Magento really lacks one feature – e-mail notification for products going low in stock. Though there are paid modules that can do this, it really should be in core by default. Right, no need to worry, Magento’s built in RSS feed for products going out of stock will do too.
Admin -> System -> Configuration -> Inventory
Notify for Quantity Below — When the stock level of any product goes below this level, Magento will automatically notify you via RSS Feed. Note that 0 disables out-of-stock RSS notifications.
To get the RSS feed link, go to Catalog > Manage Products, and click the Notify Low Stock RSS link at the top of the page. You will be prompted to enter your User Name and Password, enter your admin credentials
You will be redirected to the RSS page. Copy paste this page link to your preferred RSS reader and your low product notification (out of stock notification) for Magento is working.