Your customer is in the market for a new winter coat. They've spotted one on your website, so they head to your store to try it on and buy it, but the product is unavailable, and your retail associates don't know when it'll be back in stock.
Will that customer wait for an unspecified restocking or start searching for alternatives? Most will choose the latter.
This scenario is likely playing out in your store right now. Perhaps you misjudged customer demand, or a supply chain bottleneck meant your latest shipment got stuck at customs. Regardless of the reason, your shoppers can't buy the items they want, so they leave empty-handed.
This guide shares why product availability issues happen, with tips to improve your inventory availability and prevent stockouts in your business.
What is product availability?
Product availability describes whether an item is in stock and available for purchase. It’s measured using inventory metrics such as stockout rate, inventory turnover ratio, and on-shelf availability.
Why is product availability important to customers?
Product availability is important because it impacts:
- Customer satisfaction. Customers expect to find the products they want, when they need them. When this isn’t an option, many will search elsewhere.
- Competitive advantage. Supply chain issues and miscalculated demand are common inventory challenges for retailers. Get them right, and customers will learn to trust that you’ll always have the product they want in stock, even if their preferred brand doesn’t.
- Operational efficiency. It’s not just too little stock that causes issues—too much can inflate inventory carrying costs and result in obsolete inventory. Accurate demand forecasting helps optimize these costs and hold the optimal amount of each product, while maintaining a consistent supply.
How to improve product availability
1. Conduct regular inventory audits
Regular inventory audits help verify that actual stock levels match the recorded quantities in your inventory management system (IMS). If you think you have 500 products, but you’ve only counted 450, for example, the product will become unavailable much sooner than anticipated.
If you do notice this type of inventory shrinkage, ask why. Internal theft, shoplifting, or return fraud could be to blame. You should address this problem to prevent loss from impacting future availability.
Technology helps improve inventory accuracy by eliminating the need for manual cycle counts. Barcodes and RFID tags hold information about your product. When scanned using a handheld device (either during a stock check or at the checkout desk), your inventory management system automatically updates product quantities.
💡Pro tip: Shopify lets you track inventory quantities by location, and unifies this data in a central operating system—so you’ll never oversell items that are out of stock.
2. Configure automated reordering
Time is of the essence when reordering inventory. Place a purchase order with your supplier too soon, and storage space or cash flow could be impacted. If you place it too late, the item could be temporarily unavailable.
Just-in-time (JIT) is an inventory management strategy that aims for the best of both worlds. Instead of having excess stock lying around for weeks, it defines an inventory reorder point to receive new products when required.
Inventory management tools like Stocky automate this process for you. You can determine the optimal inventory level for each product using past sales data, supplier lead times, and forecasted demand. Once quantities from your IMS drop below this figure, Stocky creates a draft purchase order with the appropriate vendor to ensure product availability.
3. Implement demand-based forecasting
Products can become unavailable when you underestimate how many units you’ll sell. Shopify’s demand forecasting tools leverage unified customer and inventory data for accurate predictions.
Shopify helps retailers optimize inventory levels and reduce the risk of stockouts or overstocking by analyzing sales trends, seasonality, and consumer behavior across all sales channels. Through stock management based on real-time data, you can respond to customer demand while keeping inventory costs under control.
An accurate demand plan also allows you to plan production more effectively. It reduces production delays that cause stockouts, while simultaneously avoiding overproduction that leads to inventory bloat.
4. Maintain strong supplier relationships
Your ability to maintain a continuous product supply hinges on your relationships with suppliers. When they feel valued, vendors might be more flexible with their supply, or offer solutions to challenges that threaten product availability.
Say that you miscalculated demand and have sold out of your denim jeans faster than expected. Your supplier has a two-week lead time on new inventory. A strong relationship with them allows you to negotiate a solution.
If the vendor only has 50 units available and their usual minimum order quantity (MOQ) is 200, for example, they might be open to lowering the usual threshold to prevent a complete stockout. The supplier might also prioritize your purchase order over less-valued resellers to speed up lead times.
5. Streamline returns logistics
Research shows that 16.5% of online sales result in returns. While they might seem like a hassle, an efficient returns management process helps you process, inspect, and restock products quickly. The faster this happens, the quicker products can be made available for resale.
Techniques to streamline the returns process include:
- Allowing customers to initiate their own returns through an online portal
- Using barcode and RFID scanners to update quantities in your IMS
- Allowing customers to return products to their nearest store—regardless of where they initially bought it
This presents the need for a unified platform that brings sales, order, and customer data together in one platform. Shopify, for example, unifies transactions wherever they take place. Retail associates can return a product that a customer originally purchased online, and refund them to the payment method they bought it with, using the POS system.
Challenges in maintaining availability
Supply chain disruptions
Shipping containers don’t have to get stuck in the Suez Canal to cause product availability issues. Suppliers might have a shortage of raw materials. Natural disasters may put a pause on production. Regulatory changes mean popular items now need to undertake more rigorous product testing before they can be sold. All of these challenges inflate lead times and could cause product availability issues.
Inaccurate demand forecasting
It’s difficult to tell what the future holds. For example, you might expect to sell 4,000 units on Black Friday, but a TikTok video goes viral. All of your inventory—including your safety stock—sells out within the first few hours, causing a stockout on the busiest shopping weekend of the retail calendar.
Supplier issues
Retailers are at the mercy of their suppliers when maintaining product availability. If a vendor suddenly increases their costs when your first contract expires, negotiation can take days. This impacts how long it takes to receive new inventory and ensure a continuous supply.
What to do when a product is unavailable
Instead of losing revenue when a customer walks away from a product that’s unavailable in-store, here’s what you can do instead:
- Show alternative sales channels. Just because an item is out of stock in one location, it doesn’t mean it’s completely unavailable. If you offer in-store pickup, display product availability on product pages to show customers whether items are available for collection at specific stores. Alternatively, use ship-to-customer on Shopify POS to take a customer’s order in-store and ship the product from a warehouse where there is inventory.
- Allow backorders. Allow customers to continue purchasing products even when they are out of stock. Just be clear that there will be a delay between paying for an order and receiving it. Manage this in the Shopify bulk editor by unchecking the “Continue selling when out of stock” option for your products. Any backorders are routed to your Orders tab to fulfill when they’re back in stock.
- Use a “back in stock” notification app. If customers don’t want to pay for a product they won’t receive immediately, use an app like Notify on your online store. It asks for a shopper’s email address and sends a notification when the unavailable item on their wishlist comes back in stock.
- Hide the product listing. If you prefer to hide products that are out of stock, do this through your inventory settings or by using an app from the Shopify App Store. You can customize this visibility by sales channel. For example, an item might be available online and in the Shop app but temporarily removed from your POS system.
Improve your inventory management with Shopify
Shopify’s unified data model makes it easy to manage stock availability, regardless of where you’re selling. It consolidates inventory data across all sales channels—online stores, physical retail locations, and third-party marketplaces. This centralization ensures real-time accuracy in stock levels, reducing the risk of overselling or stockouts.
Plus, when your inventory data is unified in a single backend, you can blend different channels to serve omnichannel customers. Retail associates can confidently say, “This product is unavailable in this store, but we have five in stock in a store that’s a 10-minute walk away—I can reserve that for you now. Or, we can place your order right now and ship it directly to your home.”
Stock availability FAQ
What is meant by product availability?
Product availability refers to whether a particular item is available for customers to buy. It ensures that supply meets demand and helps retailers meet customer expectations at the point of purchase.
How is product availability measured?
Product availability is measured using metrics such as order fill rate, inventory turnover, and backorders.
How do you ensure product availability?
To ensure product availability, follow these steps:
- Use an inventory management system.
- Conduct regular audits.
- Implement demand-based forecasting.
- Maintain strong supplier relationships.
- Configure automated reordering.
- Streamline the product returns process.
