- Demand variability: why last week's average misleads you
Demand variability is how much a SKU's daily sales swing around their average. What it means, how to spot it, and why the average alone misleads you.
- Just in time inventory: what a 200-SKU store can borrow from it
What just in time inventory means, why a small Shopify store cannot run it in its pure form, and the parts of it a 200-SKU catalogue can actually use.
- GMROI: the formula, and what it says about a slow SKU
GMROI = gross margin divided by average inventory cost. The formula, a worked example on two SKUs, how it relates to turnover, and what a low GMROI means.
- Cycle counting: keeping the number in Shopify true
Cycle counting defined: counting a slice of your SKUs on a schedule, why stock records drift, a worked rhythm for a 600-SKU store, and the terms around it.
- Open to buy: the budget behind your next order
Open to buy planning, defined: the stock budget left for the period, the formula, a worked month, and how it sits next to your reorder points.
- Service level: the stockout risk you choose to accept
Service level in inventory is the share of replenishment cycles you expect to cover without running out. What the number means, and what it costs.
- Fill rate: the formula, and what it reveals that revenue hides
Fill rate is units shipped divided by units ordered. The formula, the three ways to count it, a worked month, and why revenue hides a stockout.
- Replenishment: what the word covers in a small store
Inventory replenishment is deciding when to reorder a SKU and how much to buy. The definition, the four numbers it runs on, and a worked example.
- Committed vs available inventory: which number a reorder point should use
Committed inventory is stock in placed but unfulfilled orders.
- Minimum order quantity (MOQ): what it means for your reorder size
MOQ meaning: the smallest order a supplier accepts, the forms it takes, and how it changes the quantity you place when a SKU hits its reorder point.
- Backorder: what it means, and what it costs to rely on one
A backorder is a paid order you cannot ship until replenishment lands. What it means, how they happen, and what relying on one costs a small store.
- Par level: the fixed target, and where it breaks for a growing store
Par level inventory explained: the fixed stock level you top up to, how merchants set one, and where a single fixed number stops working.
- Inventory carrying cost: the formula, and the cash safety stock ties up
The inventory carrying cost formula, the five cost buckets behind it, a worked example, and how to price the cash safety stock ties up.
- SKU: what counts as one, and how a tracked-SKU limit is counted
A SKU is one distinct sellable item you stock. What counts as one on Shopify, why variants drive the number, and how a tracked-SKU limit is counted.
- ABC analysis: ranking SKUs so you watch the ones that matter
What ABC analysis means in inventory, a worked example on a 400-SKU store, and where SKU ranking stops and reorder points start.
- Dead stock: what counts, and how it shows up in your numbers
What dead stock means, how a SKU at zero sales velocity shows up in your own numbers, and how it differs from slow movers and overstock.
- Economic order quantity: the formula, and when a small store can ignore it
Economic order quantity is the order size that balances ordering cost against holding cost. The formula, and when a small store can skip it.
- Min/max inventory levels: how the method works, and its blind spot
Min/max inventory levels explained: how the two numbers work, a worked example on one SKU, and the blind spot when sales or supplier lead times change.
- Sell-through rate: the formula and how it differs from velocity
Sell-through rate = units sold divided by units available, times 100. A worked example for a Shopify SKU, and how sell-through differs from sales velocity.
- Inventory turnover: the ratio, the formula and what it tells a small store
Inventory turnover = cost of goods sold divided by average inventory.
- Weeks of cover: what it means for inventory
Weeks of cover explained: the formula, a worked example, and how it sets your reorder point against supplier lead time.
- Reorder quantity: how a suggested order amount is worked out
Reorder quantity is how many units to order when a SKU hits its reorder point. The formula, a worked example, and the inputs you choose yourself.
- Lead time demand: the units you will sell while the order is in transit
Lead time demand is the units you sell while a purchase order is in transit. The formula, a worked example, and how it feeds your reorder point per SKU.
- Days of inventory on hand: the formula and what a healthy number looks like
The days of inventory on hand formula, worked through on a real SKU, plus how to judge it against your supplier lead time.
- Stockout: what running out actually costs a small store
A stockout is when a SKU hits zero and a ready customer cannot buy. What causes one, what it costs a small store, and the related inventory terms.
- Sales velocity: units per day, and why the window matters
What sales velocity means in inventory, how a 7, 14 or 30 day window changes the number, and a worked example of the difference it makes.
- Reorder point: the formula, worked through on a real SKU
Reorder point = average daily sales x lead time in days + safety stock.
- Lead time: the number only you can supply
Lead time is the days between placing a purchase order and stock being sellable. How to measure it per SKU and use it to set a reorder point.
- Safety stock: what it is and how merchants size it
What safety stock is, two common ways to calculate it, a worked example with numbers, and how the buffer feeds into your reorder point per SKU.