Stockout Rate

Discover how Stockout Rate measures how often products are unavailable when customers want to buy. Learn how to track, analyze, and reduce this KPI to improve inventory control and customer experience.

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KPI Details for Stockout Rate

Category

Marketing, Ecommerce
Type

Lagging Indicator
Calculation

Stockout Rate (%) = (Number of Stockout Events / Total Demand Events​) × 100
Measure

Tracks how frequently a product is out of stock when there is customer demand, helping businesses reduce missed revenue and improve fulfillment reliability.
Data Sources:

Shopify, NetSuite, Zoho Inventory, QuickBooks Commerce, Oracle Netsuite, Microsoft Dynamics, ERP & POS systems.
Frequency

Tracked weekly or monthly to catch supply chain or inventory issues early and adjust forecasting or replenishment strategies.

Example target

Reduce stockout rate to below 2% in Q3 by improving demand forecasting, optimizing reorder points, and enhancing supplier coordination.

Example Reports Use Case

An Inventory or Supply Chain Manager tracks Stockout Rate to identify frequently unavailable items. If the rate is high for top-selling products, they may adjust safety stock levels or set automated restocking alerts.

KPI Example

Best Practices for Stockout Rate

  • Implement Real-Time Inventory Tracking

    Use automated systems to monitor stock levels and prevent unexpected stockouts.

  • Improve Forecasting Accuracy

    Base forecasts on historical sales, seasonality, and promotional planning.

  • Set Reorder Points & Safety Stock Buffers

    Establish minimum inventory levels that trigger replenishment automatically.

  • Diversify Suppliers & Monitor Lead Times

    Avoid delays by working with multiple vendors and planning for variable fulfillment windows.

What is a Stockout Rate

Stockout Rate measures the percentage of times a product is unavailable when customer demand exists. It is a critical KPI for industries like e-commerce and manufacturing, providing insight into the effectiveness of inventory management and a company’s ability to meet customer needs. A high stockout rate can signal poor inventory planning, leading to lost sales, decreased customer satisfaction, and potential damage to brand reputation. Monitoring and improving this metric is essential for ensuring operational efficiency and maintaining strong customer relationships.

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