Overselling, or overbooking, is a great indicator of your product's demand. More demand is great, until your supply can't keep up - and your customers go elsewhere to continue shopping.
Overselling becomes a bigger risk when you're a scaling business selling across multiple channels and marketplaces, while managing turnaround times, reorder points, refunds and exchanges...the list goes on. We've laid out two (non-exhaustive) levels of managing higher demand volumes below:
Level 1: Basic
- Monitor low stock items
Strict control points for stock checks and inventory replenishments are obvious, and practices like FIFO ensure you don't have ineligible stock. Analyse trends on products that constantly run low to inform your restocking volumes (or guide your product innovation).
- Maintain safety stock
Practice keeping a dynamic safety stock (especially for high-value items - don't want those sales to grow cold). There are a ton of methods out there to calculate just how much stock to keep, but the variables typically involve lead times, order volumes, and your own SLA with your customers.
For example, the safety stock you need per day could be calculated by multiplying the standard deviation of your lead time by the average daily order volume
OR it could be the difference between busy periods (i.e. max order volume multiplied by max lead time) and normal periods (i.e. average order volume multiplied by average lead time)
- Distribute stock across sales channels
If you're selling on multiple channels (e.g. webstore, retail), be sure that your available stock is synchronised across all platforms. Alternatively, you can allocate fixed stock across different platforms, but this has the downside of potentially missing sales when one of your sales channels is depleted.
If this sounds complicated, read on to find out how you can bring together inventory management, order processing, insights, and set prices - all from one view!
Level 2: Advanced
- Invest in an inventory management softwareInstead of running through and managing all the manual steps above, you could consider investing and leveraging softwares that can automate many of these processes that prevent overselling. Services like SelluSeller can do all of the above and more, providing analytical insights, 3PL and POS integration, product information management, e-commerce support, accounting tools and much more.
- Invest in RMAs that address exchanges (like PostCo 360!)Managing your sales cycle from sourcing to closing can be tiring, and the last thing you want to get is to oversell because of customer exchange requests. Here's how PostCo 360's automated and customisable platform saves you from post-purchase nightmares:
• Platform designed to incentivise variant exchanges
• Fully configurable safety stock feature to prevent overselling
• Automatic tag-based qualification of returns / exchanges
We also offer additional features like in-store exchanges to drive customer loyalty, and immediate access to PostCo's physical locations for customer convenience.
Make overselling a thing of the past. Try PostCo 360 today for free!