The Hidden Cost of Out-of-Stocks: How Much Revenue Are You Losing?

Are Stockouts Silently Draining Your Profits?

Stockouts are more than just an inconvenience—they can significantly impact a brand’s bottom line. Many businesses underestimate the financial repercussions of missing products on the shelf. At InStore Group, we specialize in keeping your products stocked, properly priced, and reordered when necessary, preventing costly revenue losses.
But how much could a single out-of-stock item actually cost your brand? Let’s break it down with real numbers.

How Much Money Are You Losing When Products Are Out of Stock?

Using a simple formula, we can estimate just how much sales are lost when a product is missing from shelves:

Stockout Revenue Loss Formula:

Days Out of Stock × Average Units Sold Per Day × Retail Price Per Unit × Number of Stores

Example Calculation:Let’s assume:

• A product is out of stock for 5 days
• Typically, 5 units are sold per day per store
• The retail price per unit is $5.99
• The product is available in 1,000 stores

Revenue Lost Per Store:
5×5×5.99=149.75 

Total Revenue Lost (Across 1,000 Stores):
$149.75 ×1,000 = $149,750.

But it doesn’t stop there. Suppliers also take a hit, as their wholesale margins are affected. If a supplier’s gross margin is 35%, their estimated loss is:

$149,750 × 0.35=$52,412.50

This is just one product over a five-day period. Imagine the impact of frequent out-of-stock situations across an entire product line or retail chain!

The Ripple Effect: More Than Just Lost Sales

Stockouts don’t just result in lost revenue. They also have long-term consequences, including:

• Customer Frustration & Brand Switching – If shoppers can’t find your product, they will likely switch to a competitor’s brand.
• Retailer Penalties – Many big-box retailers impose financial penalties on suppliers for frequent out-of-stock issues.
• Disrupted Marketing Campaigns – If your product is out of stock during a promotional period, marketing dollars are wasted.

How InStore Group Helps You Avoid Stockout Losses

At InStore Group, we provide third-party merchandising services that ensure your products stay stocked and visible on the shelf. Our services include:

• Real-time inventory monitoring to prevent stockouts
• Replenishment & ordering services to keep shelves full
• Shelf organization & pricing accuracy to boost sales

By staying ahead of potential stockouts, we help brands and retailers maximize revenue and avoid unnecessary losses.

Turn Stockouts Into Sales: Let’s Keep Your Shelves Full

The financial impact of out-of-stock products is too significant to ignore. Whether you're a retailer or a supplier, ensuring your products are always available is crucial for maintaining revenue and customer loyalty.

Want to protect your sales and keep customers coming back? Let’s talk! Contact us at InStore Group to learn how we can help you keep your products stocked and your profits protected.