Lost sales
Also called lost demand
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is lost sales?
Lost sales are customer demand a distributor couldn’t fill and the customer didn’t wait for, such as a line cancelled because the item was out of stock. A quote turned down for lack of availability counts too; unlike a backorder, the sale is gone.
How it works
Distributors record lost sales, usually with a reason code at order entry, because sales history alone understates demand for items that ran out. A demand forecast built only on what shipped will keep the shelf too thin.
Lost sales example
A customer asks for 20 breakers, the branch has none, and the customer buys them elsewhere. The CSR records a lost sale of 20 so the buyer’s demand history shows what customers actually wanted.
Related terms
- StockoutA stockout is a situation in which a distributor has none of an item available to sell when a customer wants it.
- BackorderA backorder is the quantity on a customer’s order that a distributor has agreed to supply but can’t ship yet, kept open until stock arrives.
- Demand forecastA demand forecast is an estimate of how much of an item customers will buy in the coming weeks or months, used to plan purchasing and stock levels.
- Fill rateFill rate is the percentage of ordered goods a distributor ships straight from its shelves on the first delivery, before any backorders arrive.
