Out of stock rate: the formula, and the revenue it quietly explains
Out of stock rate is the share of your catalogue customers could not buy over a period, and the usual formula is out-of-stock SKU-days divided by total SKU-days, times 100. Below is the formula in both of its common forms, a worked example on a 200-SKU store, and what the percentage hides when your best seller is one of the gaps.
Out of stock rate, defined
Out of stock rate is the percentage of your catalogue that was unavailable to buy across a period of time. It is a backward-looking score: it tells you how often your store said no, not which SKU will say no next.
There are two formulas in common use, and they answer different questions.
Over a period, counted in SKU-days
- Out-of-stock SKU-days divided by (active SKUs multiplied by days in the period), times 100.
One SKU sitting at zero for one day is one out-of-stock SKU-day. This is the version to put in a monthly review, because it counts duration as well as frequency. A SKU that was out for a single afternoon and a SKU that was out for three weeks do not score the same.
At a single moment
- SKUs at zero divided by active SKUs, times 100.
This is a snapshot. It is quick to pull, it is useful as a daily glance, and it is easy to flatter yourself with by checking at a quiet hour. Use it for a pulse, not for a report.
A worked example on 200 SKUs
| Step | Working | Result |
|---|---|---|
| Size the period | 200 active SKUs across a 30-day month | 6,000 SKU-days available |
| Count the gaps | 4 SKUs sat at zero for 9 days each | 36 out-of-stock SKU-days |
| Apply the formula | 36 divided by 6,000, times 100 | 0.6 percent out of stock rate |
| Same month, snapshot view | 4 SKUs at zero on the 12th, 200 active | 2 percent on that day |
| Weight it by sales | Those 4 SKUs took a third of last quarter's units | 0.6 percent, carrying a third of demand |
Why 0.6 percent can still be the worst line in the report
The formula treats every SKU as equal. Your customers do not. In the example above, 0.6 percent reads like a rounding error, and yet nine days of absence landed on the four products the store is actually known for.
Three things the flat percentage will not tell you.
- Which SKUs. A gap on a hero product and a gap on a slow mover score identically. Merchants who want the metric to mean something keep a second, demand-weighted version: the share of units sold, or sessions, that hit a zero.
- Bursty demand. Items that sell in bursts rather than evenly run dry between the dates an average-based view thinks they are safe. A monthly rate smooths exactly the spikes that caused the stockout.
- Variants. Sizes and colours deplete at different speeds. Measure at the variant level or the rate will quietly hide the fact that only the medium is ever in stock.
The honest use of the number is as a trend line. Calculate it the same way every month, on the same SKU list, and watch the direction. Comparing a SKU-day rate against someone else's snapshot rate tells you nothing.
Related terms
Stockout
The single event: one SKU reaching zero. Out of stock rate is the aggregate of many stockouts over time. Our page on what running out actually costs a small store covers the event itself and the decisions around it.
Reorder point
The stock level at which you place the next order, usually sales velocity multiplied by supplier lead time. Out of stock rate measures the past; the reorder point is the number that governs the next one.
Sales velocity
Units sold per day, averaged over a window such as 7, 14 or 30 days. A short window reacts fast and jumps around. A long window is steadier and slower to notice a new trend.
Lead time
The days between placing an order with your supplier and the stock being sellable. Lead time is the input most often wrong by the widest margin, and it moves the reorder point more than anything else.
Days of inventory remaining
Current stock divided by sales velocity. This is the forward-looking twin of out of stock rate: a runway in days rather than a score on last month.
Safety stock
A buffer held on top of lead-time demand to absorb bursts and late deliveries. Adding safety stock raises the reorder point and, in most cases, pulls the out of stock rate down.
Fill rate
The share of ordered units you actually shipped. Fill rate looks at orders, out of stock rate looks at availability, and the two can disagree when a gap falls on days with little traffic.
Questions
What is the out of stock rate formula?
Out-of-stock SKU-days divided by (active SKUs multiplied by days in the period), times 100. The point-in-time variant is SKUs at zero divided by active SKUs, times 100. Pick one, write down which, and keep using it.
What counts as a good out of stock rate?
There is no single threshold worth quoting, because it depends on your catalogue size, your lead times and how much cash you are willing to tie up in buffer stock. The useful target is your own trend: this month against the last three, calculated the same way.
Should I count variants or products?
Variants, if you sell sizes or colours. Counting at the product level marks an item as available when only one size is left, which is the gap that annoys customers most.
How do I get the data out of Shopify?
Shopify holds inventory levels and order history, so the raw inputs are there. Turning them into a rate means sampling stock levels over time, because a current inventory figure does not tell you how long a SKU spent at zero last month.
Does Restoc report an out of stock rate?
Not today, and we will say so plainly rather than imply otherwise. Restoc is built around what is about to run out, per SKU, rather than a historical percentage.
Is out of stock rate the same as stockout rate?
People use the terms interchangeably. The thing that matters is whether the figure counts duration in SKU-days or just counts incidents, because the two give very different numbers for the same month.