How do you prioritize which products to restock first when facing multiple stockout situations?

2 Profit Margins

While high-demand items are important, you should also consider the profit margins of the products facing stockouts. Prioritize restocking items with higher profit margins, as these contribute more to your bottom line. This doesn't mean you should ignore lower-margin items, but balancing the restock based on profitability can help optimize your financial outcomes. Keep in mind that sometimes a strategic decision to restock a lower-margin item can drive additional sales of higher-margin products.

3 Supplier Reliability

The reliability of your suppliers plays a significant role in restocking decisions. Prioritize products that you can restock quickly and reliably. If certain suppliers have longer lead times or have proven to be unreliable, you may want to consider alternative products or suppliers that can fulfill your restocking needs more efficiently. Building strong relationships with dependable suppliers can help mitigate stockout situations and ensure a steady supply of products.

4 Inventory Costs

Inventory costs are another critical factor to consider. Products that have high holding costs, such as those requiring special storage conditions or with short shelf lives, should be restocked carefully to avoid excess inventory and wastage. On the other hand, products with low holding costs and long shelf lives can be restocked more liberally, as they pose less financial risk if they don't sell immediately.

5 Customer Feedback

Listening to your customers can provide invaluable insights into which products to restock first. Pay attention to customer feedback, requests, and complaints regarding stockouts. Products that customers frequently ask for or express disappointment about when unavailable should be high on your restocking agenda. This customer-centric approach not only improves customer satisfaction but also fosters loyalty and repeat business.

6 Sales Impact

Finally, assess the broader impact on sales when prioritizing restocks. Some products may drive additional purchases or are often bought together with other items. Restocking these products can have a multiplier effect on your sales. Conversely, if a stockout is unlikely to affect other sales, it may be lower priority. Consider the overall sales ecosystem of your retail business when making restocking decisions to maximize sales opportunities.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?