What Is a Stockout and Why Does It Cost You More Than a Missed Sale?
A stockout is what happens when available inventory reaches zero while customers still want to buy. The order cannot be fulfilled, the product page goes dark, and the customer goes elsewhere often for good. That single event costs more than the immediate lost sale. According to a 2023 analysis by IHL Group, inventory distortion of […]
What Is Inventory Turnover Ratio and What Does Your Number Tell You?
Your inventory turnover ratio is one number that tells you whether your inventory is working for your business or quietly working against it. A high ratio means product is moving; you are selling through stock quickly, freeing up cash and keeping storage costs low. A ratio that is too low means capital is sitting in […]
What Is Safety Stock? Definition, Formula and How to Calculate It
Safety stock, also called buffer stock or reserve stock, is the extra inventory an ecommerce brand holds above its expected demand to protect against two things: unexpected spikes in sales and unexpected delays from suppliers. When demand outpaces your forecast or a supplier ships late, safety stock is the buffer that keeps you fulfilling orders […]
What Is Dead Stock? Definition, Causes and How to Prevent It
Dead stock is inventory that has not been sold and is unlikely to sell merchandise sitting in your warehouse generating storage costs, locking up working capital, and occupying space that could hold faster moving, more profitable products. In ecommerce operations it is also called dead inventory, obsolete inventory, or excess stock, and it sits at […]
The Real Cost of a Backorder and How to Control It
Every ecommerce seller faces it eventually. A product sells faster than expected, the warehouse count hits zero, and orders are still coming in. What is a backorder, exactly, and does it mean you’ve lost those sales? The honest answer is no but only if you handle it right. A backorder is a confirmed customer order […]