Why is Stock Control Vital to Your Business? Avoid Overstock and Stockouts

With a swift increase in effective ways to attract and retain customers recently, thanks to artificial intelligence (AI), it might be easy to overlook the products you connect with them through. It’s equally important to focus attention on managing existing stock, including inventory control and prediction. However, this too can be done with AI’s help, leaving you free to give more time to creatively evolving your business.

What is stock control?

Stock prediction and inventory control are an art of fine balance: preparing enough goods in situ to be able to meet customer demand without delay, while not having so many more that they tie up space and capital, cause avoidable holding costs, and risk remaining unsold. If you get the balance right, the return on investment in inventory can be maximised, and losses minimised, giving you success and longevity.

A great stock control system is at least as important for eCommerce as for a nuts-and-bolts high street shop. Optimal centralised control not only lets you keep costs down and profits up, but also:

  • works hand-in-hand with sales and marketing strategies and content to create more conversions with less time and effort
  • allowing preparation of the most effective marketing campaigns and design of loyalty programmes
  • gives your entire supply chain the information it needs for preparedness and efficient service

The importance of stock control

Too many companies limit the attention paid to stock to end-of-year manual audits. This is a high-risk error.

  1. How can you know whether you have the right quantities of the right products? This can negatively impact budget management.
  2. It risks stock being stored too long or sitting damaged, bumping cost and loss.
  3. Time is lost on unnecessary inventory management or other menial tasks.
  4. Sales are lost because there’s no ongoing, adjusted awareness of stock in hand. Opportunities occasioned by seasonality, trends, or changes in customer behaviour are lost, or chased too late. Lost sales or increased costs arise from overselling non-existent products, or overstocking redundant goods.
  5. Inefficient inventory control leads to higher storage and monitoring costs.

Improved inventory control means more efficient, and therefore profitable, commerce. This requires 24/7-365 prediction and control. The human means for making such predictions are often tuned averages, which don’t capture the dozens of variables that impact actual sales.

An AI system, on the other hand, can control hundreds of variables at great speeds and without difficulty. An automatic system run on machine learning AI keeps a weather eye on supply and demand, allows for optimised storage, provides insights for now-and-next decisions, and leaves employees freer to perfect relationships, interfaces, and customer journeys.

The benefits of Stock control

Let’s take a closer look at the benefits of an automatic stock control system: 

Protecting perishables with Stock Prediction

Obviously, such products generally have a shorter shelf-life than less perishable goods. You need to stop them from sitting unsold, degenerating or becoming damaged, resulting in stock shrinkage, i.e. stock loss, or dead stock. You can operate a Just In Time stock control system, carrying the minimum viable stock by ordering little and late, but this carries its own risks: you may take orders then find you’re understocked, leading to damaged customer retention and reputation. But having waste due to overstock is bad for sustainability and a company’s green metrics.

In Japan, over 2 trillion yen is lost each year to food waste through overstock. Its government has therefore created legislation to cut such waste and its costs in half by 2030. Many Japanese companies are employing predictive AI tools to help them meet this target. Sustainability is not only good business, but everyone’s responsibility. Sectors from airline food to garments also use machine learning AI to reduce their contributions to overstock waste while improving their own bottom lines.

With insights provided by stock control automation, you can estimate future demand and real needs for each product in your portfolio. AI undertakes predictive analysis of vast amounts of data, telling you what stock to order or not and when, and which to sell quickly through ‘kitting’ offers such as Buy One Get One Free. Kitting reduces overstock and dead stock, boosts average order value figures, and gives customers the great feeling of getting a bargain, so they’re more likely to return.

Automated control avoids overstock and non-rotating products that can be damaged or deteriorate. It also reduces storage costs and protects profit margins. Warehousing of stock is a variable cost which can always be improved.

Take beauty and pharmaceutical products, for example. While not perishable compared to consumables, they do carry expiry dates. If they’re not sold before expiration, they’re lost stock. If they sit for a long time, incurring ever-increasing storage costs, they may be sold at a loss even when they do sell.

Storing more efficiently frees up capital for investment and promotion of emerging products. It also reduces inventory costs, which results in a profit margin increase. 

Delivering desirables with a good inventory control


Just as you don’t want to sell products it turns out you don’t have, you don’t want to attract customers you then can’t satisfy. Loyalty increases when customers know you know what they need, perhaps even before they do. AI stock control both gives you a 360° view of each customer, offering insights into when they will buy again and what, but also suggests trends and seasonal demand.

It might be that a brand or specific product is gaining popularity, or that a certain natural component, material, style or concept is trending right now. With these insights, you know ahead of time which products will have higher rotation and which minimum inventory quantities need to be on hand to fulfill orders.

Companies can use this type of information to promote and deliver the most desirable goods in a timely and efficient way, increasing customer satisfaction and repurchase.

Easing experiences due to stock control

Specialist stock control software, especially when married with a customer engagement suite of software, gives swift, accurate sales and raw material forecasts. Such predictive analytics forecasts, applied to stock portfolio data, provide multiple benefits across an eCommerce company:

  • The sales department can make more accurate sales projections;
  • Purchasing can order raw material or product in line with actual future needs;
  • Finance has a better handle on cash flow;
  • Marketing has better-informed strategies, content, and outreach;
  • Management processes become as streamlined and integrated as the customer engagement and stock control software itself.


AI makes it possible to detect a sales trend for a particular item. It can then predict what sales are likely, highlight which customers are ready to buy again and have a purchase history, making the item an easy sell. It can also recommend how much stock to ready and inform pricing and marketing strategies for that item.  Some goods and their packaging can be expensive to store safely in mint condition, and trends change fast. Having a system that helps you take advantage of that trend equally fast with no leftovers is a no-brainer.


Excellent estimation

Inventory control does not only mean knowing what you have. You also need to know what you will need: how much you will sell and what and when you must buy. You can’t control cashflow or take advantage of fleeting sales opportunities if you don’t have that grip. By avoiding stockout of products that will have the highest turnover, a company ensures it doesn’t let steady sales slip along with its market reputation.

Taking Christmas as an example, in the past convenience and department stores watched for trending toys with a lot of press, then bought as many as cash flow and storage allowed, in the hopes they weren’t left with dead stock in the new year. They could sell overstock at reduced prices in post-Christmas sales, but this might result in profit loss or even selling below-cost. AI gives predictive insights that let you plan ahead to prevent such guesswork and resulting losses.

Scaling up with an accurate stock control

For a new business, manual inventory control might be manageable. But as business grows, multiple sales channels and suppliers, the speed of trends and interactions, demands and costs of physical storage and handling of stock, and the impossibility of tracking online fulfillment with offline methods, mean a brand cannot provide customers with transparency and consistency. You could end up with a warehouse full of decaying goods, while making promises to customers you can’t keep.

For a successful business to scale and grow a consistent and respected brand, it needs integrated software-run predictive stock control which:

  • Can perform accurate analysis of data on a daily basis
  • Optimises the logistical chain by giving advance notice of requirements and actions to all involved in it, including suppliers
  • Analyses overstocking, understocking, and fluctuations such as seasonality

We know that every item in your portfolio is unique. Book our Demand Planning Suite Demo and see for yourself how it allows you to analyse demand patterns as above, right down to SKU level, building demand profiles that lead to optimised sales forecasting models. The software can analyse total sales volume, sales frequency and quantity, and individual transactions, highlighting broader emerging trends, seasonality, and volatility.

Thanks to specialised stock control software, and the insights it provides, you get lower costs and losses, increased sales and satisfied customer bases, improved cash and workflows. Doing the math, higher profits + peace of mind = AI-powered positive progress.