Why Many Distributors Can’t Provide a 100% Order Fill Rate

Common challenges preventing distributors from achieving a 100% order fill rate and how these issues impact your business operations.

In the world of wholesale and distribution, businesses often strive for a perfect 100% order fill rate. This means that every item a customer orders is delivered in full, without any items being out of stock or delayed. However, many distributors fall short of this ideal, often leaving businesses waiting for products that are crucial to their operations. But why is it so difficult for distributors to consistently achieve a 100% order fill rate?

On average, companies typically maintain a fill rate of about 85%–95%, meaning that 5%–15% of orders might be incomplete, delayed, or missing products. While this may seem acceptable, those gaps can have a significant impact on your business. 

Let’s dive into some of the key reasons behind imperfect fill rates and how this impacts your business.

1. Supply Chain Disruptions

One of the most common reasons distributors struggle with fulfilling 100% of orders is the unpredictability of the supply chain. Delays in manufacturing, transportation bottlenecks, or unexpected shortages from suppliers can all cause stockouts. These disruptions are often outside the distributor's control, yet they have a direct impact on their ability to deliver orders in full.

For example, a delay in shipment from an overseas supplier could cause a distributor to run out of stock on key items, resulting in backorders and unfulfilled customer needs.

How This Affects Your Business:
When items are on backorder due to supply chain disruptions, you may need to find alternative suppliers or adjust your inventory, which can be time-consuming and costly. It can also lead to lost sales if customers can’t find what they’re looking for.

2. Inaccurate Demand Forecasting

Another challenge for distributors is accurately predicting customer demand. While many use sophisticated software and data analytics to forecast future needs, market trends and customer behavior can change unexpectedly. If demand for a particular product spikes, distributors may not have enough inventory to meet that surge, leading to stockouts and incomplete orders.

For instance, seasonal trends or an unexpected surge in popularity for a particular item can throw off even the most well-planned forecasts, leaving distributors scrambling to catch up.

How This Affects Your Business:
If you rely on specific products to meet customer demand, a distributor’s inability to forecast demand accurately can leave you understocked at critical times. This can impact customer satisfaction and your bottom line, especially during peak sales periods.

3. Limited Storage Capacity

Distributors often face the challenge of balancing inventory levels with storage capacity. Carrying too much stock can be risky, especially for perishable goods or items with fluctuating demand. As a result, many distributors limit the amount of inventory they keep on hand, opting for a “just-in-time” inventory approach. While this reduces storage costs, it also increases the likelihood of running out of stock if demand increases unexpectedly.

Additionally, when inventory levels are kept low, any delays in replenishing stock can quickly lead to incomplete orders.

How This Affects Your Business:
If your distributor runs low on stock due to limited storage space, you may experience delays in receiving products, which can disrupt your operations. You may also have to order from multiple suppliers to fill in the gaps, adding complexity to your inventory management process.

4. Manufacturer Shortages

Sometimes, the root of the problem lies with the manufacturers. A distributor may be ready to fulfill an order, but the manufacturer is experiencing a shortage of raw materials or labor, slowing down production. This creates a ripple effect that eventually impacts the distributor’s ability to deliver on time and in full.

For instance, if a key ingredient for a food product is unavailable or delayed, the manufacturer can’t meet production targets, leading to product shortages across the supply chain.

How This Affects Your Business:
A manufacturer’s inability to produce goods in time can lead to longer lead times and delays in receiving critical products, potentially forcing you to seek substitutes or delay your own customer deliveries.

5. Inefficient Inventory Management Systems

Not all distributors have state-of-the-art inventory management systems. If a distributor relies on outdated or inefficient systems, it can result in stock mismanagement, incorrect inventory counts, and delays in replenishing stock. Without accurate, real-time data on what’s available, distributors may unintentionally oversell products, leading to backorders and missed deliveries.

How This Affects Your Business:
When a distributor’s inventory system isn’t up to the task, you may experience inconsistencies between what’s shown as in stock and what’s actually available. This can create confusion and frustration when products you rely on aren’t delivered as promised.

6. Product Discontinuation or Changes

Sometimes, products are discontinued or undergo significant changes without much notice. This is particularly true in industries like food and beverage, where suppliers may stop producing certain items or change formulas due to regulatory requirements, ingredient availability, or market demand.

When products are unexpectedly discontinued or altered, distributors are left scrambling to find replacements or alternatives, often leading to gaps in product availability.

How This Affects Your Business:
Product discontinuation can leave you scrambling to find alternatives for popular or necessary items. This may disrupt your product offerings, and replacing items could involve additional costs and delays in finding suitable substitutes.

At GFM, We Strive for 99.9% Fill Rate

At GFM Wholesale, we understand the importance of order fulfillment and the impact it has on your business. While many distributors fall short of the mark, we work hard to maintain a 99.9% order fill rate, which is crucial for achieving our perfect order rate (POR). We believe that consistency and reliability are key to supporting your business and keeping your shelves fully stocked.

We achieve this through strong supplier relationships, transparent communication, and the use of advanced technology. Our real-time inventory tracking helps us avoid the pitfalls of outdated systems and keeps you informed of any potential issues before they arise.

Moreover, with no order minimums, you can order exactly what you need without worrying about overstocking or running into supply shortages. Our dedication to achieving a near-perfect fill rate ensures that you receive the products you need, on time and in full.

Learn more about GFM wholesale for stores and restaurants.