{"id":1885,"date":"2022-05-16T15:37:00","date_gmt":"2022-05-16T15:37:00","guid":{"rendered":"https:\/\/www.shipbob.com\/au\/blog\/retail-replenishment\/"},"modified":"2025-09-24T00:13:56","modified_gmt":"2025-09-24T00:13:56","slug":"retail-replenishment","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/au\/blog\/retail-replenishment\/","title":{"rendered":"Store & Retail Replenishment: How to Avoid Common Problems"},"content":{"rendered":"\n

Table of Contents<\/p>

** Minutes<\/p><\/div><\/div>\n

What is retail replenishment?<\/a><\/p>\n\n\n\n

What makes retail replenishment so important?<\/a><\/p>\n\n\n\n

Strategies for inventory replenishment<\/a><\/p>\n\n\n\n

How store replenishment fits into the supply chain<\/a><\/p>\n\n\n\n

Retail replenishment FAQs<\/a><\/p>\n<\/div>\n\n\n\n

Retail replenishment is a little like juggling: it requires a lot of multitasking, a good deal of precision, and excellent timing.<\/p>\n\n\n\n

At first, retail replenishment can be frustrating \u2014 between forecasting demand<\/a>, calculating how much stock to reorder, timing your purchase, and determining product allocation<\/a> across channels and different locations, it is easy to accidentally end up with too much or too little stock.<\/p>\n\n\n\n

Multichannel merchants may find retail replenishment particularly challenging, as different channels might move different inventory items at different rates.<\/p>\n\n\n\n

However, like juggling, retail replenishment can get easier the more you do it. With best practices, inventory management software<\/a>, and the right partner, a merchant can learn how to replenish their inventory and keep their supply chain moving with minimal hassle.<\/p>\n\n\n\n

In this article, we\u2019ll cover what retail replenishment is, why it\u2019s important, strategies that you can use to replenish your stock, and how retail replenishment fits into the supply chain.<\/p>\n\n\n\n

What is retail replenishment?<\/h2>\n\n\n\n

Retail replenishment is the process of counting the inventory you have left in stock, and reordering the right amount of stock<\/a> at the right time. In other words, it\u2019s the process of ensuring that you always have sufficient inventory to meet customer demand.<\/p>\n\n\n\n

What makes retail replenishment so important?<\/h2>\n\n\n\n

Retail replenishment is absolutely critical to a business\u2019 performance and profitability. Here are two of the main reasons why retail replenishment matters for your business.<\/p>\n\n\n\n

Helps prevent stockouts<\/h3>\n\n\n\n

When inventory isn\u2019t replenished on time, the business will run out of stock. While stockouts<\/a> may seem like just an inconvenience, they can cause serious problems for a business and result in heavy losses.<\/p>\n\n\n\n

First, stockouts may drive customers to your competitors. Say someone\u2019s shopping on your website and finds a dress that they really like. They click on the product page and read the description; but when they decide to add it to their cart, they find that the dress is unavailable in their size. Disappointed, the shopper leaves your page and looks for a similar dress on a competitor\u2019s site.<\/p>\n\n\n\n

Second, stockouts lead to backorders<\/a> and abandoned carts<\/a>. Imagine that someone places an order on your ecommerce store \u2014 but because your inventory levels are not updated in real-time<\/a>, the item that the customer ordered already went out of stock the day before.<\/p>\n\n\n\n

This means the customer will have to wait for the item to get back in stock, which may lead them to cancel their order. If this happens repeatedly, the cost of canceled orders will add up and cause your business to lose money.<\/p>\n\n\n\n

Moreover, some of these customers will not hesitate to leave negative reviews on third-party review sites, social media, or Google. Those reviews could reflect badly on your business and cost you potential customers.<\/p>\n\n\n\n

Helps prevent overstocking<\/h3>\n\n\n\n

Retail replenishment is also important because the right replenishment strategy helps you stock up on the products that customers want, instead of stocking up on the ones they don\u2019t.<\/p>\n\n\n\n

By counting your inventory and analising sales trends, you can identify the products for which there is the highest demand in a particular season, location, or channel. This information subsequently guides you as you decide which items to order more of, which to order less of, and which to discontinue.<\/p>\n\n\n\n

Without a solid replenishment solution in place, you risk overstocking on unpopular products, which leads to deadstock<\/a> and obsolete inventory<\/a> that increase your holding costs<\/a> and are difficult to offload.<\/p>\n\n\n\n

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\u201cAnother ShipBob integration I love is Inventory Planner. It saves me hours every week in Excel spreadsheets, and I can raise a PO in minutes when it used to take me hours. <\/span><\/em><\/p>\n\n\n\n

For every order I placed for years, I was ordering too much or not enough. Between inventory forecasting tools and the ability to auto-create WROs, we don\u2019t have stockouts much anymore. I sleep better at night.\u201d<\/span><\/em><\/p>\n\n\n\n

Wes Brown, Head of Operations at Black Claw LLC<\/a><\/span><\/p>\n<\/blockquote>\n\n\n\n

Strategies for inventory replenishment<\/h2>\n\n\n\n

There are three main stock replenishment strategies that businesses can follow. Here is a breakdown of how each strategy works, so that you can decide which will work best for your business.<\/p>\n\n\n\n

Reorder point formula<\/h3>\n\n\n\n

Some businesses choose to reorder inventory when stock levels reach a particular threshold, or \u201creorder point\u201d. In other words, the stock level itself is used as a signal for inventory replenishment.<\/p>\n\n\n\n

For example, if your business typically stores 100 units of a particular SKU<\/a>, you might set the reorder point for that SKU at 10 units. When you only have 10 units of inventory left, you would then place a reorder for however many units would restore your inventory count to the optimal level (which can fluctuate over time or from season to season).<\/p>\n\n\n\n

While this is one of the most accurate inventory replenishment strategies, you need to be extremely strategic about it. Some best practices include:<\/p>\n\n\n\n