Cash flow

Overstocked and out of stock at the same time

The warehouse is full and the account is thin, and still the products that actually sell keep going dark. That is not two problems. It is one, seen from both ends.

Marcus VolstedCo-founder, Restocio Published 10 October 20267 min read

If your store is overstocked and out of stock at the same time, you have one problem, not two. Too much of your money is sitting in products that do not sell, so there is not enough left to keep buying the ones that do. The full shelves and the empty ones are the same decision seen from opposite ends, and treating them as separate faults is how a store fixes one by making the other worse.

How both happen at once

Every purchase order is a decision about where a limited amount of money goes. When a few thousand units of a slow product land, the cash that paid for them is gone for as long as those units take to sell, and for a slow product that can be most of a year. That same cash is what would have bought the next order of your fastest product when its deadline came round. It did not, because it was already sitting on a shelf. The fast product runs out because its money was spent somewhere else first.

Then the shelf starts working against you on its own. Products that sell leave the warehouse. Products that do not sell stay. Week after week, with nobody deciding anything, what you hold becomes more and more made of the things that do not move, and each new order lands on top of what never left. That is how the stock figure in the accounts can rise while sales fall. The warehouse is not full of inventory in general. It is full of the inventory nobody wanted, because that is the only kind that stays.

There is a second reason the best sellers specifically are the ones that go dark, and it is a measurement trap rather than a money one. A product that keeps running out looks slower in your sales reports than it really is, so its next order is smaller, so it runs out sooner. The slow movers never run out, so their reports are always accurate. That loop belongs to how to stop running out of stock, which explains it properly. Here it is enough to know it pushes in the same direction as the cash.

Why the usual numbers hide it

Total stock value is an average over products that need opposite treatment. A warehouse holding a year of one product and four days of another can report a healthy total, and the total is what most stores look at. The bank balance is no better: it says money is tight without saying which products are holding it. Neither figure points at the row that is overbought or the row that is about to go dark. You have to look per product, and in days rather than units, since a unit count says nothing about how long it lasts. Days of stock is that measure, and it has a page of its own because the right figure depends on how far your goods travel.

Which page owns which half

Each thing you noticed has a page on this site that explains its fix properly. This one tells you which is which.

What you notice	What is actually happening	Where the fix is explained
The stock figure climbs while sales are flat or falling	A few slow products were bought too deep, often in one or two confident orders, and they pile up because they never leave	Dead stock, and how to spot it while it is still worth something
Best sellers keep going dark	The products that move are ordered too late or too small, and every stockout makes the next order smaller	How to stop running out of stock
The store is profitable and the account is still empty	The cash left months before the sale and is coming back one unit at a time, slowest from the overbought rows	Profitable on paper, empty at the bank
Every product gets the same buffer and the same reorder habit	Attention is spread evenly, so the few products carrying most of the value are handled like the long tail	ABC analysis, and where the letters stop helping

Fix it as one transfer, not two repairs

The reason to see it as one problem is that both halves are fixed with the same money. Cash freed from the slow side is what funds the deadlines on the fast side. Fix only one half and the problem has not gone, it has moved: cut ordering across the board to protect the bank account and the best sellers go dark more often, buy generously to end the stockouts and the warehouse fills further. So the order matters. Stop reordering the overbought rows first, because not ordering is free and takes effect the day you decide it. Then put the money that stops flowing into them onto the products that keep running out, ordered at their deadline rather than when the shelf looks thin. The steps, with a threshold to argue from, are in the cash post, and the deadline itself is worked through in the Shopify replenishment guide.

When it is not this

Two situations look identical from the outside and are not an allocation problem, and this page would send you the wrong way on both.

If Shopify says a product is in stock and the warehouse cannot find it, that stockout is a counting problem, and reallocating money does nothing for a record that has drifted from the shelf. How that happens at receiving is in where Shopify's count drifts when goods arrive.

The other is sales falling across the whole catalogue rather than on a few rows. Then the rising stock figure is demand telling you something, and moving money between products will not bring the customers back. That is a marketing or product question, and there is no page on this site that answers it, which is worth saying plainly rather than stretching the diagnosis to fit.

One limit on this page itself. It cannot tell you which half is bigger in your store, or how much money the overbought rows are holding. Only ranking your own products by days of stock does that, which takes a sales export and a spreadsheet. Restocio shows that figure per product, with the order deadline as a countdown, which is the view this page has been describing. It does not clear stock you already overbought, and it will not move the money between products for you either: ordering within a cash limit is on the public roadmap under consideration, not promised. The decision about which rows to stop stays yours.

Common questions

How can a store be overstocked and out of stock at the same time?

Because stock is not one pile. A few products were bought too deep and sit on the shelf for months, and the money that paid for them is the money that should have bought the next order of the products that sell. Totals hide it, since a warehouse holding a year of one product and four days of another reports a healthy average. Look per product, in days of stock, and the two groups separate at once.

Why is my stock value going up while sales are going down?

Because the products that sell leave the warehouse and the products that do not sell stay. Every reorder then lands on a shelf already tilted toward the slow ones, so the value climbs while the sales come from a shrinking share of it. If sales are only falling on a few rows while the rest hold up, that is the allocation pattern on this page. If they are falling across the whole catalogue, it is a demand problem, and moving money between products will not fix it.

Which should I fix first, the overstock or the stockouts?

The overstock, because the fix is to stop reordering those rows, which costs nothing and takes effect the day you decide it. The cash that stops going into them is what pays for the best sellers' orders at their deadline. Doing it the other way round, buying more of the winners first, only works if you have spare money, and a store with spare money is not usually the one asking.

Is being overstocked and out of stock a forecasting problem?

Mostly not. Better forecasting trims the edges, but a store can forecast every product reasonably well and still end up here, because the money was committed to the wrong rows in one or two large orders, often to meet a supplier minimum. The decision that creates the pattern is how deep to buy each product, and that is an ordering habit rather than a prediction.

Marcus Volsted

Co-founder, Restocio

Marcus co-founded Restocio and works on it daily with a Swedish importer who plans their purchasing in it every working day. Restocio is built in Sweden by two founders, one Swedish and one Danish, and Marcus is the Danish one. Why we are building it.