Input Your Numbers
Calculate Stockout Cost
Common Questions
Frequently Asked Questions
How do I calculate the cost of a stockout?
Multiply daily sessions on the affected product by your conversion rate to get daily orders. Multiply by stockout duration in days to get lost orders. Subtract the % that come back when you restock (the "recovery rate"). Multiply remaining lost orders by AOV and then by gross margin to get profit lost. Add any ad spend that ran during the stockout - that's wasted because the page couldn't convert.
What is a typical stockout recovery rate?
Industry data suggests 30-40% of customers return to buy when a product is restocked, assuming they get a "back in stock" notification. Without notifications, recovery is closer to 10-20%. Customers shopping mid-funnel (already on PDP) recover at higher rates than top-of-funnel discovery traffic.
Should I pause ads during a stockout?
Yes, for that specific product/SKU. Ads driving traffic to an unavailable PDP waste money and damage trust. Many merchants keep their entire ad account running because pausing campaigns risks Meta or Google's machine learning resetting. The compromise: pause the specific ad set or use catalog ads that auto-hide out-of-stock SKUs.
How do I prevent stockouts on bestsellers?
Three layers: (1) Track velocity per SKU - know your average daily sell-through. (2) Calculate reorder point = (daily velocity × lead time) + safety stock. (3) Set automated alerts when inventory drops below reorder point. Bestselling SKUs deserve 30-90 days of safety stock depending on supplier reliability.
What's the second-order cost of stockouts?
Beyond the direct revenue/profit loss: ad algorithms downgrade pages with low conversion (and out-of-stock pages have 0% conversion), so your CPMs recover slowly after restock. Customer reviews complain about availability, hurting SEO. Customers who try a competitor sometimes never come back. The "true" cost is typically 1.5-2x the direct calculation.
Should I overstock to be safe?
Carry cost matters too. Inventory ties up cash, takes warehouse space, and risks obsolescence on seasonal or trendy items. The math: if your cost of capital is 15% annually and you carry 60 days of safety stock, that's 2.5% added to cost. Compare that to the stockout cost from this calculator. The right safety stock minimizes the sum of carry cost + expected stockout cost.
More Tools