The Unknown Problems of Overstocking

One of the most common mistakes businesses make is overstocking. This issue occurs in both small and big companies. Despite seeming like a good idea, having too many stocks in your inventory does more damage than good.

Overstocking is an easy mistake to make when you don’t use a retail inventory software to keep track of your stocks. First, you have to deal with the fluctuating customer demands, which can change at any time based on the current trends. The demands made by first-time customers will also be different from those placed by repeat customers, making demand planning extremely hard.

Secondly, there’s this fear of “out-of-stocks” (OOS) that many business owners experience at some point. Stockouts cause revenue losses, and so do overstocks. The need to find the perfect balance of stock in and stock out is particularly important for businesses that deal with perishable goods, like foods and medicines. Once again, this issue can be avoided by leveraging a stock and inventory app to monitor the inventory flow.


Ineffective promotional marketing is another cause of overstocking that you can avoid with a retail inventory software. There are cases where business owners buy products in a large quantity because they rely too much on their marketing or bet on current trends. When the reality ends up being completely different from the expectation, you end up with a surplus of goods eating up your inventory space.

Now let’s count all the hidden costs of overstocking. The most obvious one is storage space, as you have to put away the surplus goods until there’s a demand for them. With small businesses, the inventory space will likely take place in the business owner’s living space or the store itself. This creates a clutter that can hurt customer experience and harm your branding. As for large companies, the surplus goods leave you with less space in the warehouse to work with. In a worst-case scenario, you might even need to rent another warehouse to accommodate all the stocks, a massive extra spending that can hurt the cash flow.

Don’t forget about the human resource you need to manage and transport your products. Even if you as the business owner are handling them yourself, you’re still losing time and energy – two things most valuable for small businesses.

Last but certainly not least, you’re risking losing a ton of money if you can’t sell the surplus products before they expire or their quality decreases. Image if you’re a restaurant owner and you have way more eggs than you need. The only options are selling them at a discount price or throwing them away, both equally hurting you financially.

Advstock’s small business stocktaking app makes sure you don’t ever have to deal with overstocking. Our self-service stocktaking system allows small businesses to do stocktakes as frequently as needed by leveraging smartphones. Our retail inventory software can capture data in real-time, giving you better insights into your inventory. The information that our stock and inventory app gathers will help you to make sound business decisions.

Reach out to us if you want to take your inventory management to the next level!

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