How to get rid of Stockouts & How to prevent them
To all Post-Corona retailers out there, this blog will be dedicated to shop owners and how we can help them do a better job.
We’ve dedicated this text to stockouts and how to get rid of them.
What is a stockout?
Stockout is the moment when your customers come to your shop they want to buy, but your item is sold out.
So they leave. That’s what defines a stock out.
It’s kind of hard to spot stockouts in all the items you’re selling.
We’re going to show you on this graph bellow how it looks like. You see that you have a chart showing your sales, then they suddenly stop.
And then they start again, and the middle part where you don’t sell: well, that’ a stockout.
Stockouts have a double negative effect on your business.
First of all, you lose sales, customers come to your shop, they want to buy, but you do not have the stock to sell.
The other negative effect is they also lose trust in your brand altogether.
Once they remember you do not have goods available, they just never might have to come back.
There is no such thing as positive stockouts.
They harm your business and you want to get rid of them as soon as possible.
So how to get rid of stockouts?
You have to look at your past sales and see those moments we’ve identified before to understand where your stockouts happen.
And the second part is you have to predict the way in advance.
You have to know when they’re coming because the only way to get rid of stockouts is to replenish in time.
You have to know when to buy and watch to buy.
And for that, sales forecasting is an essential part.
You want to take a look at your past sales data and use algorithms for sales forecasting to understand how much you’re going to sell in the future.
Now, we highly recommend you use our software Inventoro for that.
So once again:
- Forecast your sales
- Identify the moments when a stockout is possible
- Replenish in time.
One of the great things about sales forecasting with inventoro is that we forecast sales based on historical sales data. Not only from the perspective of actual sales that happened but also from the perspective of hypothetical sales, which did not happen due to stock-outs. We identify stockouts in the past, but we forecast full inventory in the future.