Stockout

A stockout in e-commerce refers to when a product is temporarily out of stock and unavailable for customers. This is common for any retailer, though stockouts can be disruptive for e-commerce businesses that depend on an always-available online storefront.

Stockouts represent a real threat to e-commerce businesses, particularly for high-demand products.

Stockouts can happen for various reasons, such as:

• Insufficient inventory

If a retailer or e-commerce business does not maintain adequate inventory levels to meet customer demand, stockouts can occur. This can happen due to inaccurate inventory management, supply chain disruptions, restocking delays, or unexpected demand spikes.

• Popular or seasonal items

Certain products may experience high demand, especially during specific seasons, holidays, or promotional periods. If the order exceeds the available supply, stockouts can occur as the retailer may struggle to keep up with the increased demand.

• Manufacturing or supplier issues

Stockouts can be caused by manufacturing delays, production issues, or problems within the supply chain. If the manufacturer or supplier cannot deliver the required quantity of products on time, it can result in stockouts for the retailer.

• Forecasting errors

Inaccurate demand forecasting can lead to stockouts. If a retailer underestimates the demand for a particular product and fails to stock sufficient inventory, customers may encounter stockouts when attempting to purchase.

• Unexpected events

Unforeseen events such as natural disasters, strikes, or other disruptions can impact the supply chain and lead to stockouts. These events can interrupt the production or transportation of goods, causing delays or shortages.

The key is to be transparent, make it easy for customers to take necessary actions, minimize purchase friction, and speed up your response when stockouts occur. Here are some ways to handle stockouts in your e-commerce store:

• Notify customers

Be transparent and inform customers that a product is out of stock as soon as possible. Update product pages and send notification emails.

• Offer waitlist option

Customers can join a waitlist to be notified when the product is back in stock. This reduces abandonment.

• Suggest substitutes

Identify and offer similar alternative products that customers may be interested in while the desired option is unavailable.

• Reduce purchase friction

Make it easy for customers to join the waitlist or purchase a substitute with one-click buttons directly on the out-of-stock product pages.

• Improve inventory management

Use tools to automate re-ordering, set optimal stocking levels, and minimize forecasting errors to reduce stockouts in the future.

• Delay orders

For pending orders of out-of-stock products, customers can delay fulfillment until the product is back in stock versus canceling entirely.

• Speed re-stocking

Prioritize restocking out-of-stock products and communicate new availability to waitlisted customers as quickly as possible.

• Analyze causes

Analyze the root causes of significant stockouts to identify process improvements to minimize recurrence. This may involve supply chain or supplier changes.

• Avoid automatic substitutions

Do not automatically substitute out-of-stock products without customer consent. This may result in returns and dissatisfaction.

• Thank customers

Communicate appreciation to customers who were patient during a stockout period. This could be through emails, post-purchase surveys, or loyalty programs.