Stockout
A product unavailable for shipping. Immediate lost sales plus damaged trust.
In practice
87% of customers buy from a competitor when they hit 'out of stock.' A stockout during an active ad campaign burns money twice.
Common misconception
'Out of stock is fine — people will wait.' Only 13% actually wait.
How to fix it
Recurring stockouts? (1) reorder point = lead time × daily sales + safety stock, (2) an alert when stock falls below a threshold, (3) don't run a campaign on a product with low stock.
Example
A candle store: an $850 campaign led to stock running out on day 2, causing 5 days out of stock. Now: no ad campaigns run below 50 units.
Priority
Set reorder points for every Category A item — in Shopify: Low Stock Alert.
Related terms
Keep learning. Metrics that touch the same area:
- Demand ForecastingOperationsUsing historical data to predict sales volume. Enables ordering the right amount of inventory at the right time.
- Lead TimeOperationsThe time from ordering with a supplier to receiving inventory. Critical for calculating the reorder point.
- Reorder PointLogisticsThe inventory level at which a new order must be placed with the supplier. ROP = (Average Daily Sales × Lead Time) + Safety Stock. Prevents stockouts between orders.
- SKU – Stock Keeping UnitOperationsA unique identifier for each product variation. The basis for precise inventory management.
- Inventory ManagementOperationsTracking, ordering, and maintaining inventory. Too much means cash tied up. Too little means stockouts.
- DropshippingOperationsSelling without holding inventory — a supplier ships directly to the customer. Low margin (5-20%), no quality control.
Jimmy tracks your Stockout, automatically
WhatsApp alerts when something important changes. No dashboards, no hassle.