Running out of stock isn't just a missed sale. It's lost customers who don't come back. See the real number.
A stockout happens when a customer wants to buy something and you have zero units left to sell. The obvious cost is the revenue you missed while the shelf was empty. The real cost is higher — usually 60–70% higher — because most businesses only count one of the three components.
Direct lost revenue: the number everyone calculates
Daily sales × days out of stock × selling price. This is the floor — what you would have made if stock hadn't run out. Most founders stop here.
Emergency order premiums: the cost most shops miss
Rush freight, priority fees, and above-standard unit costs when you restock in a panic. These typically run 15–40% above a normal reorder.
Customer churn: the multiplier that changes everything
Customers who couldn't buy and went to a competitor — and didn't come back. Research consistently finds ~25% of customers who hit an out-of-stock switch permanently. Multiply that by customer lifetime value and you have the number that makes most founders go quiet.
You only need two numbers to get a result. The others sharpen the estimate.
How much this product earns you per day
Selling price × average units sold per day. Or pull a week's revenue for this product from your POS and divide by 7.
How many days you were (or expect to be) out of stock
Check your inventory history, or estimate based on when you noticed it was gone and when it was restocked.
Your average transaction value (optional)optional
Total revenue for any recent month ÷ number of transactions that month. This helps estimate how many customers were affected. Find it in your POS dashboard.
Average revenue per day from this SKU.
How long the stockout lasted or is expected to last.
Optional — add these to see the full picture
Enables an estimate of customers affected and lost.
Shows the profit impact, not just lost revenue.
Try an example
The full stockout cost has three components. Most small businesses only track the first one.
Stockout Cost = (Daily Sales × Days Out of Stock × Selling Price) + Emergency Order Premium + (Lost Customers × Customer Lifetime Value)
Say you run a Shopify store and your best-selling candle goes out of stock for 12 days. You normally sell 15 units a day at $40. Direct lost revenue: 15 × 12 × $40 = $7,200. Your emergency restock from a domestic supplier cost $800 more than a standard order. And you estimate that 20 customers who tried to buy during that window never came back — your average customer lifetime value is $200. That's another $4,000 gone.
Total stockout cost: $12,000. From one SKU. Over 12 days.
Most founders calculate $7,200 and move on. The real number is 66% higher — and that's before factoring in Amazon BSR rank decay or Shopify ad spend wasted sending traffic to an out-of-stock listing.
Once you carry 30, 50, or 100 SKUs across Shopify, Square, and WooCommerce, there's no realistic way to manually monitor stock levels, anticipate lead times, and flag risk before it becomes a stockout. By the time you notice, it's already cost you.
ReUp watches your real sales velocity across every connected channel, tracks your supplier's actual delivery history, and tells you how many days of stock you have left — before you hit zero. When you're trending toward a stockout, it drafts a purchase order and asks you to approve it. The customers you keep by staying in stock? That's the ROI.
By the numbers
Global inventory distortion — stockouts and overstock combined — costs retailers over $1.77 trillion annually, according to IHL Group. The average small-to-mid-size retailer loses 4–8% of annual revenue to stockouts alone.
Step 1 — Direct revenue lost
Revenue Lost = Daily Revenue × Days Out of Stock
The floor — what you would have made if stock hadn't run out. Multiply your average daily revenue for this product by the number of days it was unavailable.
Step 2 — Emergency order premiums
Emergency Cost = Rush Freight + Priority Fees + Price Premium per Unit
Pull the actual invoice for your emergency restock. Rush freight, supplier priority fees, and above-standard unit costs typically add 15–40% above a normal reorder. This is the most measurable hidden cost of a stockout event.
Step 3 — Lost customer value (optional)
Lost Customers = (Revenue Lost ÷ Avg Order) × 25%
Studies find roughly 25% of customers who encounter an out-of-stock situation switch to a competitor permanently. Multiply the estimated number of lost customers by your average customer lifetime value — for most repeat-purchase businesses, this doubles or triples the direct revenue loss.
Step 4 — Platform-specific costs
On Amazon, a stockout tanks your BSR ranking and suppresses the Buy Box — recovery can take 4–8 weeks of lost position. On Shopify, check whether "continue selling when out of stock" was enabled (backorder mode) or off (hard lost sale). On Square, there's no native backorder option — every stockout is a hard lost sale. These platform differences change your total materially.
Step 5 — Annualize it
Annual Stockout Cost = Single Event Cost × Stockout Events per Year
Multiply your single-event total by how many times per year you run out of stock across your catalog. Most sub-$1M businesses with 50–200 active SKUs are surprised to find the annual number exceeds $20,000–$50,000.
The fix is an accurate reorder point — a stock level at which you automatically place a new purchase order before you run out. The formula: ROP = (Average Daily Sales × Supplier Lead Time) + Safety Stock.
The challenge is that both daily sales and lead times vary. A static ROP set once in a spreadsheet breaks down within weeks as demand shifts and supplier timing drifts. The shops that eliminate stockouts without burying cash in overstock are the ones that recalculate their safety stock and reorder points continuously — per SKU, per supplier, per season.
If you want to know exactly when to reorder each product, use the free Reorder Point Calculator.
The other free calculators in the same family. Use any one without an account.
Reorder Point Calculator
When to reorder, with safety stock and lead time built in.
MOQ Break-Even Calculator
Whether a supplier’s minimum order is actually profitable.
Recipe COGS Calculator
Real cost per unit for makers, batch by batch.
Stocky migration guide
Move off Shopify Stocky before the August 31, 2026 sunset.
Last updated: June 2026
ReUp stops stockouts before they happen.
It watches your stock levels and drafts a reorder before you run out.
