Deadstock or Stockout? How Your Inventory Policy Can Help You Tackle Both

Let’s talk inventory. Specifically, two big problems that can ruin your business: deadstock and stockouts.

Sounds like a nightmare, right? But don’t worry. The key to surviving both of these horrors is having a solid inventory policy in place.

If you’re managing stock the right way, you can avoid these pitfalls and keep your business thriving. Ready to learn how?

What’s the Deal with Deadstock and Stockouts?

First things first, let’s break it down.

Deadstock is the stuff that’s just… there. It’s unsellable, outdated, expired, or out of season, taking up valuable space and draining your cash. You can’t sell it, you can’t give it away, and it’s just sitting there doing absolutely nothing except losing you money.

Stockout? The complete opposite. It’s when you run out of what your customers want. Customers come knocking, but there’s no product to sell. That’s like hosting a party with no snacks. Cue the disappointed guests (aka lost sales and angry customers).

Deadstock: The Silent Money-Sucker

Deadstock is sneaky. You think you’re prepared, but before you know it, you’ve got shelves full of products that no one wants, and your capital is tied up in things that’ll never turn a profit. Ouch.

It’s not just about paying for storage, either. Deadstock ties up your cash flow, and let’s be real… Money sitting around not doing anything is the worst kind of money. And the longer it sits there, the more waste you’re dealing with. A product that’s expired? Yep, that’s just trash now. Bye-bye.

Stockouts: The Missed Opportunity

Now, let’s flip the script. A stockout might sound less scary than deadstock, but it’s actually just as damaging. When you’re out of stock, you’re losing sales, plain and simple. A customer visits your site, finds the item they want, and -bam- it’s out of stock. Guess what they’re doing next? Hitting up your competition.

And don’t forget the brand damage. A company that’s constantly running out of stock isn’t exactly earning a reputation for reliability. That means customers are less likely to return next time, and your brand loyalty goes straight down the drain.

How Your Inventory Policy Can Solve Both Problems

So, how do you dodge the deadstock/stockout double-whammy? It starts with having the right inventory policy. Here’s how you can create one that’ll keep your products moving, while avoiding both deadstock and stockouts:

• Demand Forecasting: Use AI and machine learning to predict what will sell and when. No more wild guesses. With historical data and predictive tools, you can stock exactly what you need—no more, no less.
• Just-in-Time (JIT): The idea is simple: Get your products just when you need them. That means you’re not sitting on inventory that’ll sit around and turn into deadstock. It’s about being lean, mean, and efficient.
• Safety Stock: You don’t want to run out of products, so a little buffer is good. But don’t go overboard. The goal is to balance having enough stock without overdoing it.
• FIFO (First In, First Out): Use this technique to make sure the older products sell first, preventing your inventory from getting stale and unsellable.
• Automation & Real-Time Tracking: Stay on top of your inventory at all times. With real-time data, you’ll know exactly what’s moving and what’s not. No more guessing games.

Striking the Balance

Here’s the secret: You don’t want to be the business that has too much stock, nor do you want to be the one with too little. It’s all about balance. Your goal? Keep just enough inventory on hand to meet demand without running the risk of getting stuck with unsellable goods or turning away paying customers.

So, stop living in fear of deadstock or stockouts. Instead, be proactive. Use the tools at your disposal: Smart forecasting, efficient management, and tech-driven solutions, to keep your inventory on point.

Wrap It Up

Managing inventory doesn’t have to be a horror show. By putting a solid inventory policy in place and using smart strategies, you can avoid the chaos of both deadstock and stockouts.

If you want to take it a step further and truly optimize your inventory management, EverX has your back. With our AI-powered agents, we help small CPG brands forecast demand accurately, manage stock levels in real-time, and keep inventory flowing smoothly – less deadstock, less stockouts.

Let EverX help you keep your business running like a well-oiled machine, so you can focus on what really matters: Growth.