As any company that sells product already knows, it is very costly to run out of stock on inventory. Yet the typical distributor loses between 4% and 10% of their annual revenues in lost sales due to out of stocks based on Thrive's research with hundreds of distributors.
In our analysis of why out of stocks occur, we have identified eight primary causes.
Here are the top eight reasons why wholesale and master distributors run out of stock of inventory:
1. Replenishment Purchase Made Too Late
2. Large Unexpected Sale Wiped You Out
3. Undetected Increases in Demand
4. Item Sales Pattern is Lumpy & Insufficient Safety Stock is Held
5. Insufficient Buys for Strong Seasonal Pattern
6. Insufficient Buys for Promotions
7. Late or Short Shipment from Vendor
8. New Items Selling More Than Expected
If you have experienced any of these out of stock scenarios, I'm sure you know how frustrating they can be. Although it may seem impossible to eliminate out of stocks, Thrive Technologies' inventory software provides proactive tools to help you detect when it is going to happen and to actually prevent it from happening. Thrive's software does this without having to overstock your warehouses. Using these tools to prevent stockout situations not only increases sales, but also improves customer loyalty and increases repeat business.
To learn more about how Thrive Technologies software can reduce your company's stockouts, please read our How to Prevent Stockouts with Thrive Technologies blog or schedule a free demo.