- Circana
- 9h
- 4 min read
Table of Contents:
Empty shelf space is problematic for any manufacturer, but for SMBs, the impact is more immediate. Compared to large manufacturers with extensive product lines, an SMB might have only a few SKUs on the shelf or available in online storefronts, so even a single out-of-stock item represents a lost sales opportunity and an immediate hit to revenue.
SMBs face unique challenges in preventing stockouts, from comparatively limited production capacity, to less automated inventory management systems, to restricted access to real-time data that can lead to “phantom inventory” or misaligned stock levels. Smaller teams and fewer direct touchpoints with retailers make it harder to spot gaps quickly, as many brands are only able to secure a quarterly retailer meeting to discuss assortment and stockouts.
To prevent shoppers from switching to another brand or retailer when faced with an empty spot either in a physical store or online, SMBs can focus on strategies rooted in planning, collaboration, and agility. Cost‑effective tools that surface issues early and enable rapid action can help protect shelf presence and maintain sales momentum.
What Stockouts Mean for a Small Business Day to Day?
Every time a shelf goes empty or an online SKU drops to zero availability, it interrupts the rhythm of growth that SMBs work so hard to build. Daily impacts include lost sales, diminished customer trust, and potential brand erosion as shoppers turn to competitors.
Limited visibility into inventory levels delays restocking efforts, exacerbating the problem. For example, a local brand operating in a small number of stores can quickly feel the impact from a single out-of-stock (OOS). With fewer outlets driving total sales, even one missing SKU removes a meaningful share of weekly revenue and disrupts the signal retailers use to evaluate the brand’s performance.
Three Ways for SMBs to Reduce Out-of-Stock Risk
Make data a strategic equalizer
In an environment where direct influence or regular contact with retailers is limited, data becomes a powerful tool for an SMB to combat stockouts. Insights elevate conversations from simple problem reporting to collaborative, data-backed strategies that foster credibility and trust.
Most SMBs don’t need custom, enterprise-level datasets. In practice, the essential building blocks for understanding stockouts are:
Store-level inventory
Distribution center (DC) stock levels
Sales velocity trends
With this core information, a small- or medium-sized company can anticipate demand shifts and identify problems before they escalate. For instance, a simple analysis can flag stores with inventory on hand but no recent sales, a classic sign of products stuck in the backroom. On the other hand, they can also identify stores with no inventory and no replenishment. Such insights reduce on-shelf problems and, on a broader level, transform retailer conversations into productive discussions about maximizing shared revenue.
Regularly monitor data for priority retailers and compare in-stock performance to key competitors
Staying visible to retailers and capturing consumer attention is critical for smaller brands. Leveraging holistic data that provides a continuously updated view of OOS’s across markets and locations helps them understand:
How their in-stock rates compare to the category
Where specific stores or markets show higher-than-average out-of-stocks
How category competitors are performing and where opportunity gaps exist
This level of insight ensures SMBs keep items in stock so they stay front of mind with retailers and top of mind with consumers.
Strengthen retailer collaboration
Because retailers prioritize vendors that drive the most business, SMBs must work smarter to build strong, collaborative relationships. They can create a strong foundation of trust by consistently securing on-time replenishment and showing that they are familiar with the retailer’s promotional cadence and execution windows.
Ultimately, serving as an insights-led partner on a regular (and even daily) basis demonstrates to retail partners that stocking a product from a small or mid-sized supplier leads to more value for both the brand and the retailer. An SMB can use inventory and sales data to prioritize high-value SKUs and prove its importance to the retailer's category sales.
A smaller business can also approach retail partners with insights that help them, such as identifying stores with chronic out-of-stocks on a certain product.
Scalability, too, is as crucial to retail partners as it is to SMBs. A common failure point for growing brands is the inability to meet surging demand after a successful launch. Retailers must trust that their partners can grow with them, making production capacity and supply chain flexibility critical. Before expanding, a smaller brand should demonstrate that it can handle larger order volumes, meet standard lead times, and supply multiple distribution centers.
A Proactive Approach to Product Availability
SMBs are resilient, ambitious, and consistently pushing the envelope. Preventing stockouts is another area where they can excel by pairing agility with the right tools. By using data to stay ahead of supply chain shifts, and actively collaborating with retail partners, these businesses can protect their brand's presence on the shelf and online. As a trusted partner, Circana supports this effort with Liquid Data Go® – a solution built specifically for growing brands that need fast, actionable insights. It’s built-in out‑of‑stock capabilities help brands understand in‑stock performance across their brand and category, identify retail partners that need support, and answer critical questions such as: What areas have a higher or lower in‑stock percentage?; How does my in‑stock performance compare to key competitors?; and How are my in‑stock retailers trending over time?
With pre-built reports that cover sales, share, pricing, promotion, and distribution metrics, SMBs can quickly uncover gaps – including issues at the store level – and take targeted interventions such as adjusted allocations or expedited shipments. From a bigger-picture perspective, SMBs can rely on Liquid Data Go to track inventory for multiple products over time and validate their expansion plans with clear, insightful data.
