Marketplace Stock Is in the System. It Is Not Available to Sell
A unit can sit in a system and still not be sellable. It may already be allocated, in transit, quarantined, or committed to another channel. The failure shows up at the handoff, when the same quantity moves from an ERP to an order system, a warehouse system, a marketplace and a dropship supplier, and only one of those files is current. IHL Group's 2026 Inventory Distortion Study put the cost of that gap at $1.7 trillion globally, or 6.2% of retail sales, down from 10.4% in 2021. Empty shelves alone account for $690.9 billion.
The Handoff Is Where the Count Breaks
Blaine Nielsen, president of retailers at Rithum, said in written comments following a query from The Supply Chainer that the biggest visibility gaps appear when inventory is spread across too many systems and partners. "They emerge at the handoffs when inventory data moves between an ERP, OMS, WMS, marketplaces and dropship suppliers." In marketplace and dropship models, stock has to move through many hands. That is where it falls out of sync. Inventory can be right in one system and outdated in another, which makes it hard to know not only where a product is, but whether it is available to sell. "In many cases, it 'exists' in a system but isn't sellable because it's already allocated, in transit, quarantined, or committed to another channel."
The impact, he said, is immediate: overselling, stockouts, delayed shipments and delivery promises that cannot be kept. A retailer can show an item as available online after a supplier has already committed that inventory to another order. A marketplace quantity can lag what is happening in the warehouse. The more distributed the commerce model, the more the count has to stay connected across every channel.
The same limit is already on the record in earlier coverage. In The Supply Chainer's piece on why visibility is not enough in WMS and TMS, Bruce Shields of ABS Tag & Title said: "Companies have invested significant capital in technology over the last several years, only to find that visibility does not fix execution challenges."
Confidence Is an Execution Problem
Nielsen separated operators who turn that visibility into a fulfillment decision from those who do not. The companies that do it well do not stop at the screen. When they trust the inventory position and the forecast, they can be more aggressive commercially, leaning into promotions and advertising where they know they can deliver. Companies that lack that confidence hold back, throttling marketing or padding safety stock, because they are afraid of overselling or missing a promise. "The best operators flip that dynamic: because they can see where inventory sits and reliably predict where demand is heading, they can match demand opportunities to available supply in real time and capture share that more hesitant competitors leave on the table."
The execution piece is what makes the confidence usable. Knowing where inventory is, he said, is not the same as rerouting an order, reallocating stock, or updating availability across channels the moment something shifts, so a promotion that takes off does not become an oversell or a stockout. The operators seeing the most value use connected data to decide where inventory should sit, which fulfillment partner should handle an order, and how to balance speed, cost and availability. AI can accelerate those calls when it is built into the day's work. The ones still struggling often have the same data. They lack the coordination, the workflows and the clear ownership to act on it quickly, so they play defense on inventory instead of going on offense for growth.
The Wall Street Journal reported in October 2025 that Ralph Lauren's finance chief said the decision to stockpile ahead of tariffs was not made lightly, a reminder that a higher on-hand count is a commercial choice, not proof the unit can be promised.
The Tradeoff Does Not Disappear
Nielsen said supply chain leaders are always balancing the same three pressures. Holding more inventory improves availability and raises cost. Positioning it closer to the customer can move the order faster and can lose efficiency. Focusing too hard on cost raises the risk of a stockout or slower fulfillment, and a network tuned too tightly for efficiency can increase split shipments or miss a service commitment.
AI, he said, makes those calls faster. It can weigh inventory levels, fulfillment costs, supplier performance and delivery commitments in real time, so a team can decide where to place stock and how to route the order. In practice that can mean a slightly more expensive fulfillment option to protect a delivery promise, shifting demand to another location when inventory is tight, or holding stock back for a higher-priority channel. "The tradeoffs never truly disappear - the goal will always aim to make better decisions that balance the customer experience with the operational and financial realities."
A connected file does not remove the choice between availability, speed and cost. It decides which of those the operator is willing to miss, before the marketplace has already sold the unit.
