When a shopper visits your online store, they're often looking for a specific product to buy right away. But when you arrive you realize it's out of stock. By keeping your products in stock, you can take advantage of the people who visit your store for the moment. But if the product is constantly out of stock, it can cause a huge drop in potential sales, drive customers away and ultimately inhibit business growth.

Out of stock is almost always on the shop owner's "worst nightmare" list, and for some obvious reason. Not only does it lose its orders, but out of stock also results in lower customer satisfaction and loyalty. Buyers often feel disappointed when they receive an answer that is out of stock, and we know that as a store owner, what you don't want most is disappointing the customer. In this article, I will show you What is a stockout and How stockouts can hurt your business? Let’s check out now.

1. What is a stockout?

Stockout is a situation in which there are no goods of a particular kind of products available for sale. For online stores, having stockout can cause a lot of frustration for customers, especially when customers don't know when a product is available for purchase.

2. How a stockout affects your business?

Stockout can significantly affect the customer experience and they have a powerful impact on your business.

Losing customers to competitors.

Think about the amount of time and effort you spend getting your customers to notice your online store. If you run out of stock, not only will you see a drop in conversions and you could lose customers to an existing competitor. And that customer will hardly return to your online store in the future. 91% of customers are not willing to interact with an online store that has a bad experience.

See more: 10 Essential Tips for Effective Inventory Management to avoid losing customers

Paying for a canceled order

This happens when a customer pays for a product that runs out before they try to buy it. This situation only happens when the store owner's inventory is poorly managed and the inventory quantity is incorrect. If this happens, you must contact the customer to cancel the item and request a refund. Not only does the cost of canceled orders increase, it also provides an unsatisfying experience.

Bad reviews

Customer reviews are likely to drive a lot of revenue for you. For bad reviews, however, can disrupt your business. If customers regularly find your product out of stock, they may have negative reviews on your store or third parties. When potential customers see these reviews, they may be suspicious and assume you are an unreliable supplier.

In general, stockout is something that any store owner wouldn't want to happen. So, what causes stockouts? And how to avoid them? Let's move into the next part.

3. What causes stockouts? And How to avoid them?

Data is not correct

It's easy to go wrong with inventory management. From delivery errors, misplaced products, returns, and stolen merchandise, store owners often find that the inventory numbers they have on paper do not match what they have in reality.

Such deviation can lead to shop owners mistakenly believe that they have an item in stock when it is actually out of stock, so they will order the product or the quantity is not right. This could lead to out of stock if not controlled in time.

It's best to use sales management software that automatically adjusts inventory levels each time a sale is made, so you won't have to worry about updating data manually. This solution is also very helpful if you have multiple branches, as it allows you to manage multiple stores from one place.

Not imports products in the time

The product sells faster than you can add more stock, and as a result, you run out of products in demand. How can you stop it?

Find out when the time is out of stock

Try to identify out-of-store trends in your store. A P&G study found that out of stock "tends to form graphs like a day of the week", and store owners can find them by regularly auditing inventory and noting the date and time. time of the week when they frequently run out of stock. With this data, you can schedule the correct import of products on time to ensure that they are not out of stock.

Forecast demand

Product demand forecast, from which you can determine when to import more goods. However, manual demand forecasting can be time-consuming and sometimes mistake occurs due to human error. Therefore, you should use software that can analyze the data for you. If you own an e-commerce Magento store, you need an extension that features inventory management and reports to let you know which products are selling best or to notify when inventory is running low.

How to deal with these problems?

It’s time to invest in inventory management. What is the best inventory management extensions for Magento store?

You can refer Avanced Inventory Management Extension. This powerful extension allows you to manage your store easily. Not only one, but chains of stores.

With the powerful admin dashboard it's simple to control, add new stores, and save and review products and quantities in store. In particular, Admin can easily turn on / off store listings in the backend, sort reports of each store and order of stores based on status and filter schedule.

Besides, Magento Inventory Extension integrates with Store Locator Extension, which can help customers easily find their favorite store that is closest to them.

You can try the DEMO here whether if it meets your requirements.

Conclusion

We hope that this article of What is a stockout and How stockouts can hurt your business? has brought to you much essential information.

If you are looking for Magento Custom Services, feel free to share your project with our support team. And if you have any questions about our article or Magento extension and Magento themes, leave comments in the section below, we are willing to answer all of your questions ASAP.

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