5 Simple Inventory Rules That Stop You From Running Out of Stock

Skip the complicated formulas – here’s what actually works for growing online stores

Running an online store and constantly worried about running out of your best sellers? Or maybe you’re sitting on too much inventory that’s not moving? You’re not alone. According to Shopify’s inventory management guide, most business owners struggle with inventory because they think it’s more complicated than it actually is.

Here are five straightforward rules that will fix your inventory problems without needing a math degree.

Rule 1: The 80/20 Product Rule (Focus on Your Money Makers)

What it means: 20% of your products probably make 80% of your money.

This concept, known as the Pareto Principle, applies to almost every business and is one of the most powerful tools for prioritizing your efforts.

What to do:

• Look at your sales from last year

• Find your top 20% best-selling products

• Never let these run out of stock – ever

• Check these weekly, not monthly

• The other 80% of products? Check them monthly or quarterly

Why it works: Instead of trying to manage everything perfectly, you focus your energy on the products that actually pay your bills.

Rule 2: Always Keep “Just in Case” Stock

What it means: Always order more than you think you’ll need.

As Harvard Business Review notes, it’s better to have a little too much than to lose sales because you’re out of stock. Lost customers often don’t come back, and the cost of stockouts usually exceeds the cost of carrying a bit of extra inventory.

What to do:

• For your best sellers: Keep 2-4 weeks extra stock

• For seasonal items: Keep 4-6 weeks extra before busy seasons

• For slow movers: Keep 6-8 weeks extra (they’re harder to reorder quickly)

Why it works: It’s better to have a little too much than to lose sales because you’re out of stock. Lost customers often don’t come back.

Rule 3: Set Up “Low Stock” Alerts

What it means: Get notified before you run out, not after.

What to do:

• Set alerts when you have 2-3 weeks of stock left

• For your top sellers, set alerts at 1 week remaining

• When you get an alert, reorder immediately

• Don’t wait to “think about it” – just reorder

Why it works: By the time you notice you’re running low, it’s usually too late to reorder without running out completely.

Rule 4: Look at Last Month to Predict Next Month

What it means: Your best prediction tool is your recent sales history.

Simple demand forecasting, as explained by the U.S. Small Business Administration, starts with understanding your sales patterns rather than complex formulas.

What to do:

• Look at what you sold last month

• If sales are growing, add 10-20% more

• If you’re planning a sale or promotion, double your normal order

• Before holidays or busy seasons, look at last year’s numbers

Why it works: You don’t need fancy software to predict the future – your recent sales tell you most of what you need to know.

Rule 5: Order Smart Quantities

What it means: Don’t order one piece at a time, but don’t order a year’s worth either.

What to do:

• Order 1-3 months worth of stock at a time

• For your best sellers: Order monthly

• For steady sellers: Order every 2-3 months

• For slow movers: Order every 3-6 months

Why it works: This balances having enough stock with not tying up all your money in inventory.

The Technology That Makes This Easy

Here’s the truth: You can’t manage growing inventory with spreadsheets. According to McKinsey research on retail technology, modern businesses need automated systems to manage growing complexity effectively.

As EIZ Technology shows with their Lofko platform, modern businesses need systems that automatically track stock levels, send alerts, and help make reordering decisions.

What good inventory software should do:

• Show you stock levels across all your sales channels in real-time

• Send automatic alerts when you’re running low

• Help you see which products are selling fast vs. slow

• Make reordering as simple as clicking a button

Red flags in your current system:

• You’re manually updating spreadsheets daily

• You’ve oversold products because channels weren’t synced

• You spend more than 30 minutes a day managing inventory

• You’ve run out of best sellers in the last 3 months

The National Retail Federation reports that inventory management errors cost retailers billions annually in lost sales and excess carrying costs – mistakes that proper systems can easily prevent.

Start This Week

Pick one rule and implement it this week:

Easiest to start: Set up low stock alerts for your top 10 products
Biggest impact: Do the 80/20 analysis to identify your money makers
Most time-saving: Stop managing every product the same way

Remember, inventory management isn’t about perfection – it’s about having the right products available when customers want them, without tying up all your cash in slow-moving stock.

The most successful online stores keep it simple and focus on what actually drives sales. Which rule will you implement first?