How to use sales data to make better inventory decisions

Every supplier order is a bet. Order too much and your cash sits in the stockroom until it goes on clearance — or in the bin. Order too little and your shelves go empty, sending customers somewhere else. Most merchants place this bet on instinct: habit, memory, and “it’s been moving lately.”

Instinct has real value — you know your customers better than any spreadsheet. But instinct fails in predictable ways: it overweights what you saw recently and forgets what you’ve stopped looking at. Your sales data corrects exactly those blind spots. Here’s how to use it without giving up your evenings.

The base number: sales velocity

For every product you reorder regularly, one question matters most: how many units sell per week, on average? That’s the sales velocity. You can get it from your register reports: take the last 4 to 8 weeks of sales and divide by the number of weeks.

With velocity in hand, an order becomes simple arithmetic: how many weeks this order needs to cover, times the velocity, minus what’s still on hand. If your supplier comes every two weeks and a product sells 12 units a week, the order should bring your stock to around 24 units, plus a safety cushion.

Three adjustments that make the difference

• Seasons: velocity from the last 4 weeks misleads right before a season change or a holiday. When you can, also look at the same period last year.
• Promotions: if a product was on promo during the measured period, its velocity is inflated. Measure over a normal stretch, or note the gap.
• Supplier lead time: the longer the gap between ordering and receiving, the bigger the safety cushion needs to be. A stockout during the lead time is a stockout you ordered.

What about new products with no history?

A never-sold product has no velocity — but it has comparables. A new flavour from the same brand, a different format of a known product: start from the velocity of the closest match, then order conservatively. The healthy rule for novelties: a small quantity, a genuine spot on the shelf, and a check-in date six to eight weeks out.

That’s the opposite of the common reflex — ordering big “because the rep had a deal.” A case discount is worth nothing if half the case sleeps in the back room for a year.

Supplier “deals”, seen through your numbers

Volume discounts are tempting: ten cases for the price of nine. With velocity in hand, the decision becomes a calculation instead of a reflex: ten cases equals how many weeks of stock? If the answer is “four months,” you’re paying for that discount in frozen cash, stockroom space, and expiry risk. The simple rule: a deal is only a deal if the quantity sells through within a window you accept in advance — not the one the rep is hoping for.

The routine before every order

1. Pull sales by product since the last order (or the past 4 weeks).
2. For your top 20–30 products, compare velocity against remaining stock: what risks running out before the next delivery?
3. Spot what barely moved: cut or skip those lines, even if “we always order them.”
4. Write down your deliberate exceptions — “extra juice for the heat wave coming” — so you can check later whether the hunch was right.

What actually changes

Buying from real sales produces three very tangible effects: fewer stockouts on your best products, less cash frozen in slow movers, and stronger conversations with suppliers — because you know precisely what turns. Nothing spectacular overnight; but order after order, your stockroom, your cash position, and your shelves start looking different.