impact of overstock inventory on your business

In today’s day and age, you will find many people who just like to wander around the stores and explore different items. The people are looking at the different colors, sizes, and product types that they prefer. If you are in this bracket of people, have you wondered what happens to an inventory that doesn’t sell in an online store? Do you know what happens when a business has too much stock at its disposal? This is all a consequence of what we call “overstock inventory” in the business world.

As a retail business owner, looking into consignment shops is always a huge challenge. After all, stocking products with the right pricing strategy isn’t a walk in the park for any eCommerce expert. However, there are consequences if you cannot perform this responsibility to the best of your knowledge. If you end up with overstocking inventory, you have products with unattainable costs. On the flip side, you lose out on many online sales due to understocking.

What is Overstock?

Overstock inventory is inventory you cannot sell within a specific time to the retail stores. In simple words, products are considered overstocked items if customers don’t purchase them in a specific duration. It is also called surplus stock. This situation hampers the smoothness of the retail services. If the supply of products exceeds the customer demand, it results in huge losses.

inspire organics website

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Poor stock management has been a growing concern for numerous businesses worldwide. If furniture, merchandise, gaming consoles, and other categories have unsellable products, they are all examples of overstock. You must liquidate these products at all costs when you cannot sell them. This is why business owners must make informed decisions regarding your stock and managing the inventory. If you are having stock problems frequently, it will be ideal if you have experience in stock inventory management.

Causes of Overstock

1) Lack of Understanding Customer Demand

As the COVID-19 pandemic has affected numerous businesses worldwide, business owners have brought their business plans to the digital world. Customer behavior is vital for an online business and can be a pivotal factor in determining the success or the decline of your business plans. When trying to interpret customer demands, you must ask yourself the following questions:

  • Who are your target customers?
  • Are they repeat customers?
  • Are they new customers?
  • On which of the website sections do your customers seem to be around the most?

online checkout process

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You shouldn’t take anything for granted when managing your inventory. If you don’t understand your customer demands properly, it may result in an overstock inventory. You may have costly overstocking products at your warehouse that will remain static on your store's shelves. This can also hamper your future business plans because you must allocate space for new or trending products. As a business owner, you must remember that the stock issue may take away all the other sale opportunities.

2) Stockouts

As a business owner, you will always consider stockouts as a burden. After all, you have to invest a lot in them. What is the solution when an online store has stockouts? First of all, let’s look into the massive consequences. These products are low on inventory because of shortages. Apart from the decline in revenue, stockouts also inflict long-term consequences on marketing costs. This incompetence can frustrate your customers and put your brand reputation on the line.

product stock status

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As these factors have a long-term effect on your business, you must have a clear plan for dealing with stock outs. There are some instances in which retailers or business owners tend to overcorrect from their stockouts, which increases in surplus goods. This is how you end up with an overstock inventory. To avoid the presence of too much stock at your warehouse, you must implement the best and most relevant inventory practices.

3) Poor Promotion

Regardless of your chosen business niche, marketing is an integral part of your plans. By creating ideal marketing strategies, you will engage with your customers and promote your products effectively. However, if you experience failure with your marketing strategy and cannot connect with your audience, everything will fall apart.

Because you are running quality marketing campaigns, it doesn’t mean that your customers would buy products from your online store in large quantities. You must think about the best and prepare for the worst, which is why it is not advisable to assume things in the digital world. Customer behavior, sentimental feedback, and online sales data should be your primary factors regarding your buying decisions. This is to make sure that you overcome your overstocking problems.

4) Industry Challenges

The situation of overstock inventory may change according to the industry you are associated with. For example, if you belong to the fruits industry, you may have complications within your stocking inventory due to seasonal trends. Similarly, the seasonal trends also overlap with the clothes industry. People will not buy warm clothes in large quantities in the summer unless they are moving to a place where the winter season has begun.

Similarly, if you sell products with a limited life, you will face challenges in overcoming overstock tendencies. The products like prepackaged foods, shampoos, soaps, detergents, and pet products are all examples of products having a limited shelf life. If you cannot sell these products instantly, you will have an overstock inventory.

Impact of Overstock on Business

1) Storage and Space

The biggest impact of overstock inventory is on your storage and space. For example, let’s say you belong to the mobile industry and you have a huge stock of quality mobile phones in your store. If there is a new iPhone model in the market, you won’t be able to attain benefits from it because your previous stock already allocates your storage and space. This is where your business suffers financially, and your overall revenue drops.

Rather than welcoming new products to your store, overstocking has resulted in you providing something for your excess stock products. It is a massive opportunity lost at your end because it doesn’t just take away the sales opportunities. It also takes away your time. You would suddenly realize that you have invested all your energy in bringing new products to your store and have nothing to show.

2) Limited Shelf Life

As we have discussed in the previous points, the seasonal trends, and products with limited shelf life can impact your overstock inventory. Even though you are running an eCommerce business, there is a risk that those products may expire. This is a great challenge for business owners because they have a limited time to sell these products. It also comes with the pressure that you have to make way for the new incoming products.

Even if you send these products instantly, do you realize that there would be immediate effects on your business? Overstocking products may bring you the following challenges to the table:

  • Additional investment in labor and personal compensation
  • Time invested in organizing the products
  • Cost of the transportation of your products
  • Loss of profit margin

Build Online Store on Strikingly

strikingly online store

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Strikingly is a free website builder that allows you to create a quality online store within a couple of clicks. The best thing about Strikingly is that you don’t need any coding or IT degree to consider yourself eligible for website designs. You can create a website design without writing a single line of code on Strikingly. Once you have established your online store, you can start adding all your business products and manage your stocking inventory effectively. We also provide our users with a live chat feature, which allows them to directly connect with their customers.

multiple payment gateways
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The biggest reason people don’t complete the checkout process is the lack of payment gateways. If a customer likes a product on your online store but doesn’t purchase it, it isn’t because you have set a high price but because the payment gateway may not be available in their country. As a result, we can safely say that the lack of payment gateways can result in an overstock inventory. Strikingly removes all these concerns by providing customers with multiple payment gateways. As it is displayed on the image above, we provide Paypal, Stripe, and Square as the payment gateways to our customers.

Strikingly helps you in establishing a direct connection with your customers through the live chat feature. If you want to add this feature on your online store, you must subscribe to our Audience and VIP plans.


Although the business world has transformed in the last couple of years, the objective has always been to get the best out of your available tools. If you have ideal promotional strategies and sell your products, you can save yourself from the burden of an overstock inventory.

Strikingly is a website builder that provides users with all the features of building an online shop. These tools help you make informed decisions so that you don’t end up with an overstock inventory. Register yourself on Strikingly, create an eye-catching online store and maintain your stocking inventory effectively.