What is a stockout?
A stockout happens at the point of sale when a specific item reaches zero available inventory, so the customer cannot buy it. It is narrower than a “shortage,” which is a broader supply-chain problem across the market.
Stockouts cost you real money. Each one means a lost sale, a frustrated customer, and a small dent in your reputation that adds up over time.
The scale is large. Out-of-stocks account for $690.9 billion of inventory distortion and 65.6% of the total, per IHL Group’s 2026 Inventory Distortion Study, a global figure spanning all retail categories.
Key characteristics
- Point of sale: A stockout shows up as zero available stock at the exact moment a customer wants the item.
- Stockout rate: You measure it by dividing the number of out-of-stock products by the number of in-stock products. A lower rate is better.
- Root causes: Most stockouts trace back to demand and supply gaps, such as inaccurate records, forecasting misses, supplier or delivery delays, and demand spikes. See the common causes of stockouts for more detail.
- Prevention: Safety stock and a reorder point refill inventory before it hits zero, giving you a buffer and a trigger to act on.
- Grocery frequency: In the food and grocery category, U.S. consumers reported a 9.5% out-of-stock rate for foods in 2024, down from 19.3% in 2022, according to Purdue University’s Consumer Food Insights survey.
Example
Extract Production, a Houston oil-and-gas services company, struggled with frequent stockouts before it moved to Fishbowl. With better forecasting, the team cut stockouts by 22%. Product availability became reliable instead of a recurring scramble.
Related terms
FAQ
What is the difference between a stockout and a backorder?
A stockout means the item is unavailable with no committed restock, while a backorder means a customer has ordered an out-of-stock item that will ship once it is back in stock.
How do you calculate the stockout rate?
Divide the number of out-of-stock products by the number of in-stock products. A lower percentage means stockouts are rare.
How do businesses prevent stockouts?
They improve forecasting, keep safety stock, set reorder points, and use inventory management software that flags low stock before it runs out.