Glossary
What is Stockout Cost?
Last updated July 2026
Definition
Stockout cost is the true cost of running out — lost sales, expedited freight, downtime, and eroded trust. It typically runs 2–5× the value of the missed sale.
Because stockout costs are painful and visible, teams over-buy to avoid them — which quietly creates excess. The answer is balance and accuracy, not blanket buffers.
Expedited freight to cover a stockout can cost 3–10× normal shipping.
Benchmark
True cost 2–5× the lost sale; expedite freight 3–10× normal.
Sources: Planster / IHL
Part of Working capital & inventory turns.
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