{"id":21283,"date":"2025-05-05T19:37:32","date_gmt":"2025-05-05T19:37:32","guid":{"rendered":"https:\/\/www.shipbob.com\/uk\/blog\/inventory-shortage\/"},"modified":"2025-10-14T20:06:34","modified_gmt":"2025-10-14T20:06:34","slug":"inventory-shortage","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/uk\/blog\/inventory-shortage\/","title":{"rendered":"Understanding Ecommerce Inventory Shortages: Causes, Impact, and Solutions"},"content":{"rendered":"\n<div class=\"wp-block-shipbob-blocks-single-toc single-toc\" data-controller=\"blog-toc-controller\" data-action=\"scroll@window-&gt;blog-toc-controller#scrollChanged:passive\" id=\"toc-component\"><div class=\"single-toc-overview\"><p>Table of Contents<\/p><div class=\"single-toc-read-time\"><p>** Minutes<\/p><\/div><\/div>\n<p><a href=\"#h-what-is-an-inventory-shortage-nbsp\">What is an inventory shortage?&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#\">The consequences of inventory shortage<\/a><\/p>\n\n\n\n<p><a href=\"#\">How a lack of inventory impacts various industries&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#\">Lessons from recent supply chain disruptions<\/a><\/p>\n\n\n\n<p><a href=\"#h-what-causes-inventory-scarcity-nbsp\">What causes inventory scarcity?&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#h-how-to-prevent-and-manage-a-lack-of-inventory-nbsp\">How to prevent and manage a lack of inventory&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#h-how-shipbob-helps-businesses-mitigate-inventory-shortages-nbsp\">How ShipBob helps businesses mitigate inventory shortages&nbsp;<\/a><\/p>\n\n\n\n<p><a href=\"#h-inventory-shortage-faqs-nbsp\">Inventory shortage FAQs&nbsp;<\/a><\/p>\n<\/div>\n\n\n\n<p>Nothing sours your store\u2019s success like an inventory shortage. You want to capitalise on your demand \u2013 whether it\u2019s a seasonal spike in orders, going viral on TikTok, or a blowout sale \u2013 but when you don\u2019t have enough product on hand to meet that demand, you miss out on revenue and risk upsetting your customers.&nbsp;&nbsp;<\/p>\n\n\n\n<p>To help you avoid inventory shortages, let\u2019s walk through their common causes, how to prevent them, and how expert <a href=\"https:\/\/www.shipbob.com\/inventory-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory management<\/a> and fulfilment partners like ShipBob can help.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-an-inventory-shortage-nbsp\">What is an inventory shortage?&nbsp;<\/h2>\n\n\n\n<div class=\"wp-block-shipbob-blocks-blog-arrow-card blog-arrow-card\">\n<p>An inventory shortage occurs when a brand does not have enough inventory on hand to fulfil your outstanding orders.&nbsp;&nbsp;<\/p>\n<\/div>\n\n\n\n<p>In other words, inventory shortages happen when a brand runs out of on-hand units of a certain product before they can fulfil all their orders for that product.&nbsp;&nbsp;<\/p>\n\n\n\n<p>This prevents the brands from making additional sales until they get more inventory, which essentially caps the amount of customer demand they can capture.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<section class=\"wp-block-shipbob-blocks-single-heading-accordion single-heading-accordion container max-width-blog\" data-controller=\"accordion-controller\" data-accordion-controller-open-value=\"false\"><div class=\"single-heading-accordion-heading-container\" data-accordion-controller-target=\"actionElement\"><h2 class=\"single-heading-accordion-title h3\">The consequences of inventory shortage<\/h2><\/div><div class=\"single-heading-accordion-inner-content\" data-accordion-controller-target=\"innerContent\">\n<p>An inventory shortage leads to a host of serious repercussions for your business, which will impact your bottom line. Some of the most common issues stemming from a shortage of inventory include:&nbsp;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Lost sales:<\/strong> When you don\u2019t have enough inventory to sell, you miss out on the chance to convert your customers and generate sales. This translates to a loss of revenue, leading to decreased profitability.&nbsp;<\/li>\n\n\n\n<li><strong>High stockout costs: <\/strong>Inventory shortages lead to stockout, leaving businesses to incur high <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/stockout-costs\/\">stockout costs<\/a>. Stockouts also lead to other indirect costs, such as higher fees for expedited shipment to replenish your stock.&nbsp;<\/li>\n\n\n\n<li><strong>Customer dissatisfaction:<\/strong> When you don\u2019t have enough products for customers to buy, it will automatically affect their experience with your business. Seeing that an item they want to buy is out of stock, having an item on <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/backorder\/\">backorder<\/a>, and long wait times are leading causes of dissatisfied customers.&nbsp;<\/li>\n\n\n\n<li><strong>Cash flow issues:<\/strong> If you don\u2019t have enough inventory to sell to customers, you\u2019re not generating sales. This directly disrupts your cash flow, which could lead to financial shortages that disrupt other aspects of your operations.&nbsp;<\/li>\n\n\n\n<li><strong>Damaged brand reputation:<\/strong> A business that constantly experiences inventory shortages will eventually lose the trust of their consumers. Other symptoms of inventory shortages, such as slow fulfilment times and high volumes of backorders, also negatively impact the customer experience.&nbsp;<\/li>\n<\/ul>\n<\/div><\/section>\n\n\n\n<section class=\"wp-block-shipbob-blocks-single-heading-accordion single-heading-accordion container max-width-blog\" data-controller=\"accordion-controller\" data-accordion-controller-open-value=\"false\"><div class=\"single-heading-accordion-heading-container\" data-accordion-controller-target=\"actionElement\"><h2 class=\"single-heading-accordion-title h3\">How a lack of inventory impacts various industries&nbsp;<\/h2><\/div><div class=\"single-heading-accordion-inner-content\" data-accordion-controller-target=\"innerContent\">\n<p>The consequences of inventory shortage are common across all industries. However, inventory scarcity may hit every industry differently due to unique factors, such as supply chain attributes, consumer behaviour, and the nature of products. Here&#8217;s a breakdown of some of the ways in which a lack of inventory impacts various industries.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-manufacturing-nbsp\">Manufacturing&nbsp;<\/h4>\n\n\n\n<p>Companies in the manufacturing sector have other businesses relying on them to supply them with <a href=\"https:\/\/www.shipbob.com\/blog\/finished-goods-inventory\/\" target=\"_blank\" rel=\"noreferrer noopener\">finished goods inventory<\/a>. However, if they experience a shortage of raw materials inventory, it delays production, which disrupts the flow of goods further down in the supply chain.&nbsp;<\/p>\n\n\n\n<p>Inventory shortages in manufacturing could result in serious disruptions impacting the entire supply chain. If manufacturers don\u2019t have <a href=\"https:\/\/www.shipbob.com\/blog\/raw-materials-inventory\/\" target=\"_blank\" rel=\"noreferrer noopener\">raw materials inventory<\/a>, suppliers don\u2019t have finished goods inventory to supply to retail businesses. In other words, it creates inventory shortages across not only their supply chains, but across other industries as well.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-retail-nbsp\">Retail&nbsp;<\/h4>\n\n\n\n<p>In the retail sector, inventory shortage results in stockouts, which leaves you unable to fulfil customer orders. You may have to deal with <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-backlog\/\" target=\"_blank\" rel=\"noreferrer noopener\">backlogs<\/a> and backorders and longer fulfilment timelines, which impact customer satisfaction and discourage repeat business. Alternatively, you may also lose customers to the competition when the product they want is unavailable at your store.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-health-and-wellness-nbsp\">Health and wellness&nbsp;<\/h4>\n\n\n\n<p>Inventory shortages in the&nbsp;<a href=\"https:\/\/www.shipbob.com\/categories\/health-and-wellness\/\" target=\"_blank\" rel=\"noreferrer noopener\">health and wellness<\/a> sectors can be serious, as they could leave customers unable to quickly or effectively treat their medical needs. Shortages caused by logistical disruptions could also result in expired or damaged products being delivered, causing further problems in delivering care.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-food-and-beverages-nbsp\">Food and beverages&nbsp;<\/h4>\n\n\n\n<p>The <a href=\"https:\/\/www.shipbob.com\/categories\/food-and-beverage\/\" target=\"_blank\" rel=\"noreferrer noopener\">food and beverage<\/a> industry is especially susceptible to inventory shortages as these businesses may keep a low stock to avoid dealing with excess and expired products. However, this leaves them vulnerable to stockouts, which prevents them from fulfilling customer demand. This has a serious impact on cash flow and customer satisfaction. In some cases, inventory shortages throughout the supply chain could lead to rising costs.&nbsp;<\/p>\n<\/div><\/section>\n\n\n\n<section class=\"wp-block-shipbob-blocks-single-heading-accordion single-heading-accordion container max-width-blog\" data-controller=\"accordion-controller\" data-accordion-controller-open-value=\"false\"><div class=\"single-heading-accordion-heading-container\" data-accordion-controller-target=\"actionElement\"><h2 class=\"single-heading-accordion-title h3\">Lessons from recent supply chain disruptions<\/h2><\/div><div class=\"single-heading-accordion-inner-content\" data-accordion-controller-target=\"innerContent\">\n<p>Recent disruptions to the <a href=\"https:\/\/www.shipbob.com\/blog\/global-supply-chains\/\" target=\"_blank\" rel=\"noreferrer noopener\">global supply chain<\/a> serve as bywords warning of the dangers inventory shortages pose to businesses. The Suez Canal obstruction, for instance, resulted in massive disruptions that caused shortages further down in the supply chain. With <a href=\"https:\/\/www.reuters.com\/article\/world\/middle-east\/suez-canal-blockage-adds-strain-to-global-supply-chains-idUSKBN2BI13B\/\" target=\"_blank\" rel=\"noreferrer noopener\">30% of container traffic<\/a> flowing through the canal every year, the blockage served as a wake-up call indicating the need for businesses to diversify their suppliers.&nbsp;<\/p>\n\n\n\n<p>Additionally, shortages caused by the COVID-19 pandemic also highlighted the need for businesses to carry safety stock in preparation for unexpected disruptions. This could tide them over during periods of sudden demand spikes, logistical disturbances, and other inventory scarcity events.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2022\/07\/supply-chain-planning-1.jpg?w=1280\" alt=\"\" class=\"wp-image-936\"\/><\/figure>\n<\/div><\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-causes-inventory-scarcity-nbsp\">What causes inventory scarcity?&nbsp;<\/h2>\n\n\n\n<p>Businesses may experience inventory shortage for a number of reasons, with both internal and external factors playing into it. Here are some of the most common causes, so you can identify and prevent potential shortages before they happen.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2022\/07\/Dropshipping.jpg?w=1280\" alt=\"\" class=\"wp-image-264\"\/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-supply-chain-disruptions-nbsp\">Supply chain disruptions&nbsp;<\/h3>\n\n\n\n<p>One of the biggest external factors leading to inventory scarcity is a disruption in the supply chain. Delayed shipments and transportation issues can create <a href=\"https:\/\/www.shipbob.com\/au\/blog\/supply-chain-bottlenecks\/\">supply chain bottlenecks<\/a> that trickle down to create inventory shortages.&nbsp;<\/p>\n\n\n\n<p>In some cases, a problem with the <a href=\"https:\/\/www.shipbob.com\/blog\/supplier-manufacturer\/\" target=\"_blank\" rel=\"noreferrer noopener\">supplier or manufacturer<\/a> could lead to longer lead times that affect inventory levels. Raw material shortages, natural disasters, labour shortages, and geopolitical disturbances are leading causes of disruptions that may lead to a shortage of inventory.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2024\/08\/c2ce1056092a881e6d5b075ed863fcc9.png?w=580\" alt=\"\" class=\"wp-image-15289\" style=\"width:800px;height:auto\"\/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-inaccurate-demand-forecasting-nbsp\">Inaccurate demand forecasting&nbsp;<\/h3>\n\n\n\n<p>While external forces like the ones highlighted above are often unforeseeable, businesses can also experience shortages due to internal factors like inaccurate demand planning. Any miscalculations or faulty data in your <a href=\"https:\/\/www.shipbob.com\/blog\/demand-forecasting\/\" target=\"_blank\" rel=\"noreferrer noopener\">demand forecasting<\/a> could result in inaccurate predictions. Additionally, failure to accurately predict demand spikes could affect your replenishment timing.&nbsp;<\/p>\n\n\n\n<p>As a result, you may fail to order enough inventory to meet customer demand, leading to stockouts. Alternatively, you may also order more inventory than you can sell, leading to <a href=\"https:\/\/www.shipbob.com\/blog\/overstocking\/\" target=\"_blank\" rel=\"noreferrer noopener\">overstocking<\/a>.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"280\" width=\"700\" src=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/06\/32d853fd4ce011bb15b8d9c4e209fb24.jpg?w=1280\" alt=\"\" class=\"wp-image-8804\" srcset=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/06\/32d853fd4ce011bb15b8d9c4e209fb24.jpg?w=1400 1400w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/06\/32d853fd4ce011bb15b8d9c4e209fb24.jpg?w=160 160w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/06\/32d853fd4ce011bb15b8d9c4e209fb24.jpg?w=400 400w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/06\/32d853fd4ce011bb15b8d9c4e209fb24.jpg?w=768 768w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/06\/32d853fd4ce011bb15b8d9c4e209fb24.jpg?w=700 700w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/06\/32d853fd4ce011bb15b8d9c4e209fb24.jpg?w=1280 1280w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/06\/32d853fd4ce011bb15b8d9c4e209fb24.jpg?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-logistical-challenges-nbsp\">Logistical challenges&nbsp;<\/h3>\n\n\n\n<p>Businesses may also experience various logistical challenges that cause shortages in stock.&nbsp;&nbsp;<\/p>\n\n\n\n<p>For instance, if you\u2019re not fulfilling existing orders fast enough, you may not have the room to store more inventory, making replenishment a challenge. This makes it crucial to boost <a href=\"https:\/\/www.shipbob.com\/blog\/logistics-efficiency\/\" target=\"_blank\" rel=\"noreferrer noopener\">logistics efficiency<\/a> throughout the supply chain.&nbsp;<\/p>\n\n\n\n<p>Inventory mismanagement is also a leading cause of inventory shortages. Failure to perform regular inventory counts can lead to <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-discrepancy\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory discrepancies,<\/a> while failure to account for <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/dead-stock\/\">dead stock <\/a>may significantly reduce your existing inventory without you realizing it.&nbsp;<\/p>\n\n\n\n<p>Additionally, if your sales and inventory systems aren\u2019t properly integrated, your inventory data is more susceptible to errors. Sales that aren\u2019t automatically entered into your inventory software result in you having significantly less <a href=\"https:\/\/www.shipbob.com\/blog\/physical-inventory\/\" target=\"_blank\" rel=\"noreferrer noopener\">physical inventory<\/a> on hand than what\u2019s displayed in your records.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-prevent-and-manage-a-lack-of-inventory-nbsp\">How to prevent and manage a lack of inventory&nbsp;<\/h2>\n\n\n\n<p>Following inventory management best practices is the best way to maintain optimal stock levels. Let\u2019s break down some inventory management processes that can help you prevent inventory shortage.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-real-time-inventory-tracking-nbsp\">Real-time inventory tracking&nbsp;<\/h3>\n\n\n\n<p>Being able to see your stock levels in real time is the key to understanding your inventory needs. <a href=\"https:\/\/www.shipbob.com\/inventory-management\/real-time\/\">Real-time inventory<\/a> tracking lets you see how many units you have on hand for a particular <a href=\"https:\/\/www.shipbob.com\/blog\/sku-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">SKU<\/a>. Your inventory tracking software and processes should integrate with your sales channels and <a href=\"https:\/\/www.shipbob.com\/warehouse-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">warehouse management<\/a> systems, so that inventory data is automatically updated when new orders are placed and fulfilled.&nbsp;<\/p>\n\n\n\n<p>This way, you can see when you\u2019re running low on stock for that item and reorder more inventory before you actually run out of stock, giving you enough time to replenish your inventory and effectively meet customer demand.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-predictive-demand-forecasting-nbsp\">Predictive demand forecasting&nbsp;<\/h3>\n\n\n\n<p>The ability to anticipate your future inventory needs is another vital step to preventing inventory shortage. This allows you to plan ahead and stock up on inventory in preparation for demand surges.&nbsp;<\/p>\n\n\n\n<p>Data-driven demand forecasting tools are crucial to accurately predict your inventory needs. These tools track historical sales data to identify demand patterns, enabling them to make intelligent forecasts about how much demand you\u2019ll see for specific items so you can plan your procurement accordingly.&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cOrder volume spikes and the ability to forecast them are challenging for any business. We\u2019ve had campaigns that have resulted in 20x the order volume in 24 hours. If we were fulfilling our own orders, we would have struggled to find staff at such short notice. Working with ShipBob has given us more structure around planning and forecasting. ShipBob is consistently reaching out to ask about promotions so they can scale up fulfilment centre processes and staff as needed. As a result, we\u2019ve been able to more seamlessly accommodate large order spikes with ShipBob as our fulfilment partner.\u201d <\/em><\/p>\n\n\n\n<p>Michael Harper, Co-Founder of CRIMPiT, and Sean Togher, Finance Director at CRIMPiT&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-distributed-inventory-systems-nbsp\">Distributed inventory systems&nbsp;<\/h3>\n\n\n\n<p>When you store all your inventory in one place, you\u2019re more likely to get impacted by inventory shortage. Any stockouts or disruptions in the region could leave you with no backup option, making it difficult to effectively meet customer demand. This makes it crucial to diversify your inventory management with distributed inventory systems.&nbsp;<\/p>\n\n\n\n<p>Storing your <a href=\"https:\/\/www.shipbob.com\/blog\/3-benefits-using-more-than-one-warehouse-ecommerce-fulfillment\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory in more than one warehouse<\/a> helps you ensure reasonable delivery times, as a stockout in one region won\u2019t necessarily impact the rest of your operation because you can still fulfil orders using the inventory from another location.&nbsp;&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cIn the first couple years of our business, our products were constantly going in and out of stock because of how quickly the brand was growing and how high demand was. We wanted to make sure we could get good inventory levels at each location, so we joined ShipBob\u2019s Inventory Placement Program to improve inventory allocation and distribution across the US. IPP has been a game changer for us. First, it reduces costs for us, because we&#8217;re shipping more orders a much shorter distance. Second, and maybe equally as important, it&#8217;s reducing the time that customers have to wait to get packages. And we&#8217;re still not even leveraging ShipBob\u2019s network to its fullest extent.\u201d&nbsp;<\/em><\/p>\n\n\n\n<p>Tyler McCann, Co-Founder of Taste Salud<\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-maintaining-safety-stock-nbsp\">Maintaining safety stock&nbsp;<\/h3>\n\n\n\n<p>While you don\u2019t want to keep too much inventory on hand, only carrying just enough stock to meet demand can also be risky. It\u2019s important to carry some sort of backup inventory \u2013 often called safety stock \u2013 to tide you over during unexpected demand surges or supply chain disruptions.&nbsp;<\/p>\n\n\n\n<p>It&#8217;s particularly important to have some <a href=\"https:\/\/www.shipbob.com\/blog\/buffer-inventory\/\" target=\"_blank\" rel=\"noreferrer noopener\">buffer stock<\/a> in industries that are prone to <a href=\"https:\/\/www.shipbob.com\/blog\/demand-volatility\/\" target=\"_blank\" rel=\"noreferrer noopener\">demand volatility<\/a>. That way, you can be prepared with backup inventory to meet customer demand while you wait for your replenishment stock.&nbsp;<\/p>\n\n\n\n<p>Additionally, every business should keep some <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/safety-stock\/\" target=\"_blank\" rel=\"noreferrer noopener\">safety stock<\/a> to keep them afloat during any disruptions affecting inventory supply. Calculate how much inventory to keep as safety stock depending on your daily usage and lead times so you can find the right balance.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-shipbob-helps-businesses-mitigate-inventory-shortages-nbsp\">How ShipBob helps businesses mitigate inventory shortages&nbsp;<\/h2>\n\n\n\n<p>ShipBob\u2019s sophisticated inventory management technology and&nbsp;best-in-class fulfilment solutions are designed to give you more visibility into and control over your inventory, empowering you to maintain optimal inventory levels and prevent inventory shortages.&nbsp;<\/p>\n\n\n\n<p>Here are just some of the solutions that ShipBob merchants leverage to optimise their inventory management.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-strategically-distribute-inventory-across-key-locations-with-our-inventory-placement-program-nbsp\">Strategically distribute inventory across key locations with our Inventory Placement Program&nbsp;<\/h3>\n\n\n\n<p>ShipBob\u2019s <a href=\"https:\/\/www.shipbob.com\/product\/inventory-placement\/\" target=\"_blank\" rel=\"noreferrer noopener\">Inventory Placement Program<\/a> lets you strategically distribute your inventory across&nbsp;ShipBob\u2019s global fulfilment centre network. Using a proprietary algorithm based on your real order data, our software considers sales levels and demand patterns across different regions to smartly allocate inventory and keep your stock near the highest-demand regions. This takes the guesswork out of inventory distribution, allowing you to effectively meet customer demand using data-driven placements.&nbsp;<\/p>\n\n\n\n<p>As a result, you can prevent shortages in areas where specific items tend to see higher demand. This also reduces the need to repeatedly redirect inventory from another warehouse when you run out of stock in one location. That way, you can minimise delays (since orders are directly shipped out from the high-demand region instead of having to wait for backup stock from a different region).&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cBefore IPP, we had a team of 3 people who were focused on distributing products correctly within the ShipBob network. In order to do that, we had to have a good understanding of the sales velocity in each region. They had to pay close attention to how stocked each warehouse was. Because if you don\u2019t distribute products correctly, orders are going to ship from a farther warehouse which is going to cause longer transit times and cost more money.&nbsp; <\/em><\/p>\n\n\n\n<p><em>It was time-consuming for us to distribute and rebalance inventory on our own. With IPP, we can send products to one location and then ShipBob\u2019s algorithms and technology use our historical order data to replenish inventory to each facility. That removes the responsibility from us. We can send inventory to one facility and then forget about it. We send our inventory to ShipBob once, they receive it, and they distribute it across their US network. We\u2019re saving thousands of dollars each month by using IPP.\u201d<\/em><\/p>\n\n\n\n<p>Cesar Contreras, Head of Supply Chain of Wholesome Goods&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<p>Predict demand and prevent stockouts with real-time analytics and forecasting&nbsp;<\/p>\n\n\n\n<p>ShipBob\u2019s robust <a href=\"https:\/\/support.shipbob.com\/s\/article\/Analytics-Dashboard-Homepage\">analytics<\/a> play a vital role in effective inventory replenishment, giving you comprehensive data to understand SKU-specific performance and forecast demand. You can track key inventory metrics like SKU velocity, units sold per day, days of inventory left, and order destinations to make informed decisions about your inventory needs.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-gallery has-nested-images columns-default is-cropped wp-block-gallery-1 is-layout-flex wp-block-gallery-is-layout-flex\">\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"700\" width=\"700\" data-id=\"21095\" src=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-1.png?w=1080\" alt=\"\" class=\"wp-image-21095\" srcset=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-1.png?w=1080 1080w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-1.png?w=160 160w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-1.png?w=400 400w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-1.png?w=768 768w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-1.png?w=700 700w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2025\/04\/7c2fd3b8afdd68a036d73213619e4615-1.png?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"458\" width=\"700\" data-id=\"21096\" src=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/d07452d06cbae6bb036e8dc924d567b0-e1745013341332.png?w=1080\" alt=\"\" class=\"wp-image-21096\" srcset=\"https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/d07452d06cbae6bb036e8dc924d567b0-e1745013341332.png?w=1080 1080w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/d07452d06cbae6bb036e8dc924d567b0-e1745013341332.png?w=160 160w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/d07452d06cbae6bb036e8dc924d567b0-e1745013341332.png?w=400 400w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/d07452d06cbae6bb036e8dc924d567b0-e1745013341332.png?w=768 768w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/d07452d06cbae6bb036e8dc924d567b0-e1745013341332.png?w=700 700w, https:\/\/www.shipbob.com\/wp-content\/uploads\/2025\/04\/d07452d06cbae6bb036e8dc924d567b0-e1745013341332.png?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n<\/figure>\n\n\n\n<p>With the platform tracking these inventory performance metrics over time, you can easily identify demand patterns and buying trends to accurately predict future demand. Combined with real-time analytics, you can easily anticipate demand fluctuations and stay prepared for seasonal surges or unexpected demand.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-optimize-inventory-across-a-distributed-network-for-faster-reliable-delivery-nbsp\">Optimise inventory across a distributed network for faster, reliable delivery&nbsp;<\/h3>\n\n\n\n<p>With ShipBob, you can take advantage of an expansive network of fulfilment centres to store your inventory. This includes dozens of <a href=\"https:\/\/www.shipbob.com\/shipbob-locations\/\" target=\"_blank\" rel=\"noreferrer noopener\">ShipBob locations<\/a> in the United States and fulfilment centres in Canada, Australia, Europe, and the U.K., which enables you to strategically <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-optimization\/\" target=\"_blank\" rel=\"noreferrer noopener\">optimise inventory<\/a> levels across this network based on regional demand patterns and ensure sufficient stock availability where your customers need it the most.&nbsp;<\/p>\n\n\n\n<p>This allows you to ship out orders from the most convenient locations based on proximity and stock availability. As a result, you can significantly reduce transit times, ensuring faster deliveries and lower shipping costs.&nbsp;<\/p>\n\n\n\n<p>Moreover, with shorter transits, there\u2019s a lower risk of transportation delays and logistical issues that could negatively impact your fulfilment timeline. This means you can provide fast and reliable delivery that enhances the customer experience.&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-style-blog is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cDistributing inventory across the world with ShipBob drastically cut our transit times. When we were only shipping from our Miami, FL warehouse, it would take us 25 days to deliver an order to a customer in the EU, while using ShipBob\u2019s UK fulfilment centre, it takes only 3 days. That\u2019s an 88% reduction in shipping time for those international customers!\u201d<\/em><\/p>\n\n\n\n<p>Rachel Tannenholz, President of Aroma360&nbsp;<\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-gain-full-control-over-inventory-tracking-and-replenishment-with-shipbob-s-wms-nbsp\">Gain full control over inventory tracking and replenishment with ShipBob\u2019s WMS&nbsp;<\/h3>\n\n\n\n<p>ShipBob\u2019s warehouse management system comes with powerful tools to simplify inventory tracking and replenishment. It serves as a single source of truth to enhance inventory visibility so you can have better control over how you manage it.&nbsp;<\/p>\n\n\n\n<p>The <a href=\"https:\/\/www.shipbob.com\/product\/wms\/\" target=\"_blank\" rel=\"noreferrer noopener\">WMS<\/a> integrates with major&nbsp;sales channels, automatically processing your orders and getting them ready for fulfilment. Meanwhile, inventory movement is automatically entered into the system as your warehouse staff <a href=\"https:\/\/www.shipbob.com\/warehouse-operations\/warehouse-order-picking\/\" target=\"_blank\" rel=\"noreferrer noopener\">picks<\/a>, packs, and ships orders to customers. That way, your inventory data is automatically updated as goods move in and out of the warehouse, ensuring real-time inventory information.&nbsp;<\/p>\n\n\n\n<p>As a result, you can instantly see when you\u2019re starting to run low on stock, giving you enough time to put in a replenishment order before you experience a stockout. You can even set a reorder point notification, which will alert you when your inventory level hits a certain number, so you don\u2019t forget when to replenish inventory and risk an inventory shortage.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"211\" width=\"700\" src=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=1140\" alt=\"\" class=\"wp-image-10267\" srcset=\"https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=1140 1140w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=160 160w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=400 400w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=768 768w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=700 700w, https:\/\/www.shipbob.com\/uk\/wp-content\/uploads\/sites\/32\/2023\/10\/3b9ae7d700d4badd7480917c69ba05b2.png?w=240 240w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/figure>\n\n\n\n<p>For more information on how ShipBob\u2019s solutions can help you manage your inventory&nbsp;and avoid shortages, click the button below to get in touch. &nbsp;<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.shipbob.com\/quote\/\">Speak to a Fulfilment Expert<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-inventory-shortage-faqs-nbsp\">Inventory shortage FAQs&nbsp;<\/h2>\n\n\n\n<p>Below are answers to the most commonly asked questions about inventory shortages.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">How can small businesses prevent inventory shortages?&nbsp;<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\"><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p>Small businesses can prevent inventory shortages by accurately forecasting demand and tracking inventory levels in real time. This allows them to replenish their stock on time and procure the right amount of stock based on their needs.&nbsp;<\/p>\n\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">How does ShipBob help ecommerce businesses with inventory management?&nbsp;<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\"><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p>ShipBob&rsquo;s <a href=\"https:\/\/www.shipbob.com\/inventory-management\/software\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory management software<\/a> provides real-time inventory visibility to track inventory levels and identify when you need to replenish your stock. You also get performance insights and historical sales data to help with demand forecasting so you can prepare for demand spikes.&nbsp;<\/p>\n\n\n<p>Additionally, you can make use of ShipBob&rsquo;s distributed fulfilment network to strategically store your inventory based on regional demand, which reduces the risk of stockouts in high-demand areas.&nbsp;<\/p>\n\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">Can determining lead times prevent inventory shortages?&nbsp;<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\"><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p>Yes, average lead time is a key factor in determining when you need to reorder inventory so you can restock on time before you experience a shortage.&nbsp;<\/p>\n\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-shipbob-blocks-single-faq single-faq direction-col\" data-controller=\"faq-controller\" data-faq-controller-open-value=\"true\"><div class=\"single-faq-title-contianer\"><h4 class=\"single-faq-title\">How do you calculate safety stock to prevent inventory shortages?&nbsp;<\/h4><div class=\"single-faq-expand\" data-faq-controller-target=\"expand\"><img decoding=\"async\" src=\"\/wp-content\/themes\/shipbob-2022\/resources\/svg\/plus-solid.svg\"><\/div><\/div><div class=\"single-faq-childs\" data-faq-controller-target=\"answer\"><div>\n\n<p>You can use the following safety stock formula to understand how much backup inventory you need to keep to prevent inventory shortages:&nbsp;<\/p>\n\n\n<p><em>Safety stock = (Maximum daily usage x maximum lead time) &ndash; (average daily usage x average lead time)<\/em>&nbsp;<\/p>\n\n<\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Check out our walkthrough of inventory shortages, including their common causes, how to prevent them, and how an expert partner can help.<\/p>\n","protected":false},"author":194,"featured_media":21286,"parent":0,"template":"","meta":{"content-type":"","inline_featured_image":false,"footnotes":""},"blogcategories":[8],"class_list":["post-21283","blog","type-blog","status-publish","has-post-thumbnail","hentry","blogcategories-inventory"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.5 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How to Solve + Prevent Inventory Shortages &amp; Scarcity<\/title>\n<meta name=\"description\" content=\"Check out our walkthrough of inventory shortages, including their common causes, how to prevent them, and how an expert partner can help.\" \/>\n<meta name=\"robots\" content=\"index, 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