Product
Overstock Is a Stockout in Reverse
A stockout empties a shelf loudly; overstock empties the bank account quietly — days of cover is the number that makes the second one visible.
Overstock never sets off an alarm
A stockout announces itself. The available quantity hits zero, the product page starts collecting "notify me" emails, the ad set keeps spending against a page that cannot convert, and someone raises it by Thursday. It is loud because it interrupts something.
Overstock does the opposite. The shelf looks full, fulfillment is smooth, nobody complains — because the failure mode of too much inventory is that everything appears to work. It just works with your money locked inside it. Excess inventory is stock beyond what demand will absorb over a given period, and its only symptom is an absence: the order you did not place for the product that would have sold.
The two are the same error with the sign flipped. A stockout costs you the sale you could not make. Overstock costs you every sale you could have made with the cash sitting in the wrong box. One shows up in the orders you lost; the other shows up only if you go looking.
| Signal | Stockout | Overstock |
|---|---|---|
| How you find out | A row hits zero and orders start failing | Nothing happens — the shelf looks healthy |
| Who tells you | Customers, support, your ad spend | Only a report you chose to open |
| How the cost lands | All at once, on the day | Slowly, every month it sits |
| What it does to cash | Cash you never collected | Cash already spent, still on a shelf |
| The fix | Expedite now, order earlier next cycle | Decide: defer, move, mark down |
Two failures, one balance sheet.
Days of cover is the unit that makes it visible
"400 units on hand" is not information. It is a comfortable number for one product and a two-year supply for another. The unit that makes overstock legible is time, not quantity.
days of cover = units on hand ÷ average daily sales
Two products, 100 units each. The one selling 30 a day has about 3 days of cover — it is a stockout in progress. The one selling 0.4 a day has 250 days of cover — it is capital parked until next year. Same shelf, same unit count, opposite problems. (Illustrative numbers.)
Two things follow from that division. First, the threshold is relative, not absolute. Days of cover only means something measured against your lead time, your reorder cycle, and the season you are heading into — ninety days of a swimwear variant in October reads very differently from ninety days of a staple. So a finding like "1 item holds 240+ days of stock," the example shown on the forecasting page, is a flag, not a verdict. It says look here. It does not say liquidate.
Second, the denominator has to be honest. If a product was unavailable for part of the period, its average daily sales includes days it could not physically sell, which depresses velocity and inflates days of cover — the arithmetic will accuse a perfectly healthy product of being overstocked. Assisty lets you exclude the days you were out of stock, so the forecast reflects real demand rather than the days you could not sell. Fix the denominator before you trust the flag.
What the flag is actually costing you
Holding inventory is not free. The industry rule of thumb puts the annual cost at roughly 20% to 30% of average inventory value — a figure attributed to the Institute for Supply Management and cited by Fishbowl — split across four buckets: capital committed, storage and handling, service costs such as insurance and taxes, and risk: obsolescence, damage, shrink, and the eventual markdown. Assisty does not compute a carrying-cost figure for you; treat the range as a way to size the problem, not as a line item in the app.
What matters for the decision is the shape of that cost, not its exact size. It accrues per unit of time, and expected recovery declines the longer stock sits — what is merely surplus today becomes obsolete later, and obsolete stock has far fewer buyers. Postponing the decision is therefore itself a decision with a price. The flag deserves an answer this cycle, even when the answer is "leave it."
What to do with it instead of reordering
There is a ladder here, roughly ordered by how much cash it returns per unit of effort — and the top of it is free.
Do not reorder. The cheapest correction is a suggestion you decline. In the Smart Buying Table you can also say "I have $1,000 to spend," and fit-to-budget defers the least urgent items and shows exactly what got cut; every change carries a was-to-now chip with per-row undo, and nothing is committed until you create the order.
Check whether demand is returning first. Ask "What if sales trend up 20%?" and the scenario applies instantly — the forecast and the reorder needs update in front of you. A variant holding 240 days of cover against a rising trend is a different object from one holding 240 days against a fading one, and only the second is really overstock.
Move it as it is. Bundle it with a fast seller, feature it, put it in an email. No margin surrendered, only attention.
Plan a markdown. On the Buying Table, the overstock finding for a slow variant carries a "Plan markdown" action alongside the number.
Recover the cash elsewhere. Supplier returns, wholesale and B2B, marketplaces, a liquidation company, donation — Shopify's guide to inventory liquidation catalogues the options, and notes that liquidating is worth it when the cash recovered exceeds what you would spend continuing to store and handle the goods.
| Step | What Assisty does |
|---|---|
| Forecast | Projects what each product — and each variant — will sell over the horizon you choose |
| Flag | Marks which items run out before the period ends and which are overstocked |
| Hand off | At-risk items carry straight into the Smart Buying Table, so seeing a risk and fixing it are the same motion |
| Rank | Surfaces findings by money at stake — including capital tied up in overstock |
| Act | Every finding carries its one-tap fix, such as "Plan markdown" on a 240-days-of-stock row |
| Prevent | Suggestions subtract incoming stock from open POs and cap at your maximum stock levels |
Where the overstock signal actually appears.
Stopping the next one before it lands
Most overstock is bought rather than accumulated, which is why the prevention lives in the suggestion itself. Every suggested quantity is computed from your sales velocity, lead times, and incoming stock, then rounded to your case sizes and capped at your maximum stock levels — and the suggestion's breakdown panel shows the subtraction, taking incoming units from open POs and on-hand units out of the cover-period requirement, so stock already in transit cannot be bought a second time. The rest is habit: read the overstock flags every cycle, with the same attention you give the stockout ones.