Whilst overselling means that you’ve got customers, you’re popular and you’ve shifted a lot of stock (great) it also means that you’re missing out on sales, your customers are left disappointed and your potential customers may head elsewhere (not great). Not overselling stock is one of the eight rules of the eCommerce club (we can’t talk about the first two) and we’re here to help you stick to that rule.
What Is Overselling?
Overselling is not simply running out of stock. Overselling is running out of stock but still allowing consumers to complete purchases anyway. This might be because you sold out on Amazon but haven’t updated eBay, you’ve got your stock levels wrong or you weren’t quick enough to update your inventory.
Why Is Overselling Bad?
Whilst demand outstripping supply sounds good to begin with, in reality, it’s an eCommerce disaster:
1. It’s bad for your reputation
Allowing a customer to proceed to check out, only to later email them with “sorry but we can’t fulfill your order” suggests that you’re unorganised, unprofessional and un-worthy of a revisit. This not only damages your brand image for that particular customer but if they leave negative feedback, it could damage your reputation for many more potential customers to come.
2. It could lead to customer loss
Telling your customer that you can’t immediately fulfill their order may lead them to head to an eCommerce store that can; and once they’ve done that, the might not head back. Research shows that 52% of consumers have switched providers due to poor customer service and, once switched, 65% don’t go back.
3. You’re missing out on sales
Overselling means that you’ve sold out and therefore you’re missing out on lots of potential sales and customers.
What Causes Overselling?
The simple cause of overselling is either having an error in your stock levels (i.e. thinking you have more stock than your warehouse actually has), having unsellable stock (i.e. damaged), not updating your sales channel(s) stock levels quickly and/or a surge in buyers.
How To Prevent Overselling
There are a number of precautions that you, as an eCommerce business owner, can take in order to prevent overselling.
1. Stock Checks
Conducting regular and spot-check stock checks ensures that your stock level figures are correct and your sales channel(s) are accurate. This will help to prevent overselling through an error in numbers.
2. Update Your Sales Channels
If you’re multichannel selling and you’re listing your stock, in full, on each channel, you need to be on the ball. Ensure that when your stock depleats on one channel, that you’re quick to update all of your other channels. That means changing the stock on Amazon, eBay, Etsy, Wish and your own website, to avoid overselling.
3. Ring-Fence Stock
Once your business starts to grow, you expand your sales channel(s) and your orders increase, updating your stock as per #2 will be difficult, if not impossible. One way around this to ring-fence stock for each sales channel.
For example, if you have twelve rose gold watches for sale, list three on Amazon, three on eBay, three on Etsy and three on your own website. This makes overselling impossible but it does come with the drawback that if you sell out on one sales channel, buyers won’t be aware that you’ve got stock available on your other channels, meaning that they may head elsewhere. To avoid this, see #5.
Identify peaks in sales from the previous year, in order to plan stock accordingly for the next year. You might have sold out on cufflinks last father’s day so prepare for this father’s day by ordering increased stock in advance.
Based on your reporting, set reorder points and stick to them. A reorder point is the level of stock that triggers an action to restock.
Or Get Multichannel Management Software with Inventory Management
Multichannel management software, such as Expandly, comes with inventory management tools built in. This means that all of your sales channel(s) are automatically updated with your stock levels, in real-time. Never oversell (or undersell) again.
Plus, with automatic reporting to help identify peaks in demand, you’ll be well placed to put all stock issues at the back of the shelf.