# What is Stockout?

What is Stockout? A product unavailable for shipping. Immediate lost sales plus damaged trust.

## How it works 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.

## Related metrics

- Demand Forecasting — prevents stockouts
- Lead Time — a factor in calculating minimum stock
- Backorder — the alternative
- Reorder Point — the mechanism that prevents it

## 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.

## Real-world 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.

## Where to start

Set reorder points for every Category A item — in Shopify: Low Stock Alert.

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Category: Operations · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/stockout