Frequently Asked Questions
What is a stockout?
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A stockout occurs when inventory for a product drops to zero, meaning you cannot fulfill customer orders. Stockouts lead to lost sales, lower customer satisfaction, and potential long-term revenue loss. For e-commerce businesses on Shopify or WooCommerce, stockouts can also hurt your search rankings as out-of-stock products get deprioritized.
How do you calculate days until stockout?
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Divide your current stock by your average daily sales. For example, if you have 150 units and sell 10 per day, you have approximately 15 days until stockout. This is a simplified calculation — in practice, demand can fluctuate, so you should also factor in safety stock and seasonal trends.
When should I reorder to avoid a stockout?
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Reorder when your remaining stock covers your lead time plus a safety buffer. If your lead time is 7 days and you sell 10 units/day, reorder when you have at least 100–120 units (lead time demand + 3–5 day buffer). The exact reorder point depends on demand variability and how critical the product is to your revenue.
How much does a stockout cost?
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Research shows stockouts cost retailers up to 4% of annual revenue. Beyond direct lost sales, stockouts damage brand loyalty — 21–43% of customers will switch to a competitor when their preferred product is out of stock. For a $1M/year e-commerce store, that could mean $40,000+ in annual losses from stockouts alone.