Inventory glossary
What is Stockout?
Stockout is when you have zero units of a product available to sell and a customer wants to buy it.
A stockout means lost sales right now and possibly lost sales later, because customers who find the item unavailable may buy it elsewhere and not come back. For stores with a few bestsellers driving most revenue, even a few days of stockout on a top SKU can be a real dent in monthly sales.
To manage stockouts, track how many days of stock you have left for each variant and compare that to how long your supplier takes to deliver more. If your remaining stock will run out before a new order arrives, you need to reorder now, not later. Keeping a small buffer of safety stock on your best sellers also protects you against sudden spikes in demand.
Example
A candle store sells 10 units a day of its lavender candle. It has 25 units left in stock. At this rate it has 2.5 days of stock. The supplier takes 10 days to deliver a new order. Since 2.5 days is far less than the 10-day lead time, the store will stock out unless it reorders immediately.
Common mistakes
- Waiting to reorder until stock actually hits zero instead of ordering before the lead time runs out.
- Only looking at total stock across all variants instead of checking each size or color separately.
- Ignoring demand spikes, like a product going viral or a seasonal rush, when deciding reorder timing.
Stockout and SteadyShelf
SteadyShelf forecasts sales per variant and flags the order-by date for each SKU so you can reorder before a stockout happens, based on your supplier's lead time.
Work it out for your own products with our free tool: Stockout cost calculator.
SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.
Related terms
Reorder point · Safety stock · Lead time · Lost sales · Service level
FAQ
What is the difference between a stockout and a backorder?
A stockout means the product is unavailable with no promise of when more will arrive. A backorder still lets customers order the product, with stock expected on a known future date.
Does a stockout always mean lost revenue?
Not always. Some customers wait for restock or buy a different product you sell, but many will buy from a competitor instead, which is why stockouts on bestsellers matter most.
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