In this article
Talk to our experts- Stockout
- A stockout is the point at which a product's sellable inventory runs out while buyers still want it, so new orders cannot be filled from stock until the item is replenished. In Shopify's terms, an item is out of stock when inventory is tracked and the inventory level is at zero or below.
How it works
A stockout happens when the sellable quantity of an item reaches zero before replenishment arrives, so the next buyer cannot be supplied from stock.
What counts as zero depends on which number you watch. Shopify separates inventory into states:
- On hand: all inventory units at a location, the total of Committed, Unavailable and Available inventory.
- Committed: units set aside that can't be sold, such as units in an unfulfilled order or reserved in a draft order.
- Unavailable: units held for reasons such as damage, quality control or safety stock.
- Available: inventory that you can sell.
A shelf can therefore hold units and still be stocked out for a new buyer when every unit is committed or unavailable. By default, Shopify customers can't purchase an out of stock item until you adjust inventory levels to add more stock.
Locations matter too. If an item is at zero or below at a location that fulfills online orders, and the only available units sit at a location that doesn't fulfill online orders, Shopify still displays the item as out of stock on your online store.
Stockout vs. backorder
- Stockout: the item has no sellable stock, so the order can't be filled from inventory.
- Backorder: the seller takes the order for the out of stock item anyway, and the backordered quantity follows once new stock arrives. On Shopify, selecting Continue selling when out of stock lets customers buy out of stock items, for example when you have stock coming soon and want to keep selling before it arrives.
Example
A distributor has 120 units of a fitting available and sells an average of 8 a day.
- Days of inventory remaining: 120 / 8 = 15 days.
- Replenishment: the supplier needs 20 days to deliver an order placed today.
- Gap: stock runs out on day 15, five days before the delivery: 20 - 15 = 5 days without stock.
- Demand at risk: 5 days x 8 units = 40 units. At $25.00 a unit, that is $1,000.00 of orders the distributor can't ship from stock unless it takes them as backorders.
That gap is what a reorder point is set to close: it triggers the replenishment order early enough that new stock arrives before the item runs out.
On Shopify
- Out of stock rule: an item is out of stock when inventory is tracked and the inventory level is at zero or below.
- Seeing it coming: the Inventory remaining per product report divides the quantity still in inventory by the average quantity sold per day, over the last 28 days, to estimate how many days remain before inventory runs out. Its chart shows how many variants are predicted to run out of stock soon.
- Prioritizing: the ABC product analysis report grades variants by share of revenue. Shopify notes that if you sell out of A-grade products, which account for 80 percent of your revenue, then you can miss out on sales. As of October 28, 2026, Shopify says stores on the Basic or Lite plan can download a reporting app with ABC analysis from the Shopify App Store.
- Point of sale: Continue selling when out of stock doesn't apply to Shopify POS orders. POS warns staff before they sell an item that's not available.
How Uncap helps
Uncap's guide to available to promise vs. on hand explains why B2B storefronts oversell when the ERP's on-hand figure is pushed into Shopify. Uncap Connect is designed so the ERP computes availability with its own commitment logic, and Shopify displays the answer instead of recalculating a weaker version of it.
Sources
Frequently asked questions
What is stock out in inventory management?
A stockout in inventory management is when an item's sellable quantity reaches zero while buyers still want it, so orders can't be filled from stock until it is replenished. Shopify treats a tracked item as out of stock when its inventory level is at zero or below.
What is an example of a stockout?
A distributor has 120 units of a fitting and sells 8 a day, so stock lasts 120 / 8 = 15 days. If the next delivery takes 20 days, the fitting is stocked out for 5 days, and about 5 x 8 = 40 units of demand can't ship from stock.
What is the 80/20 rule for inventory?
The 80/20 rule, or Pareto principle, is the observation that most of a system's output is caused by a small amount of the input. Shopify says an ABC inventory analysis uses this principle: in Shopify's ABC product analysis report, A-grade products are the top sellers that collectively account for 80 percent of revenue. Shopify notes that if you sell out of A-grade products, then you can miss out on sales, and that the report helps you understand which products to prioritize when restocking.
What is the difference between a stockout and a backorder?
A stockout means an item has no sellable stock, so an order can't be filled from inventory. A backorder is an order the seller accepts for that out of stock item anyway, with the backordered quantity shipping once new stock arrives.
