Overstock and stockout

Overstock and stockout

A streamlined inventory that does not succumb to stockouts is the optimal state for most retail businesses. Cin7 ForesightAI gives you the data to achieve this state over time by making wise replenishment decisions.

Prerequisites

  • This is a Cin7 ForesightAI report and requires an add-on to your subscription.

  • ForesightAI reports require at least 3 months of sales history in Cin7 Core.

Overstock

A small inventory means less warehouse space is needed. Whether owned or rented, there is a capital expenditure with no direct effect on profit, purely overhead. More importantly, less inventory means less cash needs to be available to buy and hold the goods in the inventory. A business with $4 million turnover typically has $1 million of products in stock just waiting for customers to buy them.

Cin7 Foresight AI can over time steadily reduce your inventory size without impacting your ability to meet sales demand by making wise replenishment and stock decisions.

Stockout

A stockout or out of stock situation occurs when you don’t have the right inventory level and their customers can’t buy what they want. There are several reasons stockouts occur, such as:

  • You ordered the wrong products

  • You did not order enough products

  • Customer demand was higher than expected

  • Supplier failed to deliver, or delivered with a significant delay

When customers can't buy what they want, this not only causes you to lose money in the form of lost sales, but leaves customers unsatisfied enough to look elsewhere or share their negative experience with others. In a typical small or medium-sized retail business, 8% of lost sales occur due to stockouts.

Replenishment for inventory health

Smart replenishment is essential to keeping your inventory at that optimal level where you avoid both overstock and stockouts. The optimal reorder schedule orders from your suppliers with just enough time to bring items back into stock before your on hand stock hits zero. With thousands of SKUs, multiple locations, seasonal product demand, and more, this can be difficult to plan perfectly.

Cin7 Foresight AI uses your past sales history and its own AI calculations to predict what you should reorder and when. Use smart reorder suggestions to keep your bestsellers maximally available while reducing your stocks of SKUs that don't sell. Learn more with Smart reorder suggestions.

See inventory health in Cin7 Core

See your inventory health at a glance from your Dashboard.

The Over/under stock dashboard widget displays the current number of SKUs in stockout, overstock, and healthy states in each location.

The Inventory health dashboard widget displays stockout and overstock percentage, plus the amount of revenue lost to stockouts via lost sales.

You can also check out the Stockout Report and Overstock Report, where you can see a detailed breakdown of your SKUs in each location and from each supplier.

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