What an Oversell Costs, Worked Out From One Call

The quotes below are from a recorded demo on April 23rd, 2026, as transcribed. The other person ran operations for a consumer goods brand and stays unnamed.

The demo ran 43 minutes, and listening back I spent a lot of it on the wrong thing.

I got their setup wrong in the first recap. “So you’re kind of four channels or three TikTok shops?” Four, counting Shopify once: their own retail stores, Shopify (a US store and a Canadian one), TikTok Shop, and Faire for wholesale. Online orders all came out of one warehouse, which in Shopify was one location with one pool of stock they called “000”.

Overselling was the first thing they raised. “It’s very common that we end up overselling by, you know, a thousand units on a channel or something like that.” Then pre-orders. Then what happens when a shipment lands short: “if we get 10,000 pieces of something that we’re backward on 30,000 units of pre orders, we’ll often fill TikTok first,” because TikTok has “huge penalties for shipping late” and “If you, if you don’t meet a commitment to TikTok, they’ll pull the plug on your shop.”

The demo

Our demo site takes a few minutes to start, so I opened one of our live sites while it loaded and walked through the dashboard and the orders table. They mentioned they didn’t do bundles. Then they mentioned split shipments: orders that mix in-stock and pre-order items go out in two parts, and “it’s kind of difficult to track how many times that order has been split.” I said I’d get back to that scenario. I got to partial dispatch later, but never to counting the splits.

The Needs Attention panel, from our demo data.

I wanted to show them which purchase order had released a backorder. That view is on the sales order, and it wasn’t there. “This is our new UI. So I don’t have that hooked up yet.” It had been on the old one. I moved on to dispatch rules instead.

There’s a setting that lets a sales order go to the shipping provider even if only some of it can ship. I asked whether they’d want that automatic. “Ideally we would make a game time decision.” So I unchecked it and filtered the orders to “can fulfill some items,” which is where you’d make that call and then fulfill in bulk. I couldn’t press the button, because dispatch was turned off on that site so it wouldn’t send anything to a real shipping provider.

Then they asked, “What about the pre allocation part where we’re looking at how many units each channel can sell?” They described it exactly. “There may be a hundred thousand pieces sitting in store. 000 In that location. But you can only see 20,000 pieces of it. And when you hit that 20k pieces sold, you’re done selling.”

I showed them the inventory sync settings, where sku.io can be the master of stock and you choose which warehouses feed each channel, and suggested moving stock into a virtual warehouse per channel. I said myself it wasn’t “super, you know the exact solution you want.” We got tangled on Shopify locations against sales channels. “We’re talking about two different things,” I said. Then I told them the long-term answer was to take TikTok and Faire out of Shopify and connect them directly, and a minute later admitted, “I’m going in two different directions.” They said, “We’re not trying to reinvent the wheel here. We put a lot of time into integrating Shopify and SAP.” I never showed them the buffer rule, which holds stock back from a channel per product.

The numbers

They came up near the end, back on split shipments. “We’re paying eight bucks a shipment right now. Right. And every time we ship a, you know, a $20 item that maybe has $10 margin built into it, you know,”

So every box costs them $8 against a $10 margin, and an oversold unit that gets backordered on a mixed order goes out in a box of its own. One that gets cancelled leaves nothing, and the card fee stays with the processor. How long each one takes someone to sort out never came up. This link opens the oversell calculator with a thousand of their $20 units in it, and you can change the rest.

Their price, margin and shipping cost, one unit at a time.

They ended the call early. “I’ll give you back seven minutes of your time here because I know you got to get ready, but I’ve got a couple more meetings to just look at a couple other platforms.” They didn’t buy.

If you want to see per-channel buffers on your own stock, book a time and I’ll show you. How sku.io publishes stock to each channel is here.