use Shopify Flow to automatically generate purchase orders when stock hits reorder points, send alerts when shipments are delayed, and track supplier performance. Eliminate human delay from your supply chain.
Low stock alerts
Stay one step ahead of dangerously low stock. Use apps like Shopify flow or LSA to be automatically alerted when inventory falls below a set level.
The bottom line on stockout prevention
Stockouts are expensive, but they're not inevitable. The key is thinking systematically.
It's not enough to just order more inventory when you run low. You need to implement reliable forecasting that predicts demand, systems that automate reordering, suppliers who communicate proactively, and partnerships that provide backup options.
Most importantly, you need to start now. The best prevention strategies take time to implement and tune. But every day you wait is another day you're vulnerable to the next stockout that could send customers to your competitors for good.
Start with the basics – accurate forecasting and real-time inventory visibility – then layer on automation and partnerships as you grow. Your future self (and your customers) will thank you.
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