How Can Out-of-Stock Products Affect Your eCommerce Business?

Brijesh Panchal - February 17, 2021

In the eCommerce business, every move you make is likely to be aimed towards converting a visitor into a paying customer.

For instance, branding is about conversion. Marketing is about conversion. Even the product selection is also about conversion.

Let us ask you this: What if you’re converting successfully but don’t have the products in stock?

That would be the worst-case scenario for any eCommerce business.

You see, when products are out of stock in your eCommerce store, the cost of losing those sales isn’t the only loss.

You’re also making a negative impression and ruining the reputation of being a reliable company to purchase from.

In fact, a study conducted by IHL Group also revealed that the total value of lost revenue due to out-of-stock products accounted for nearly $1 Trillion in sales.

The point is, your eCommerce business can suffer a lot because of out-of-stock products.

Out-of-stock products can have a significant impact on your business. The key e commerce issues that it will face include losing a customer to a competitor, risking reputation, getting things back in stock quickly, and more.

3 Ways Out of Stock Products Affect your eCommerce Business

Here the top 3 ways out of stock products effects your eCommerce business.

1. You’ll Lose Customers to Competitors

Out-of-stock products are one of the main influencing factors of customer satisfaction.

In simple words, the experience of out-of-stock products can instantly cause frustration to the customers. Not only that, but it can also drive the majority of customers to a competitor’s store.

Research has also proven that around 91% of customers don’t engage with the same online store after having a bad experience with it.

And once customers start buying from a competitor, they almost never come back.

This, in turn, not only leads to financial difficulties but also creates additional costs for acquiring new customers to replace the lost ones.

2. Your Reputation Will Get Damaged

Every year, eCommerce businesses suffer an immense amount of losses because of out-of-stock products and disappointed customers.

According to research by US Small Business Association, poor inventory management is the number #1 reason why small businesses fail.

In fact, the same research also revealed that 46% of these small businesses don’t even use any sort of inventory management system.

As a result, it often leads to inventory shortages, resulting in empty shelves, lost customer loyalty, and damaged reputation.

Fortunately, forward-thinking companies from across the world have already realized the significance of a proper inventory management system. And the eCommerce businesses that use it are already avoiding or handling out-of-stock situations efficiently.

3. You’ll Have to Get Products Back in Stock Rapidly

Although, the best way to deal with out-of-stock products situation is to avoid it.

But what if you already have some out-of-stock products in your eCommerce store?

Well, when customers find a product is out-of-stock, they usually do any of the following 5 things:

They buy the same product from another store
They find a substitute for the out-of-stock product in your store
They substitute with a different product from another store
They don’t buy it all
Or they postponed the purchase until the out-of-stock product is back in your store

Now, as you can see that the majority of the above-mentioned points aren’t beneficial for eCommerce businesses.

There is, however, a hope that the customers will postpone their purchase until the item comes back in stock.

And it’s for this reason eCommerce businesses are often forced to use all channels possible to bring the products back in stock as quickly as possible.

In fact, if they don’t bring the products back in stock fast, it only results in abandoned purchases and lost customers.