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What Is Inventory Shrinkage?

Inventory Shrinkage inventory loss due to damage during shipping, warehouse theft, supplier short-shipments, or administrative counting errors. Measured as percentage of expected inventory value.

How Dashboardly Tracks Inventory Shrinkage

Dashboardly calculates Inventory Shrinkage from your live TikTok Shop data — pulling actual orders, fees, refunds, and returns so the number you see matches your P&L.

  • Actual order revenue — not estimated or attributed revenue
  • Refunds and returns deducted automatically
  • All platform fees included for profit-level accuracy
  • Historical trends so you spot changes before they hit profit

Frequently asked questions

What is a good Inventory Shrinkage?

Acceptable: <2%. Average e-commerce: 1-3%. FBT: typically <1% (TikTok-managed). Self-fulfilled: 2-5%.

How do I calculate Inventory Shrinkage?

Shrinkage Rate = (Expected Inventory - Actual Inventory) / Expected Inventory × 100

Why is my Inventory Shrinkage different from what TikTok Shop reports?

TikTok's native reports use attributed metrics with click- and view-through windows. Dashboardly calculates Inventory Shrinkage from actual order revenue, deducting refunds and returns for a truer number that matches your real P&L.

When should I track Inventory Shrinkage?

Inventory Shrinkage is a leading indicator — check it daily if you're running ads or running pricing experiments, weekly otherwise. Dashboardly tracks Inventory Shrinkage automatically so you don't have to pull exports.

Related tools & resources

Read more about Inventory Shrinkage in the TikTok Shop tax guide for sellers.

Inventory loss due to damage during shipping, warehouse theft, supplier short-shipments, or administrative counting errors. Measured as percentage of expected inventory value.
Definition

Inventory loss due to damage during shipping, warehouse theft, supplier short-shipments, or administrative counting errors. Measured as percentage of expected inventory value.

Formula

Shrinkage Rate = (Expected Inventory - Actual Inventory) / Expected Inventory × 100

Example Calculation

Expected 1,000 units, counted 970 = 3% shrinkage

Benchmarks for TikTok Shop Sellers

Acceptable: <2%. Average e-commerce: 1-3%. FBT: typically <1% (TikTok-managed). Self-fulfilled: 2-5%.

Why It Matters for TikTok Shop Sellers

Inventory loss due to damage during shipping, warehouse theft, supplier short-shipments, or administrative counting errors. Measured as percentage of expected inventory value.

Related Terms

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