Click the image to sign up. Regarding inventory, I think every distributor friend has something to say. Besides the year-end factory stock pressure, there are various promotional discount policies on ordinary days. As a result, most distributors will fill their warehouses with goods. However, some distributors will find that our goods sometimes sell fast and sometimes slow. If we don't stock up, we see others selling while we don't. If we stock up, sales move slowly. What exactly should we do? We generally believe that all sales data comes from the peak season, because sales move fast in the peak season, especially for distributors of ice cream and frozen foods. They think that product inventory and turnover seem to have nothing to do with off-season sales on the surface, only with peak-season sales. So in the off-season, distributors do not care about product inventory and turnover days, but instead try to increase sales through promotions and other activities. Actually, this is incorrect, because without analyzing product inventory and turnover days, you cannot accurately grasp the purchase, sales, and inventory situation of products, thereby affecting the sales analysis and forecast of products. The relationship between inventory and turnover We know that product inventory is generally a dynamic quantity. Except for dead stock items whose inventory does not change, all product inventory will change correspondingly within a certain period with the purchase and sale of products. Grasping the change in product inventory means grasping product sales. The turnover days of a product are an indicator to judge the sales movement of the product. The analysis of turnover days should not be for a single product, but for small categories, medium categories, and large categories. The formula for calculating turnover days: Turnover days = Current inventory quantity / Current daily average sales quantity From this formula, it can be seen that you cannot simply say that large turnover days mean slow sales, and small turnover days mean fast sales, because the inventory quantity is a determining factor here. Under the premise of unchanged sales, if inventory is large, turnover days will become larger; similarly, if inventory is small, turnover days will correspondingly become smaller. Therefore, it is uncertain to determine whether a product is selling well or not by looking at turnover days alone. Only after paying attention to the product's inventory can you make a correct judgment. Suppose a product sells an average of 10 units per day, and the current inventory is 100 units, then the turnover days are 100/10 = 10. But if the inventory increases to 200 units, the turnover days become 200/10 = 20 days. You cannot say that this product is a slow seller; you can only say that the inventory is too large. Similarly, if the inventory is 50 units, the turnover days become 5 days, and you cannot say it is a fast seller. In the above example, the sales of the product have not changed at all, but the turnover days have three different values. Similarly, if sales change, the turnover days will also change accordingly. So when analyzing sales, do not simply draw conclusions from one or two data points; all related factors should be analyzed. Do you know the related terms for inventory? What we usually call inventory is actually an uncertain statement, because at this time you do not know whether it refers to inventory quantity or inventory amount. But generally, when referring to a single product, it means inventory quantity; when referring to a category of products, it means inventory amount. Zero inventory products: Products that show no inventory in the computer system. Zero inventory products include two aspects: have sales but no stock, and no sales and no stock. Dead stock products: Products that have inventory but no sales for a long period of time. Unreasonable inventory: The portion of inventory whose actual turnover days are greater than the set turnover days. Inventory structure: The proportion structure of the amounts of various parts of products that constitute the total inventory amount. How to guide sales through inventory analysis Carefully analyze various inventories and maintain reasonable inventory. The analysis of inventory structure is a very important aspect. It allows you to clearly understand why there is inventory but no sales, and why stores often run out of stock, because within the inventory allowed by your company, there is too much unreasonable inventory. The analysis of problems must be in-depth and detailed, down to small categories, or even specific to a single SKU. Comparative analysis of before and after periods, and comparison between off-season and peak season, can allow you to be at ease when selecting products for promotion. Analysis of the same period last year, and comparison of the same period across different years, can fully determine whether your judgment is correct or not. Determine the inventory amount and turnover days that conform to the actual situation. The turnover days of products should change accordingly due to seasonal influences. Due to the difference between computer data and actual inventory, we cannot expect to make completely correct judgments just by looking at the computer. You need to arrange personnel to regularly count inventory, discover problems in time, and solve them, so as to truly grasp the sales situation of a category or a single product. Article source: Frozen Food Marketing