Inventory management, is the basis of supply chain management, is also one of the core capabilities of an e-commerce company.

Inventory redundancy, occupying more cash flow, sales will cause losses. Lack of inventory will easily lead to out of stock, users will go to other platforms to buy, resulting in sales loss and user loss. Three or four years ago, the Internet had a number of start-up stars in the e-commerce industry, many of whom died due to poor inventory management.

A lot of inventory analysis is not into the inventory structure, or simply look at the inventory and ranking is called inventory analysis, inventory analysis should be a simple to complex, from macro to micro process.

The core index

Overall objective: Optimize the inventory structure to the best, and control the sell-out rate, turnover days and other indicators within a reasonable range

  • Inventory turnover days DOH = outgoing quantity/((opening stock + ending stock) /2) = sales quantity/((opening stock + ending stock) /2) Review the safety of inventory from a financial perspective
  • Inventory days/DOS = ending inventory amount (one stage sales/sales sales amount of the number of days) = ending inventory amount/a cycle of the average daily sales amount is to explore the future, the quantitative measure of rolling stock change effectively, is also used to measure inventory tracking indicators of sustainable sales time, determine whether there is a shortage of risk
  • Sold out rate = sold quantity within a certain period of time/(inventory quantity at the beginning of the period + purchase quantity during the period) — The category of futures orders need to see this index. FMCS that can be replenished at any time do not need to see this index (pay attention to the calculation time of sold out rate and the corresponding caliber)
  • Age: The age of the goods
  • Discount rate = actual sales amount/commodity tag price
  • Moving pin rate = number of SKUs sold in a certain period/(number of skUs of goods in stock at the beginning of the period + number of skUs of new goods in the period)
  • Out of stock rate = number of goods with out of stock record in a period/(SKU number of goods in stock at the beginning of the period + SKU number of new goods in the period)

Inventory structure analysis

The following is a more commonly used inventory report, through SKU number, inventory number, moving pin rate, sold out rate indicators, constitute a complete inventory analysis report. Through this table, we can not only see the inventory structure of the store, but also see whether the sales progress of each category meets the expectation, so as to assess the inventory risk (such as the current and target sell-out rates in the table).

Inventory analysis method

The following are common methods of inventory analysis, which are often used in inventory analysis:

1. The 80-20 principle

  • Sales of goods in the top 80% of inventory: observe whether the ratio of stock to sales is out of balance
  • Inventory of 80% of goods before sale: observe whether the ratio of stock to sales is out of balance

2. Price segment analysis

  • Inventory analysis of different unit price commodities: Inventory of mainstream price commodities of each category/brand to see whether the mainstream price commodities are out of stock and non-mainstream price commodities are in inventory accumulation
  • Inventory analysis of goods with different tag prices: Inventory situation of each category/brand with different tag prices, to see whether the inventory of mainstream price band is sufficient, and whether the inventory of non-mainstream price band is piled up (unit price is also related to discount/gross profit, tag price can sometimes better reflect the problem)

3. Three-degree ANALYSIS of SKU

  • Category breadth: Whether the data of the product category purchased is sufficient to compare with the industry
  • SKU width: what is the richness of the purchased SKU? SKU of non-standard products pays attention to width. Is the mainstream SKU purchased
  • SKU depth: total quantity of goods/total quantity of SKU (depth of each category/brand), whether the depth of popular SKU is sufficient, whether the unsalable SKU is shallow

4. Reasonable inventory structure analysis

  • Head: explosive style, inventory can be deep, prevent out of stock
  • Waist: Rich SKU width, stock not too deep
  • Tail: broken color broken code of goods, or some unmarketable goods

5. Four quadrant analysis method

Make a four-quadrant graph between inventory days and inventory turnover (abscissa is inventory days, ordinate is inventory turnover). The standard inventory is 30 days, and the standard quarterly turnover rate is 3. The SKUS inside the yellow circle are basically fine, but the SKUS in the fourth quadrant (high inventory days, low turnover) may be at risk of high inventory.

SKU at the second site has low inventory days and high turnover rate, which may lead to the risk of out of stock.

6. Special inventory analysis

  • Zero sales but inventory of goods: need to analyze because the traffic is not delivered or there is no traffic conversion
  • Items on sale but out of stock: these items will not be left out
  • Goods with abnormal number of days in stock (including abnormally large or abnormally small number of days in stock, or unchanged for a long time)
  • Invalid stock (including fake stock or dead stock) : stock that is in stock but has never been sold, and some stock that is out of color and out of code
  • Seasonal inventory: especially non-standard products, need to analyze the effect of seasonality
  • Promotional inventory: inventory status before/during/after promotion, and the corresponding sell-out rate
  • Negative gross margin goods: negative gross margin goods, whether the negative gross margin is caused by out-of-season goods, broken color and size, or the negative gross margin is caused by excessive promotion

The above.