Stock Velocity Calculation

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It’s a delicate balance for online store owners, keeping enough merchandise in stock to meet customer demand but not too much that you’re tying up capital and inventory space. The ability to improve inventory turnover, or velocity, can help you achieve this balance and contribute to the profitability of your ecommerce store.

Inventory turnover can be one of the most important financial ratios for store owners to monitor and manage. It measures the liquidity of your inventory and can help you determine how to increase sales through inventory control.

Put simply, ecommerce stores with high turnover are selling inventory faster. That means less cash tied up by the company. Stores with low inventory velocity may be holding obsolete inventory that is difficult to sell, which erodes company profits.

To help NopCommerce clients a plugin has been created with the use of machine learning. This plugin helps the client get and highly accurate stock velocity which can be used to deduce the stock consumption and many other matrices to improve the inventory handling. Due to the use of machine learning in this plugin the data will be refined more and more with every month of inventory consumption and with parameters used like time of the year, sales going on at the proposed time.

Improving Inventory Velocity With Accurately calculating Purchase Order Timing

In addition to the metrics above, the plugin helps client to track the following data points to make accurate predictions on when to reorder merchandise. Getting the timing right on ordering and replenishing will further improve your inventory turnover rates.

Quantity Sold

At any given time, you should be able to view the number of items you have sold in each product category. Viewing this data for a selected date range enables better inventory decision making.

Quantity Left

By pulling data from your NopCommerce platform you should be able to see the number of products remaining in your inventory. It’s critical to follow this metric closely to avoid out of stock items and lost sales.

Depletion Days

If you know how many days until your stock will be depleted, you can place your reorders with confidence. This metric is based on the quantity available divided by velocity, which determines, on average, the number of days left until the product will be out of stock.

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