Overselling rarely happens because someone is careless. It happens because “stock on hand” and “stock you can promise” are two different numbers, and most systems only show the first. Stock reservation software closes that gap.
On hand vs available: The number that matters
| Figure | What it means |
|---|---|
| On hand | What is physically on the shelf |
| Reserved | Already promised to confirmed orders |
| Available | On hand minus reserved: what sales can safely promise |
| On order / in transit | Coming in from suppliers, not yet received |
If your salespeople only see “on hand”, every confirmed-but-undelivered order is invisible to them. Two people promise the same stock and one customer waits.
Three tools in stock reservation software that end overselling
1. reservation on order confirmation
When a sales order is confirmed, its stock is reserved. It is released when delivered or if the order is cancelled. Partial deliveries release only what shipped, so the rest stays protected.
2. a fair backorder queue
When stock is short, the order waits in a queue. When new stock arrives, waiting orders are filled in turn, oldest first. No favouritism, no forgotten customers.
3. early holds for key deals
Big project sales often start as quotations. Holding stock against a strong quotation, or letting a salesperson block stock for a named customer for a set period, keeps it there when the customer says yes.
Signs your reservation process is broken
- The warehouse discovers shortages while picking.
- Salespeople phone the store before every quote.
- Customers are told “delivered next week”, and it isn’t.
How Square Loop helps
Square Loop reserves stock automatically when a sales order is confirmed and releases it line by line as deliveries go out. Short orders join a backorder queue that fills in order when goods arrive. Optional quotation-level holds and manual stock blocks (a salesperson’s time-limited hold) protect stock for important deals. The Stock Status and Stock Reservations reports show on hand, reserved, available, on order and in transit for every item.
Frequently asked questions
What is stock reservation?
Setting aside stock for a confirmed order so it cannot be sold to anyone else until it is delivered or the order is cancelled.
What is a backorder?
An order, or part of one, that cannot be filled from current stock and waits until new stock arrives.
Promise only what you can deliver. See stock reservation in a free Square Loop demo.
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