Zero Stock Strategy: What It Is and How It Works

One of the key goals of any retail business is to keep stock moving. When inventory turnover is at a healthy rate, cash flow remains strong, and storage costs stay low. Conversely, too much inventory can tie up capital, increase holding costs, and lead to markdowns.
This is where the zero stock strategy comes into play. When implemented well, this approach to inventory management can help retailers stay agile, reduce financial risk, and streamline operations without sacrificing customer demand.

What is the zero stock strategy?

The zero stock strategy is a retail model where businesses minimize on-hand inventory by relying on just-in-time fulfillment, dropshipping, or made-to-order production. This approach reduces overhead costs and risk while allowing brands to adapt quickly to changing demand.

How does the zero stock strategy work?

Retailers using the zero stock strategy leverage supplier partnerships, automation, and demand forecasting to fulfill orders only when a purchase is made. Instead of stocking products in warehouses, they route orders directly from manufacturers or third-party suppliers. The goal is to reduce storage needs and financial risk.
Think of it this way: Instead of stocking shelves in advance, retailers act as a bridge between customers and suppliers—only placing orders when demand arises.

Why retailers are embracing the zero stock model

Retailers are turning to zero stock to reduce costs, increase flexibility, and meet changing consumer expectations without the burden of excess inventory.

1. Lower overhead and financial risk

The zero stock approach eliminates the need for large inventory purchases, so retailers can free up capital and reduce the risks associated with unsold stock. With no excess inventory tying up resources, businesses can operate with lower storage costs, minimize markdowns, and improve cash flow—which then enables them to invest more in marketing, customer experience, and growth.
This shift is especially critical in today’s climate. In 2023 alone, the fashion industry produced between 2.5 billion and 5 billion items of excess stock, amounting to $70 billion to $140 billion in lost sales opportunities.
Overproduction is no longer just a cost issue—it’s a regulatory and reputational risk. Starting in 2025, brands in the EU will be required to report on unsold inventory under the Ecodesign for Sustainable Products Regulation, and it will become illegal to destroy excess stock in 2026.

2. More flexibility in product offerings.
Without warehousing constraints, retailers can expand their product catalogs without worrying about physical space or inventory management. This flexibility enables businesses to adapt quickly to market trends, introduce seasonal or limited-edition items, and serve niche audiences with specialized products without the burden of overstock or waste.

3. Ability to test new products without large commitments
The zero-stock model allows retailers to experiment with new products without making significant upfront investments. Brands can list items online and then fulfill orders on demand, which makes it easier (and less risky) to gauge customer interest before committing to bulk purchases.

CUSTOMER CONCERNS ABOUT ZEro STOCK

While the zero-stock model benefits retailers, customers may worry about longer wait times, unclear availability, and inconsistent fulfillment experiences. Consider the following.

Expectations around product availability and immediate gratification

Today’s consumers are used to instant purchases and fast shipping. When products aren’t immediately available, people may hesitate to buy. Without clear expectations on delivery times, businesses risk losing sales to competitors that offer same-day or next-day fulfillment. 
That’s why retailers embracing zero stock must ensure their messaging aligns with customer expectations. You need to maintain trust and loyalty by providing clear timelines, offering incentives for longer waits, and ensuring proactive customer communication.

Potential downsides (longer wait times, unexpected backorders)

The zero-stock approach gives retailers less control over inventory. Delays can occur due to supplier issues, shipping disruptions, or sudden demand spikes. This can lead to longer wait times, which can frustrate customers, especially if expected delivery dates aren’t communicated upfront. 

Transparency concerns—do customers know what they’re buying into?

Customers want to know when their order will arrive and where it’s coming from. If retailers don’t communicate fulfillment times and stock availability, shoppers may feel misled. Transparency in product pages, checkout messaging, and automated order updates can help set accurate expectations and prevent dissatisfaction. Being upfront about fulfillment timelines builds trust and reduces friction in the buying process.

Balancing efficiency and customer trust

Zero stock strategy can be a game changer for retailers looking to streamline their operations and reduce risk around inventory. That being said, it’s important to maintain transparency, set clear expectations, and ensure a seamless customer experience.
Here’s how. 

__ Promote clear and honest communication – Be upfront about fulfillment timelines on product pages and at checkout to set accurate customer expectations.

__ Implement real-time inventory and order tracking – Provide live updates on order status, estimated delivery times, and potential delays to keep customers informed.

__ Offer flexible fulfillment options – Offer pre-orders, priority shipping, or local pickup to give customers more control over their purchasing experience.

__ Establish reliable supplier partnerships – Work with dependable vendors and logistics providers to ensure smooth and timely fulfillment.

__ Beef up customer support readiness – Equip your support team with real-time order insights so they can proactively address customer inquiries and concerns.

__ Adopt AI-powered demand forecasting – Use data analytics and AI to predict demand and prevent stockouts or excessive delays.

__ Provide transparency about supply chain practices – Educate customers on the benefits of zero stock, such as reduced waste and sustainability, to align with their values.

Zero stock case studies: who’s doing it right?

1. Gymshark 

Gymshark, a UK-based fitness apparel brand, started as a dropshipping business, allowing it to scale rapidly without heavy inventory investments. By leveraging on-demand production and third-party logistics providers, Gymshark minimized storage costs while maintaining global fulfillment. The brand’s transparent communication about delivery timelines and seamless customer experience helped build trust, turning it into a multimillion-dollar business without owning a single warehouse in its early years.

2. Nordstrom Local 

Nordstrom Local are service-focused stores don’t carry traditional inventory. Instead, they serve as hubs for order pickup, returns, alterations, and personal styling. That said, customers who are looking to purchase clothes can browse products with the help of staff, place orders, and have items shipped directly to their homes or for later pickup.

3. Alo 

The athlesiure brand Alo occasionally hosts invite-only Sanctuary Events—immersive retail experiences that blend wellness, mindfulness, and fashion. These events offer VIP guests early access to preview and purchase upcoming collections before they officially launch. True to zero stock principles, these curated events feature a limited selection of products. This approach reduces excess inventory while elevating brand exclusivity and engagement through highly personalized, low-risk retail moments.

4. Lancôme Science Club

In April 2025, Lancôme turned its Champs-Élysées flagship into the Skin Science Club—a month-long, immersive pop-up dedicated to skincare innovation and personalized diagnostics. Visitors receive expert-led consultations, sampled cutting-edge products, and joined exclusive masterclasses. This kind of high-touch, limited-run event is an ideal candidate for zero stock startegies. By prioritizing experience over in-store inventory, brands like Lancôme can test interest, minimize overproduction, and build deeper customer connections—without the cost of carrying excess stock.

Bringing it all together

The zero stock strategy offers retailers a smart way to reduce overhead and stay agile, but success depends on clear communication and strong fulfillment processes. If you decide to go with this approach, you must leverage reliable suppliers and promote transparency across the supply chain.
When executed well, a zero stock approach can drive efficiency, boost profitability, and future-proof your business.
Whether you’re managing inventory the traditional way or implementing zero stock, having solid merchandising programs will help. With IWD’s advanced retail solutions, you can optimize product placement, enhance the shopping experience, and drive sales—no matter how you handle inventory.