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Stockout Cost Calculator

See what running out of stock really costs.

Result

$4,375.00
350
$12.50

How it is calculated

The tool prices a stockout as the profit you could not earn: stockout cost = lost_units × margin_per_unit. Lost units is the number of units customers wanted but you could not supply, and it must be a whole number (350.6 gives no result). Margin per unit is the profit on one unit in dollars, meaning selling price minus the cost of goods, not the selling price itself. Both must be zero or higher and both fields are required. The result counts only the direct lost margin. It does not add the customer who may not return, rush shipping on backorders, penalties or any sales that moved to a substitute product of yours, so treat it as a minimum. The units and margin you entered are echoed back.

Worked example

A shop ran out of a product for part of the month. Customers asked for 350 units that could not be supplied, and each unit earns a profit of 12.50 after its cost. The lost profit is 350 × 12.50 = 4,375. The tool prints a stockout cost of $4,375.00, echoing the 350 units and the $12.50 margin. This figure is what the missed sales would have added to profit, before any wider effect on future orders.

Try this example →

Common mistakes

  • Entering the selling price instead of the profit per unit. Revenue lost is not profit lost; the margin is the price minus the cost of the product.
  • Counting units that would not have sold anyway. Enter only the demand you actually could not fill, for example from backorders or turned-away orders.
  • Forgetting that some customers waited or bought a substitute. Only the sales that were truly lost belong in the lost units.
  • Expecting other costs to be included. Rush freight, lost goodwill and discounts to win customers back are not part of this result.
  • Entering a fractional number of units, such as an average of 350.6. The units field takes whole units only and shows no result otherwise; round the demand first.

About this calculator

A stockout — running out of inventory while demand still exists — costs more than the lost sale itself. It represents lost profit margin on units that couldn't be sold, and often ripples further into lost customer goodwill, rush-shipping costs on backorders, or customers who buy from a competitor instead and don't come back. Inventory managers treat stockout cost as the counterweight to holding cost: carry too little stock and you pay in lost sales; carry too much and you pay in storage and obsolescence.

This calculator estimates the lost-profit cost of a stockout from your unit margin and the quantity of demand you couldn't fill. It's used alongside reorder-point and safety-stock calculations to justify holding a bit more buffer inventory — the stockout cost this calculator surfaces is often the number that makes a slightly higher holding cost worth paying.

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