# Stockout

A stockout is when a product a shopper wants is not available to buy, whether on the shelf, in the warehouse or online.

Also called: stock out, out of stock, OOS

- **Is:** A product a shopper wants that is not available to buy, on the shelf or online.
- **Costs:** The missed sale, shoppers who go elsewhere, and a sales history that understates demand.
- **Watch for:** Zero-sales days read as zero demand by the next forecast or range review.

## What it means for retail and category teams

Stockouts include the obvious empty shelf and less visible cases: stock in the back room but not on the shelf, stock the system records that nobody can find, or an online listing marked unavailable. Retailers track them through availability measures and through lines showing zero sales where demand would normally be expected.

## Why it matters

The cost is more than the missed sale. Some shoppers switch to another line, some go to a competitor, and some change where they shop. Stockouts also corrupt the sales history: a line that sold nothing while unavailable looks like a line nobody wants, and that flows into forecasts and range reviews unless it is corrected.

## Illustrative example

The business and figures are illustrative. None of it is customer data.

A coffee line sells about 12 bags a day at one store. It is unavailable from Thursday to Saturday and records zero sales on those three days. At its usual rate, that is 36 bags of unserved demand. The store's other coffees sold 10 more bags than usual over the same days, so about 26 sales left the store. The team flags the three days as unavailable so the next forecast does not read them as zero demand.

**One coffee line at one store, bags sold per day**

| | Mon | Tue | Wed | Thu | Fri | Sat | Sun |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Bags sold | 12 | 13 | 11 | 0 | 0 | 0 | 12 |
| Estimated demand while unavailable |  |  |  | 12 | 12 | 12 |  |

Three zero days are 36 bags of unserved demand, not three days nobody wanted it.

## Estimate lost sales from a stockout

Sales lost = normal units per day × days unavailable − extra units similar lines sold

An estimate at the normal rate of sale. It does not count shoppers who stop visiting after a gap, and it values every lost unit at this line's gross profit.

[Use the calculator](https://twelfth.ai/tools/stockout), [explore the worked examples](https://twelfth.ai/tools), [download the Excel / Google Sheets workbook](https://twelfth.ai/resources/retail-metrics-template.xlsx) or [download this metric's CSV template](https://twelfth.ai/resources/retail-csv/stockout.csv).

## Common questions

### How do you calculate lost sales from a stockout?

Multiply the line's normal daily rate of sale by the days it was unavailable, then subtract the extra sales similar lines made in the same store over those days. A line that sells 12 a day and is out for three days has 36 units of unserved demand; if similar lines sold 10 more than usual, about 26 sales left the store.

### What is the difference between a stockout and a backorder?

A stockout is a shopper wanting a product that is not available to buy. A backorder is an order accepted for stock that has not arrived yet, filled when it does. Taking backorders online turns some stockouts into delayed sales; an empty shelf in store usually loses the sale or moves it to another product.

### What causes stockouts?

The usual causes are a forecast that ran low, an order placed too late for the supplier's lead time, a supplier shortfall, a promotion that sold faster than planned, and stock that is in the building but not on the shelf. Inventory records that show stock nobody can find cause stockouts the system cannot see.

### Why do stockouts make forecasts worse?

A day with zero sales because the product was unavailable looks the same in sales data as a day nobody wanted it. If those days are not flagged, the next forecast learns a lower rate of sale, orders less, and makes the next stockout more likely.

## Related concepts

- [Lost demand](https://twelfth.ai/glossary/lost-demand): Estimate the sales the report could not record while the line was unavailable.
- [Weeks of cover](https://twelfth.ai/glossary/weeks-of-cover)
- [Replenishment](https://twelfth.ai/glossary/replenishment): Check whether ordering and delivery timing caused the gap.
- [Demand forecast](https://twelfth.ai/glossary/demand-forecast)

## Next step

### Find the gap behind a stockout

Bring a product that keeps going unavailable. We can walk through the sales history, stock position and the demand it may be hiding.

- [Book a demo](https://twelfth.ai/book-a-demo)
- [twelfth for merchandise planners](https://twelfth.ai/for/merchandise-planners): Continuous demand, cover and flow monitoring that shows where the buy plan and the actual trade have come apart.

Source: https://twelfth.ai/glossary/stockout