The True Cost of Stockouts

How Running Out of Inventory Hurts Both Brands and Retailers

Running out of stock isn’t just an inconvenience, it’s a profit killer and a relationship breaker. For both brands and retailers, stockouts have far-reaching consequences that go beyond a single missed sale. They damage relationships, hurt customer loyalty, and can cost businesses significantly in the long run. 

In this post, we’ll explore the impact of stockouts from both the brand and retailer perspectives, why relying on distributors or marketplaces often falls short, and suggest how you can offer a better solution. 

The Retailer’s Perspective – Lost Sales and Frustrated Customers

For retailers, a stockout is more than just an empty shelf. It’s a lost sale, a missed opportunity to meet customer demand, and a potential blow to their reputation. Retailers rely on consistent, reliable stock to keep customers coming back. When a retailer runs out of a popular product, it can drive their customers to competitors, breaking brand loyalty in the process.

Retailers lose an estimated $1 trillion globally each year due to out-of-stock items. What’s more, 30% of shoppers will go to a competitor if the item they want is unavailable, and 70% of those may not return.

Imagine a retailer who specializes in premium outdoor gear. If they run out of a top-selling line of hiking boots just as the peak hiking season starts, their customers will go elsewhere, possibly to a competitor who has the product in stock. This isn’t just a one-time loss. If the competitor offers a better customer experience, that customer might never return, costing the retailer significantly more over time.

Stockouts also create operational chaos. Retailers that rely on manual reorder processes or outdated systems can find themselves struggling to keep shelves stocked. The back-and-forth emails, forgotten orders, and clunky portals add unnecessary friction, frustrating both the retailer and their customers. In a market where convenience often wins (and is a reason as to why Amazon has grown so big), these inefficiencies can be costly.

The Brand’s Perspective – Missed Revenue and Margin Erosion

For brands, stockouts represent missed revenue, disappointed retail partners, and potentially lasting damage to their reputation. When a retailer can’t keep a brand’s product in stock, it’s the brand that ultimately suffers the most. Brands invest heavily in building customer loyalty, only to see those relationships eroded by stockouts that push their products off the shelves and into competitors’ hands.

The financial hit can be substantial. Research shows that stockouts can reduce a brand’s sales by up to 10%, and even more if the product is frequently purchased or part of a recurring order pattern. Not only do brands lose immediate sales, but they also risk losing long-term revenue if retailers decide to switch to more reliable suppliers.

This is especially true for brands that sell through a network of independent retailers, where relationships are often personal and built over years. Failing to support those relationships can lead to lost market share and reduced brand equity.

Why Distributors and Marketplaces Fall Short

When stockouts become a consistent problem, some brands turn to distributors or marketplaces to handle their reordering. While this can seem like an easy fix, it comes at a steep cost. Distributors typically take a 25%+ margin, significantly cutting into the brand’s profits. Even worse, brands lose control over their customer relationships.

With a distributor, brands often have little insight into where their products end up, making it hard to build loyalty or track customer behavior. Returns and customer issues are managed by the distributor, not the brand, leading to a fragmented customer experience that can hurt long-term loyalty. Adding to this, 80% of B2B buyers expect the same personalization and convenience as in B2C, something most distributors are not equipped to deliver.

Marketplaces come with their own challenges. While they can provide access to a broader audience, they also commoditize products, making it difficult for brands to stand out. The marketplace owns the customer data, controls the shopping experience, and typically takes a significant cut of every sale. This loss of control can be especially painful for brands trying to differentiate themselves in a crowded market.

How Vanik Solves This Problem

Vanik offers a smarter approach to reordering. Instead of relying on clunky manual processes or expensive middlemen, Vanik automates reorder reminders, reducing the risk of stockouts and keeping retailers stocked without the chaos. Vanik uses historical order data to personalize every reorder touchpoint, creating a more thoughtful, high-conversion experience that drives repeat business without the need for constant oversight.

Brands that use Vanik have seen reorder conversions increase by up to 30x compared to traditional email outreach. Because Vanik runs quietly in the background, brands can scale their wholesale efforts without adding operational overhead.

With Vanik, brands maintain ownership of their retailer relationships and avoid the trade-offs that come with distributors and marketplaces. It’s a “set and forget” solution that helps brands grow while staying in control.

Taking Back Control of the Relationship

In today’s competitive market, brands can’t afford to rely on passive, outdated reorder processes or give up control to third parties. Stockouts are costly, but they’re also avoidable with the right tools. Vanik helps brands stay top-of-mind with their retailers and keep shelves stocked without the headaches of traditional wholesale solutions.

Ready to see how Vanik can help your brand take back control of its retailer relationships? Get in touch to learn more.