Stockout
Running out of an item a customer wanted to buy. The lost sale is rarely recorded anywhere, which is why the cost is usually underestimated.
A stockout is the moment demand exists and stock does not. Unlike almost every other inventory problem, it leaves no trace in your books — no transaction is recorded, because no sale happened.
The full cost
The margin on that sale is only the visible part. There is the customer who buys the whole basket elsewhere because one item was missing, the regular who now knows the other shop stocks it, and the credibility lost when a promised delivery date slips.
Why it happens
Almost always one of four things: the reorder point was set too low, the supplier's lead time was longer than assumed, demand spiked and no buffer existed, or stock was on hand but already committed to another order and nobody knew.
Make the invisible visible
Keep a simple record of asked-for-and-not-available, even a note at the counter. Without it, the same item runs out four times a year and nobody connects the events. With it, you know exactly which reorder points to raise.
How KillStock handles it
Low stock is a standard report, and reservations stop committed stock being promised twice — which removes the fourth cause outright. On the Growth plan and above, reorder rules per item and location also produce suggestions that net reserved stock and backorders.
A common mistake
Responding to every stockout by ordering more. If the cause was a late delivery, more stock is the expensive fix; a longer lead time in the reorder point is the cheap one.