Shrinkage Cost Calculator
Estimate annual inventory shrinkage losses by category and see how they impact your bottom line.
Inputs
Results
Annual Shrinkage Loss
$7,000.00
≈ 7 smartphones
How to Use This Calculator
- Enter your total inventory value ($) at cost.
- Enter your shrinkage rate as a percentage of inventory (industry average is around 1.4%).
- Select the primary shrinkage category to analyze: external theft, administrative error, vendor fraud, or damage/spoilage.
- Review the annual shrinkage loss ($), daily loss ($), and shrinkage as a percentage of implied sales.
- Compare your selected category's industry share to see how it typically weighs against the others (theft ~36%, admin error ~21%, vendor fraud ~15%, damage/spoilage ~28%).
How the result changes with Total Inventory Value
| Total Inventory Value | Annual Shrinkage Loss |
|---|---|
| $10,000,000.00 | $140,000.00 |
| $35,000,000.00 | $490,000.00 |
| $65,000,000.00 | $910,000.00 |
| $90,000,000.00 | $1,260,000.00 |
What each input means
- Total Inventory Value
- Total dollar value of on-hand inventory at cost
- Shrinkage Rate (%)
- Shrinkage as percentage of inventory (industry average is ~1.4%)
- Primary Shrinkage Category
- Select the primary category of shrinkage to analyze
How this is calculated
Worked example, using the default values
- Identify Input ParametersTotal Inventory Value = 500000, Shrinkage Rate (%) = 1.4, Primary Shrinkage Category = 1 = 3 input(s) provided
- Calculate Annual Shrinkage LossAnnual Shrinkage Loss7000 = $7,000
- Calculate Daily LossDaily Loss19.18 = $19.18
- Calculate % of Implied Sales% of Implied Sales0.7 = 0.7%
Engine last updated . Checked against 3 independently-derived tests — how we verify calculators.
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