The Complete Guide to Stockout Prevention for Small-Batch Manufacturers

You just launched your new candle scent. The Instagram post goes up, orders start rolling in, and then—two days later—you’re sold out. Not just on Shopify, but on Etsy too because you forgot to update it manually. Now you’re issuing refunds, responding to frustrated DMs, and eating marketplace fees.

Sound familiar?

Stockouts aren’t just inconvenient. They cost you real money: lost sales today, lost customers tomorrow, wasted time fixing problems, and platform penalties. But here’s the good news—most stockouts are preventable with the right systems in place.

This guide walks through exactly what causes stockouts in handmade businesses and gives you seven proven strategies to prevent them. We’ll also show you how tools like our free Stockout & Lost Sales Calculator help you measure the impact, and how Craftybase Stock Push keeps your Etsy and Shopify quantities aligned automatically—no spreadsheets required.

What causes stockouts in handmade businesses?

Unlike big retailers who just order more from a warehouse, small-batch manufacturers face unique challenges that lead to stockouts:

Production delays: Your batch capacity is limited. Soap needs to cure for 4-6 weeks. Candles need cooling time. Your kiln broke. You can only make so much in a day, and when demand spikes, catching up takes time.

Supplier issues: Your favorite fragrance oil is out of stock for three weeks. Your jar supplier raised their minimum order quantity. Shipping delays from overseas. Labels are backordered. One missing component can halt your entire production.

Demand spikes: A viral TikTok, a seasonal rush, an influencer mention, or a successful product launch can drain your inventory faster than you planned. These are great problems to have—unless you run out.

Poor forecasting and visibility: If you’re tracking inventory in spreadsheets, you’re always looking at yesterday’s numbers. Without bills of materials (BOMs), you don’t know that you’re about to run out of wicks even though you have plenty of wax. You can’t see the full picture.

Channel misalignment: You sell the last lavender soap on Shopify, but the listing is still active on Etsy. Someone buys it there. Now you’re out of stock and facing a refund—or a rushed scramble to make one more batch just for that order.

Tip: If you sell on multiple channels like Etsy and Shopify, treat Craftybase as your source of truth, then sync inventory out to your channels automatically with Stock Push.

The real cost of stockouts

When you run out of stock, you’re not just missing one sale. The ripple effects add up fast—and you’re not alone. Retailers worldwide lose an estimated $984 billion annually due to stockouts, with nearly 69% of online shoppers abandoning purchases when items are unavailable.

• Lost orders today: Every stockout is revenue you’ll never recover.
• Lost future customers: Disappointed buyers often don’t come back. That’s lost lifetime value.
• Platform penalties: Etsy penalizes late shipments and cancellations in search rankings. Shopify ad performance drops when products go out of stock.
• Time cost: Hours spent apologizing, issuing refunds, fixing inventory, and rushing orders eats into your actual making time.
• Fees and refunds: Marketplace transaction fees don’t get refunded. Payment processing fees are often non-refundable. You’re out money even when you cancel the order.

Want to see the real impact? Use our free Stockout & Lost Sales Calculator to estimate your monthly cost.

Quick example: Let’s say you have 6 oversold orders per month. Your average order value is $28. You spend 2 hours fixing issues at $35/hour. Fees and refunds cost about $3 per affected order.

• Lost sales: 6 × $28 = $168
• Fees/refunds: 6 × $3 = $18
• Time cost: 2 × $35 = $70
• Lost future revenue (10% churn): $168 × 0.10 = $17

Total monthly cost: $273. Annual impact: $3,276.

And that’s a conservative estimate. Scale that up with higher order volumes, and the numbers get painful fast.

7 proven strategies to prevent stockouts

Now let’s get practical. Here are the strategies that work for small-batch makers—tested and proven.

1. Set proper reorder points (ROP)

A reorder point tells you when to restock before you run out. It’s not a guess—it’s a calculation based on how fast you sell and how long it takes to restock.

The formula:

Reorder Point = (Average daily demand × Lead time in days) + Safety stock

Example:

• You sell 3 units per day on average
• Your supplier takes 10 days to deliver
• You keep 5 units as a safety buffer

ROP = (3 × 10) + 5 = 35 units

When your stock hits 35, you reorder. Simple.

In Craftybase, you can set reorder points for each SKU. The system will alert you when it’s time to restock, and you can see a clear view of what needs ordering without digging through spreadsheets.

Pro tip: Start with your top 20% of SKUs by sales volume. Get those dialed in first, then expand to the rest of your catalog.

Want more detail? Check out our full guide on how to calculate reorder points.

2. Track raw materials, not just finished goods

This is where most makers get tripped up. You know you have “10 candles” in stock, but do you have enough wax, wicks, jars, and labels to make 10 more?

If you’re only tracking finished goods, you’re flying blind. A sale deducts a candle, but it doesn’t tell you that you just used your last label or that you’re down to one jar.

Bills of materials (BOMs) solve this. A BOM lists every component needed to make one unit of a finished product. When you log a manufacture or a sale, Craftybase automatically deducts the right quantities of each raw material.

Now you can see:

• Which materials are running low
• What you can actually make with current stock
• Where supply chain bottlenecks will hit before they happen

Quick checklist:

• Confirm all your SKUs have BOMs in Craftybase
• Include everything: bases, additives, containers, labels, packaging
• Map substitutions (e.g., “vanilla fragrance A” or “vanilla fragrance B”)

Learn more about how to use bills of materials effectively.

3. Use safety stock calculations

Safety stock is your buffer against surprises—demand spikes, supplier delays, or production hiccups. It’s the extra inventory you keep on hand to avoid stockouts when things don’t go as planned.

The exact amount depends on:

• How much your sales vary week to week
• How reliable your suppliers are
• How long your lead times are
• What service level you want to maintain (e.g., 95% in-stock rate)

Plain-English approach:

Start with 1-2 weeks of extra inventory for your fast movers. If a product sells 10 units per week, keep 10-20 units as safety stock. Adjust based on experience.

For components with long or unreliable lead times (like specialty pigments or overseas suppliers), increase the buffer.

Practical advice:

• Apply safety stock to your top 20-30 SKUs first
• Focus on items with long lead times or high demand variability
• Review and adjust monthly based on actual stockout frequency

Want the full formula and deeper explanation? Read our guide on how to calculate safety stock.

4. Automate low-stock alerts (Shopify Flow + Craftybase)

Manual inventory checks don’t scale. You’re busy making products, fulfilling orders, and running your business. Automation ensures you get notified before you run out, not after.

For Shopify merchants: If you’re on Shopify Plus or Advanced, you can use Shopify Flow to set up automatic alerts:

• Trigger: Inventory level drops below a threshold (e.g., 5 units)
• Action: Send an email, create a Slack notification, tag the product as “low-stock,” or create a task in your project management tool

For Craftybase users: Craftybase tracks both raw materials and finished goods in real-time. You can set reorder points for each SKU, and the system will alert you when it’s time to restock. Combined with Stock Push, your Etsy and Shopify listings stay accurate automatically—no manual updates.

Why this matters: Alerts give you lead time. Instead of discovering you’re out of stock when a customer tries to buy, you get a heads-up while you still have time to reorder or adjust production schedules.

Check out all available integrations here.

5. Plan production based on historical data

Gut feel only gets you so far. To prevent stockouts consistently, you need to look at what actually happened over the last 60-90 days and use that to plan your next production runs.

Here’s how:

1. Review sales by SKU: Which products sold the most? Which were slow movers?
2. Identify seasonality: Do certain scents or styles spike in December? Do sales dip in summer?
3. Factor in lead times: If it takes 4 weeks to cure soap, you need to start that batch 4 weeks before you expect demand.
4. Create a rolling production schedule: Plan by collection or product line. “This week: restock candles. Next week: new soap batch. Week 3: restock packaging materials.”

Craftybase’s production scheduling tools let you see what needs to be made, when, and whether you have the materials to do it. You’re not guessing—you’re planning based on real data.

Pro tip: Separate your catalog into “make-to-stock” (evergreen best-sellers) and “make-to-order” (custom, long-tail, or slow movers). Keep stock on hand for the former; produce the latter only when ordered.

6. Build supplier relationships for faster restock

When you run low on a critical component, how fast can you get more? The answer often depends on your relationship with your suppliers.

Here’s what helps:

• Communicate your forecasts: Let suppliers know what you’ll need over the next 1-3 months. They can plan inventory for you and may offer better lead times.
• Keep alternates on file: If your main supplier runs out, can you source the same ingredient or component elsewhere? Keep a backup list.
• Negotiate lead times: For high-volume components, ask if your supplier can prioritize restocks or offer expedited shipping for critical orders.
• Go local when possible: Overseas suppliers are cheaper, but domestic suppliers cut weeks off your lead time. For time-sensitive components, local can be worth the premium.

Keep a “critical components” list: Track which materials you can’t make products without, along with:

• Supplier name and contact
• Minimum order quantity (MOQ)
• Typical lead time
• Alternate suppliers

When a stockout risk appears, you’ll know exactly who to call and what your options are.

7. Consider pre-orders for high-demand items

Pre-orders let you sell before you make, which smooths out demand spikes and gives you production lead time. They’re especially useful for:

• New product launches
• Seasonal drops (holiday scents, limited editions)
• Restocks of sold-out best-sellers

How to do it right:

• Set clear lead-time expectations: “Ships in 2-3 weeks” or “Available December 1st.” Don’t surprise customers with long waits.
• Cap order volume: Limit pre-orders to what you can realistically produce in the promised time.
• Provide production status updates: Send an email when the batch goes into production and when it ships. Transparency builds trust.
• Keep stock sync accurate: If you’re using Craftybase Stock Push, make sure pre-orders don’t oversell beyond your production cap. Treat pre-orders as committed inventory.

Pre-orders give you breathing room, reduce the risk of overproduction, and turn demand spikes from a crisis into a manageable production run.

Bringing it together

Preventing stockouts isn’t about one big fix—it’s about combining the right strategies into a system that works for your business:

• Reorder points tell you when to restock.
• Safety stock gives you a buffer against surprises.
• BOMs make sure you’re tracking materials, not just finished goods.
• Low-stock alerts give you early warnings before you run out.
• Stock Push keeps Etsy and Shopify in sync automatically—no spreadsheets, no manual updates.

Quick wins to get started today:

1. Pick your 5 best-selling SKUs.
2. Calculate and set reorder points for each.
3. Enable low-stock alerts in Craftybase or Shopify Flow.
4. Turn on Stock Push and test with draft review mode.
5. Schedule your next 2 weeks of production based on current stock levels and upcoming demand.

You don’t have to do it all at once. Start small, prove it works, then expand.

Ready to stop stockouts before they happen?

Frequently Asked Questions