Fill rate: the formula, and what it reveals that revenue hides
Fill rate is the percentage of customer demand you filled from stock you already had, and the formula is units shipped divided by units ordered, times one hundred. Ship 940 of the 1,000 units customers ordered this month and your unit fill rate is 94 percent.
What fill rate means
Fill rate is the percentage of demand you met from stock on hand, without a backorder, a split shipment or a cancellation. The formula:
Fill rate = (units shipped / units ordered) x 100
The numerator is easy. You know what left the building. The denominator is the whole argument, because it is demand, not sales. Demand includes the units customers wanted and did not get.
The measure comes from warehousing and wholesale, where a buyer places a purchase order and you either fill it or you short it. The shortfall is written down, so the denominator is sitting there in the paperwork. A direct-to-consumer store has no purchase orders. Demand that arrives at a sold-out product page leaves no record at all, which is why fill rate is simple to define and awkward to measure for a 50 to 2,000 SKU catalogue.
Three ways the number gets counted
| Measure | Formula | What it answers |
|---|---|---|
| Unit fill rate | Units shipped / units ordered | How much of the demand, in units, you covered |
| Line fill rate | Order lines shipped complete / order lines ordered | How many SKU lines went out whole |
| Order fill rate | Orders shipped complete / orders placed | How many customers got everything in one shipment |
A worked month, three different answers
Take one month: 380 orders, 450 order lines, 1,000 units of demand. One SKU sits at zero for nine days. Across those nine days, 60 units of demand go unmet, spread over 30 order lines in 28 orders.
- Unit fill rate: 940 / 1,000 = 94 percent
- Line fill rate: 420 / 450 = 93.3 percent
- Order fill rate: 352 / 380 = 92.6 percent
Same month, same single stockout, three numbers. Unit fill rate flatters you when the missing units are cheap and plentiful. Order fill rate is the harshest, because one missing item spoils a whole order, and it is the one closest to what the customer actually experienced. Pick one, write down which, and stop switching. A fill rate that changes definition between months tells you nothing.
What revenue hides and fill rate does not
Revenue is a sum of what you did ship. It has no slot for the order that never got placed.
When a SKU hits zero and overselling is off, the sale does not become a backorder and it does not become a cancellation. It becomes a sold-out button and a closed tab. Nothing reaches your reports. A month with a nine-day stockout on a strong seller can post respectable revenue, because the days either side were busy and the shortfall has no line of its own. That is the quiet part: your ledger records the stockout as an absence, and absences do not get reviewed.
Fill rate forces the denominator into the open. It asks what was wanted, not what was bought. For a store that does not take backorders, the honest version is a proxy rather than a true ratio:
- Count the days each SKU spent at zero, and weight them by that SKU's normal units per day.
- Treat partial shipments and cancellations as recorded misses, because those you can actually see.
- Watch days of inventory remaining before the SKU reaches zero, which is the only version of this number you can act on while there is still time to place the order.
That last point is the practical conclusion. Fill rate is a scorecard for a period that has already closed. It is useful for arguing about which SKUs deserve more cover, and useless on the morning you were meant to call the supplier.
Related terms
Fill rate sits downstream of numbers you set yourself.
- Stockout. The event fill rate is scoring. One stockout on a strong SKU moves every version of the ratio.
- Backorder. The mechanism that turns invisible lost demand into recorded demand, at the cost of a promise you then have to keep.
- Days of inventory on hand. The forward-looking cousin. Same inventory, read before the gap instead of after it.
- Safety stock. The buffer you hold specifically to lift fill rate when demand or lead time runs hot.
- Reorder point. The trigger that keeps the buffer intact. If fill rate slipped, this is usually the number that was set too low.
- Sell-through rate. Often confused with fill rate. Sell-through measures how much of what you received has sold; fill rate measures how much of what was wanted you could ship.
- Inventory carrying cost. The price of chasing a higher fill rate with more stock on the shelf.
Questions
What is the fill rate formula?
Units shipped divided by units ordered, times one hundred. Swap units for order lines or whole orders and you get line fill rate or order fill rate, which measure the same month and give lower numbers.
How do I measure fill rate when Shopify blocks orders for sold-out items?
You cannot measure it exactly, because the blocked demand is never recorded. Use a proxy: count the days each SKU spent at zero and multiply by its normal units per day, then add any partial shipments and cancellations you can see. Treat the result as an estimate of the gap, not a precise ratio.
What counts as a good fill rate?
That is a decision, not a benchmark. The target depends on your margin per unit, your supplier lead time and how easily a customer substitutes a different product. High margin plus long lead time argues for more cover and a higher target; low margin plus a quick reorder argues for accepting the occasional miss rather than paying to carry stock that may not move.
Is fill rate the same as sell-through rate?
No. Sell-through rate is units sold against units received, so it describes how well a buy performed. Fill rate is units shipped against units demanded, so it describes how often you could serve the demand you had. A SKU can show strong sell-through precisely because it sold out, which is a bad fill rate wearing a good costume.
Does a high fill rate mean I am holding too much stock?
It can. Pushing fill rate towards 100 percent means buying cover for demand peaks that may not arrive, and that cash sits on a shelf. The sensible test is per SKU: tight cover on slow movers, generous cover on the few items that carry your revenue.
Does Restoc calculate fill rate?
No, and we will say so plainly rather than imply otherwise. The dashboard is built to show current stock, days of inventory remaining and reorder status per active SKU, which is the forward-looking side of the same problem. Fill rate reporting is not in the product today.