A customer walks into your store ready to buy a winter coat before the big snowstorm forecast at the end of the week. They've done their research online, they know exactly what they want, and they're prepared to hand over their credit card. But the product isn't on the rack.
Your associates check the stockroom—nothing. They can't say when it'll arrive. That customer leaves empty-handed, and with the first snow of the season looming in a matter of days, they probably won't come back.
This scenario is happening in retail stores right now. Inventory distortions—the combined cost of out-of-stock and overstocked items—cost retailers over $1.7 trillion globally each year, according to 2025 data from IHL Group. Product availability directly impacts your revenue, customer trust, and competitive position.
This guide shows you how to measure product availability using three key metrics and provides proven strategies to improve inventory availability and prevent stockouts.
What is product availability?
Product availability measures whether items are in stock and available for purchase when customers want to buy them. It's a fundamental retail metric that tracks your ability to meet customer demand at the point of sale, whether in a brick-and-mortar store, online, or through other sales channels.
When product availability is high, customers find what they need and complete their purchases. When it's low, you lose sales, frustrate shoppers, and risk long-term damage to your business.
Why product availability is crucial for customer loyalty and sales
Poor product availability can cost you up to 8% of your revenue through lost sales, according to Retail Insight. When products are unavailable or hidden in back rooms, missed transactions add up quickly—and the damage extends far beyond a single lost sale. Up to 78% of US shoppers have experienced out-of-stock products, demonstrating that product availability is not just an operational concern, but a strategic imperative.
Strong product availability delivers three critical business advantages:
- Customer satisfaction and loyalty: Customers expect to find what they need when they're ready to buy, and may lose trust in your brand if they encounter regular stockouts. This erosion of trust compounds over time.
- Competitive advantage: Supply chain bottlenecks and demand-forecasting errors affect every retailer, but those who consistently maintain inventory positively affect customer expectations, training shoppers to visit them first.
- Operational efficiency: Maintaining optimal product availability means holding enough inventory to meet demand without tying up too much capital in overstock. Accurate forecasting and inventory management reduce carrying costs while preventing the expensive rush orders and expedited shipping that emergency restocking requires. You avoid both the revenue loss of empty shelves and the margin erosion of excess inventory sitting in storage.
Common causes of poor product availability
Product availability problems don't appear randomly. They stem from specific, identifiable breakdowns in your retail operations, and understanding their root causes transforms product availability from a reactive problem into a preventable challenge.
When you know where stockouts originate, you can implement targeted solutions before empty shelves impact your revenue.
Supply chain disruptions
Supply chain issues inflate lead times and create unpredictability that ripples through your entire inventory system. Shipping containers don't need to get stuck in the Suez Canal to threaten product availability—disruptions occur at every link in the supply chain and compound quickly when multiple issues converge:
- Raw material shortages can force your suppliers to pause production or switch to alternative materials, requiring new sourcing relationships and quality tests.
- Natural disasters can halt manufacturing in affected regions and create transportation bottlenecks that persist for weeks after the immediate crisis ends.
- Regulatory changes can suddenly require additional product testing to clear customs, turning a predictable two-week lead time into a six-week uncertainty.
- Supplier capacity constraints can become critical during peak seasons when your vendors serve multiple retailers competing for the same production slots.
These supply chain disruptions turn once-stable lead times into moving targets, making consistent product availability nearly impossible without significant safety stock reserves.
Inaccurate demand forecasting
It’s difficult to tell what the future holds. Poor forecasting amplifies the risk of stockouts and turns manageable variability into business-threatening availability gaps. The challenge grows when external factors shift customer behavior in ways historical data can't predict.
Consider this scenario: you forecast 4,000 units for Black Friday based on last year's sales and market trends, and current inventory velocity. But then a TikTok video featuring your product goes viral three days before the sale. Your entire inventory—including safety stock—sells out in the first few hours, creating a stockout during the year's most critical shopping weekend. Your forecasting wasn't wrong based on available data—it simply couldn't account for unpredictable viral demand spikes.
Here are some common scenarios that can challenge effective forecasting:
- Seasonal prediction errors, such as under- or overestimating peak period demand
- New product launches that have you guessing initial order quantities because you don’t have historical data to reference
- Surprise demand surges when marketing campaigns perform better than expected
AI-powered forecasting tools can help analyze patterns across multiple data sources to improve prediction accuracy, but demand forecasting remains one of the most complex variables affecting product availability.
Inefficient inventory management
Manual processes and disconnected systems create blind spots that make it difficult to maintain reliable product availability. When your inventory data doesn't reflect reality, every downstream decision—from reorder timing to promising delivery dates—starts from a flawed foundation.
This can happen for several reasons:
- Poor visibility across sales channels: Online systems don't reflect what's actually on store shelves. Meanwhile, store associates can't see warehouse availability when customers request items.
- Manual process errors: Human data entry introduces mistakes during receiving, transfers, and cycle counts.
- Disconnected systems: Retailers reconcile inventory across separate platforms for ecommerce, point of sale (POS), and warehouse management, creating gaps where products exist physically but appear unavailable digitally.
Unlike external supply chain disruptions, inefficient inventory-management practices are internal, controllable factors. Tracking finished goods through unified systems addresses the underlying issue rather than treating symptoms.
Supplier issues
Retailers depend on supplier reliability and flexibility to maintain consistent product availability, but vendor relationships introduce variables outside your direct control. Even strong supplier partnerships face challenges that can disrupt inventory flow and create stockouts:
- Contract negotiation delays: When your initial supplier contract expires, and new pricing negotiations extend for days or weeks, you may hesitate to place orders under uncertain terms. This affects how quickly you receive inventory and threatens product availability for items approaching stockout levels.
- Minimum order quantity (MOQ) constraints: If your supplier requires 200-unit orders but you only need 50 units urgently to bridge a gap, you must choose between a stockout and excess inventory.
- Limited supplier diversification: Retailers have limited supplier choices, which means a problem with one vendor can't be quickly resolved by switching to alternatives.
- Lead-time inconsistency: The same supplier delivers in two weeks one time and five weeks the next, making reliable reorder point calculations nearly impossible.
These supplier and vendor reliability issues require strong relationships and clear communication to minimize their impact on product availability.
How to measure product availability: Three key metrics
Supply chain KPIs provide the visibility needed to identify problems before they become revenue-threatening stockouts, but product availability specifically requires three complementary metrics that each reveal different aspects of your inventory performance.
These metrics work together to create a complete picture: stockout rate shows how often you lose sales, on-shelf availability reveals accessibility issues, and inventory turnover indicates how efficiently you're converting stock into revenue.
Stockout rate
Stockout rate measures how often customers can't buy what they want because products are out of stock. It is a clear percentage that immediately demonstrates the cost of stockouts and helps you prioritize which products need more efficient inventory management.
This metric directly connects to lost revenue and shows whether your forecasting and replenishment processes are working effectively. Stockout rate also relates closely to fill rate—the percentage of customer orders you can fulfill from available stock—which retailers use alongside stockout tracking to measure order-fulfillment performance.
Here’s how to calculate stockout rate:
Formula: Stockout rate = (number of stockout instances ÷ total sales opportunities) x 100
Example: Imagine you had 100 customer orders for a specific t-shirt last month, but you could only fulfill 95 of them because you ran out of stock. Your stockout rate would be (5 unfulfilled orders ÷ 100 total orders) x 100 = 5%.
Although averages and optimal rates vary by industry, higher-than-usual stockout rates can signal problems with forecasting, reorder timing, or supplier reliability.
Aim to reduce stockout rates below your current baseline, prioritizing high-velocity and high-margin products.
On-shelf availability (OSA)
On-shelf availability measures whether customers on the sales floor can actually access the products recorded in your store’s inventory. This metric differs from stockout rate because a product might be in your back room but unavailable to shoppers browsing your store. This creates a stockout experience even though you technically have the inventory.
On-shelf availability is most critical for brick-and-mortar retailers because it assesses the final step in the availability chain. Products must move successfully from warehouse to store to shelf before customers can buy them, and OSA measures that last crucial link.
Here’s how to calculate OSA:
Formula: OSA = (number of products available on shelf ÷ total expected products on shelf) x 100
Example: Your inventory system shows you have 50 units of a popular candle in your store location. When you audit the floor, only 40 units are actually on the shelf—the other 10 units are sitting unprocessed in your back room. Your OSA would be (40 units on shelf / 50 expected units) x 100 = 80% OSA.
A low OSA can indicate process gaps between receiving inventory and making it purchaseable. It can also suggest execution problems with merchandising and restocking frequency, or communication issues between stock rooms.
Understanding inventory status across locations helps identify where products exist versus where they're accessible to customers.
Inventory turnover ratio
Inventory turnover ratio shows how efficiently you convert inventory into sales by measuring how many times you sell and replace your entire stock during a specific period. Inventory turnover connects product availability to financial performance, revealing whether you're maintaining optimal inventory levels or tying up too much capital in slow-moving products.
A high turnover rate indicates strong sales velocity and good cash flow, but may signal stockout risk if you're not replenishing fast enough to meet demand.
Meanwhile, low turnover shows excess capital tied up in inventory. This can increase carrying costs and obsolescence risk, as products sit unsold—often resulting in dead stock that requires markdowns.
Here’s how to calculate inventory turnover ratio:
Formula: Inventory turnover = cost of goods sold (COGS) ÷ average inventory value
Example: Your store sells $600,000 in products annually (COGS), and you maintain an average inventory value of $100,000 throughout the year. Your inventory turnover would be ($600,000 COGS ÷ $100,000 average inventory) = 6. This means you're selling and replacing your entire inventory six times per year, or approximately every two months.
Industry benchmarks vary significantly.For example, grocery retailers might see around 12 to 15 inventory turns per year, while furniture retailers often target around three to four turns due to higher price points and longer sales cycles.
Balance is essential because optimal turnover depends on your product category, margin structure, and supplier lead times. For context, compare your inventory turnover to your stock-to-sales ratio, a more immediate measure of inventory position.
How to improve product availability
Measuring product availability can reveal problems, but solving them requires targeted strategies that address the root causes. The most effective approach balances stockout prevention tactics with operational practices that catch issues before they impact customers.
Conduct regular inventory audits
Regular audits catch discrepancies between recorded and actual inventory quantities before they cause unexpected stockouts. When your system shows 500 products but physical counts reveal only 450, that 50-unit gap means items will become unavailable sooner than anticipated.
Inventory shrinkage—from internal theft, shoplifting, or return fraud—creates discrepancies that erode product availability over time. Addressing shrinkage protects future inventory levels and prevents a compounding effect, where small losses accumulate into significant stockouts.
Compared with full physical inventories, where you count everything at once on a quarterly basis, cycle counting—continuously auditing small portions of inventory—catches problems faster because you audit high-value or fast-moving items weekly.
Inventory-management technology can help eliminate manual counting errors and accelerate the audit process through automation:
- Barcodes store product information that updates your inventory-management system instantly when scanned during cycle counts or at checkout.
- RFID tags enable rapid scanning of multiple items simultaneously, reducing audit time from hours to minutes.
- Real-time synchronization ensures your system accounts for each scan immediately, eliminating lag between physical counts and recorded quantities.
💡Pro tip: Shopify lets you track inventory quantities by location and unifies this data in a central operating system, so you'll never oversell items that are out of stock or make promises based on inaccurate availability data.
Configure automated reordering
Automated reordering eliminates the timing guesswork that causes either overstocking or stockouts. Place purchase orders too early, and you tie up capital while paying unnecessary carrying costs. Place them too late, and products become unavailable before replenishment arrives.
Just-in-time (JIT) inventory management defines an optimal reorder point where you order new products precisely when needed to maintain availability without holding excess stock. The calculation considers your average sales velocity, supplier lead times, and desired safety stock buffer to account for demand variability or delivery delays. When inventory quantities drop into low stock territory, your inventory-management tool automatically triggers reordering before stockouts occur.
Automation particularly benefits retailers managing hundreds or thousands of SKUs, where manual reorder tracking becomes impossible to maintain consistently across your entire catalog.
Implement demand-based forecasting
Accurate forecasting aligns inventory investments with actual customer demand to prevent both stockouts and overstock.
Shopify's demand-forecasting tools leverage unified customer and inventory data for accurate predictions. Shopify helps retailers optimize inventory levels by analyzing sales trends, seasonality, and consumer behavior across all sales channels. With stock management based on real-time data, you can respond to customer demand while keeping inventory costs under control.
An accurate demand plan has other benefits. When manufacturers know your projected volumes weeks or months ahead, they can reserve capacity and raw materials, reducing production delays. Demand planning also prevents overproduction. Retailers relying on dropshipping inventory particularly benefit from demand-based forecasting, since they can't control supplier stock levels directly and need accurate projections to coordinate with vendors.
Maintain strong supplier relationships
Your ability to maintain a continuous supply hinges on your relationships with suppliers. When they feel valued, vendors can be more willing to contribute solutions to challenges that threaten product availability.
For example, say you miscalculated demand and sold your denim jeans inventory faster than forecast. Your supplier's standard lead time is two weeks for new production runs, but you need inventory within days to prevent a complete stockout during peak selling season. A strong relationship with your supplier might make it easier to negotiate a solution.
One way to maintain vendor relationships is through supplier scorecards, where you track performance on lead-time consistency, quality standards, and responsiveness. This data-driven approach identifies which suppliers deserve deeper partnerships and which need backups and alternatives. Diversifying your suppliers for critical products gives you fallback options when primary suppliers face capacity constraints or quality issues—though keep in mind that relationships can suffer when orders are spread too thin across too many vendors.
Regular communication, transparent forecasting, and fair negotiations during contract renewals build the trust that translates into flexibility when product availability challenges arise.
Streamline returns logistics
In 2025, consumers returned 24.5% of their ecommerce purchases and 8.7% of in-store buys. Each day a returned product spends in processing limbo represents a lost sales opportunity, so it’s worth doing what you can to speed up the process.
Tactics to accelerate returns processing include:
- Customer-initiated returns: Use online portals to eliminate communication delays from email-based returns and immediately notify your team when products are heading back for restocking.
- Barcode and RFID scanners: Update your inventory-management system the moment returned products pass inspection, restoring availability within minutes rather than waiting for end-of-day batch processing.
- Cross-channel returns: Allow customers to return products to their nearest store regardless of purchase location, accelerating restocks by eliminating shipping delays. Products become available at that store location immediately after processing.
Treating returns as availability recovery rather than just customer service transforms them from operational hassles into inventory assets that can generate new sales within hours instead of days.
What to do when a product is unavailable in-store
When stockouts occur despite your best prevention efforts, the next sale depends on how quickly you offer alternatives. Instead of accepting lost revenue, try these tactics:
- Show alternative sales channels: Just because an item is out of stock at one location doesn't mean it's completely unavailable across your retail network. Check all locations to show customers whether they can order in-store pickup at nearby stores. Alternatively, use ship-to-customer on Shopify POS to take a customer's order in-store and ship it directly from another store location or warehouse. This approach captures sales that would otherwise walk out the door while turning stockout situations into omnichannel fulfillment opportunities.
- Allow back orders: Enable customers to purchase products even when they're currently out of stock by accepting back orders that you'll fulfill when inventory arrives. Back orders work particularly well for loyal customers willing to wait for specific products; just be clear that there will be a delay between paying for an order and receiving it. Preorders serve a similar purpose, allowing you to accept orders for upcoming product launches before inventory arrives. Manage these processes in the Shopify bulk editor by unchecking the “Continue selling when out of stock” option for your products. Any back orders are then routed to your Orders tab to fulfill when they’re back in stock.
- Use "back in stock" notification apps: For customers who only want to pay for products they’ll receive immediately, apps like Notify can collect their email addresses and notify them when their desired products restock. Bonus: You can use the captured emails for remarketing campaigns.
- Hide product listings strategically: For products that are temporarily or permanently unavailable, customize visibility by sales channel through your inventory settings or Shopify App Store apps. For example, an item might be available online and in the Shop app but temporarily removed from your POS system. This approach works particularly well for discontinued products.
Improve your inventory management with Shopify
Shopify's unified data model consolidates inventory data across all sales channels into a single back end that updates in real time, ensuring accuracy whether customers shop online, in physical stores, or through third-party marketplaces.
This centralized approach addresses core availability challenges:
- Real-time synchronization: Prevent stockouts caused by delayed updates between systems
- Cross-location visibility: Enables retail associates to check inventory across your entire network instantly, transforming stockouts into fulfillment opportunities rather than lost sales
- Automated reorder triggers: Eliminate counting errors and use accurate, unified data to inform your reorder points
When your inventory data is unified in a single back end, you can blend different channels to serve omnichannel customers. Retail associates can confidently say, “This product is unavailable in this store, but we have five in stock in a store that’s a 10-minute walk away—I can reserve that for you now. Or, we can place your order right now and ship it directly to your home.”
Product availability FAQ
What is meant by product availability?
Product availability refers to whether a particular item is in stock and accessible for customers to purchase when they want it. It ensures that supply meets demand and helps retailers meet customer expectations at the point of purchase, whether shoppers are browsing in physical stores, ordering online, or checking inventory through other sales channels.
How is product availability measured?
Product availability is measured using three complementary metrics that each reveal different performance aspects:
- Stockout rate: Shows how often customers can't complete purchases because products are out of stock
- On-shelf availability (OSA): Measures whether products physically present in stores are actually accessible to customers on sales floors
- Inventory turnover ratio: Indicates how efficiently you convert inventory investments into sales by tracking how many times you sell and replace stock
Together, these metrics provide visibility into availability problems from multiple angles—lost sales opportunities, merchandising execution gaps, and overall inventory efficiency.
How do you ensure product availability?
To manage stock availability, follow these strategies:
- Monitor key availability metrics to identify problems before they cause stockouts.
- Use an inventory-management system that provides real-time visibility across all sales channels.
- Conduct regular audits to catch discrepancies between recorded and actual stock levels.
- Implement demand-based forecasting to align inventory with customer buying patterns.
- Maintain strong supplier relationships that provide support during challenges.
- Configure automated reordering to eliminate timing guesswork.
- Streamline the product returns process to restore inventory availability quickly.
