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Fill Rate

What is the fill rate?

Fill rate is a term for the percentage of customer demand that’s met by current available stock, without encountering backorders, lost sales, or stockout situations. A strong fill rate is measured at (or near) 100%, meaning you’re continually fulfilling all of your wholesale orders with ease. In that way, fill rate is a great indication of how well you can meet customer demand at any given time. Taking a minute to calculate your fill rate metrics is critical, because if they remain low, it could translate to a loss of customers and a poor reputation for your brand. 

How to calculate fill rate

To calculate your company’s fill rate, begin by taking the number of orders that have been completely fulfilled, and divide that by the total number of orders received. From there, multiply that number by 100; this answer will be your fill rate percentage. In short form, the fill rate formula is: fill rate = [fulfilled orders ÷ total orders] x 100.

Calculating fill rate: an example

For example, if a customer orders 80 baskets but you’re only able to ship 20 baskets at the time of ordering, your fill rate calculation would be: [20 ÷ 80] x 100  = 25%. In other words, you divide the number of customer orders shipped (20) by the number of orders placed (80), and then multiply by 100 to find your percentage. It’s worth noting this scenario assumes you only have one order from one customer. Calculating fill rate becomes more complex the more customers you have, which is where automated order and inventory management solutions come in handy.

Frequently Asked Questions

  • What is the optimal fill rate?

    Simply put, higher fill rates are better. While the ideal fill rate can hinge on the type of SKUs or the number of products you sell, a good fill rate typically rests between 85 and 95% (with the best performing retailers reaching up to 99%). A low fill rate can be improved through accurate demand forecasting, safety stock parameters, and alternatives for out of stock inventory items. 

  • Why is fill rate important?

    When you stockout or backorder products, it can negatively affect the customer experience, and in turn, result in lost sales. Fortunately, by using fill rate percentage, you’ll have a better understanding of how to secure customer satisfaction, as well as how to refine your inventory management and supply chain processes. For instance, if your order fill rate is consistently low, you have an opportunity to look into other suppliers or revisit your reorder point to ensure you’re maintaining appropriate stock levels. 

  • What’s the difference between fill rate and service level?

    Service level involves calculating the percentage of the replenishment cycle that ends with all customer demand met. In essence, service level is the probability of not having a stockout in a given sales cycle. Fill rate, by contrast, calculates the percentage of demand that’s satisfied from available inventory, or, the probability that product demand is supplied from available inventory. A popular way to differentiate the two is that service level measures fulfillment from a customer angle, while fill rate measures things from an inventory performance angle.

More terms and formulas

formulas Finished Goods Inventory See definition and examples
inventory Batch Tracking See definition and examples
inventory SKU See definition and examples

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