---
title: "Sales Management Practice: The 1.5x Principle and Inventory Turnover"
description: "Sales personnel must master inventory management knowledge and skills, which include the 1.5x principle and inventory turnover. The 1.5x principle is a safety stock guideline based on previous sales, while inventory turnover ensures fresh products are displayed and sold."
author: "詹居臻"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2014-09-01"
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# Sales Management Practice: The 1.5x Principle and Inventory Turnover

> Sales personnel must master inventory management knowledge and skills, which include the 1.5x principle and inventory turnover. The 1.5x principle is a safety stock guideline based on previous sales, while inventory turnover ensures fresh products are displayed and sold.

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Sales personnel must master inventory management knowledge and skills when handling business. Inventory management has two aspects: the 1.5x principle and inventory turnover, which are explained below.

**1. The 1.5x Principle**

The 1.5x principle is one of the main contents of inventory management. It is a safety stock principle summarized from many companies' sales practices. The specific data is based on the customer's sales volume in the previous period, serving as the basis for recommending orders in the current period. Stocking according to the 1.5x principle is one of the job responsibilities that sales personnel must master. It is a marketing strategy to proactively win customer orders and always grasp the customer's sales situation. It is built on increasing customer sales and benefits, thus winning customer trust and making it easy for customers to adopt.

The 1.5x principle is also a scientific basis. However, like many marketing rules, it must be applied flexibly to avoid rigid application. For example, special situations (such as weather, holidays, etc.) should be adjusted accordingly; otherwise, business may be affected.

When used well, the 1.5x principle ensures customers have sufficient inventory, reduces the possibility of stockouts and sellouts, ensures customers can always buy the products they need, and helps customers not miss any sales opportunity.

**(1) Relationship between the 1.5x inventory principle and order making**

When sales personnel make sales visits, they should suggest a reasonable order quantity to the customer. This is "making orders," one of the tasks that sales personnel must do during customer visits. Making orders means suggesting a reasonable order quantity based on the customer's sales in the previous period, combined with new promotional activities, seasonal opportunities, weather, and other factors, and mobilizing the customer to order as suggested. When making orders, the data recorded on the customer card is used, so the prerequisite for making orders well is to fill in the customer card correctly. Only in this way can the 1.5x principle be effectively used for inventory management, improving visit efficiency and effectiveness, and maximizing sales expansion. This is also one of the key responsibilities of sales personnel, directly affecting sales.

Some sales personnel work with the mindset of "taking orders." Taking orders is different from making orders; one is passive, the other active. Taking orders means the initiative is in the customer's hands, while making orders is proactive, based on research of the customer's sales and inventory. Obviously, the two methods have completely different effects. Making orders ensures accurate understanding of the customer's sales situation and ensures the most effective use of the customer's funds, space, energy, and time, creating maximum profit.

**(2) Steps for making orders**

"Making orders" should follow these steps:

Step 1: Check the data on the customer record card.

Step 2: Calculate the actual sales since the last visit.

For example: inventory at the last visit; order quantity at the last visit; current inventory at this visit. These data have been filled into the customer card by the sales representative during visits. When calculating sales since the last visit, the sales representative will use them, so these data on the customer card must be accurate.

Step 3: Suggest a new order quantity.

When suggesting a new order quantity, emphasize the 1.5x safety stock principle. The specific calculation method is as follows:

Safety stock = actual sales since last visit × 1.5
Suggested order quantity = safety stock - current inventory

**(3) How to get customers to accept the order plan under the 1.5x principle**

In actual work, many sales personnel are very clear about the above steps and can accurately calculate the order quantity according to the 1.5x principle, but they cannot get orders that meet the principle. How can this situation be avoided?

The key is to master the skills of getting customers to accept suggestions when making orders. Some customers do not understand the benefits of making orders according to the 1.5x principle. Sales personnel must make customers understand:

The order quantity suggested by this principle is reasonable, ensuring customers maintain appropriate inventory levels, avoiding stockouts, and making efficient use of shelf space.

With a certain amount of inventory, consumer purchase needs can be met, and no sales opportunity will be missed.

The 1.5x inventory principle helps customers effectively use space and funds, avoiding losses such as product backlog, ineffective occupation of funds and space.

The 1.5x inventory principle combined with inventory turnover ensures that customers always provide consumers with fresh products, which can improve the point-of-sale image and drive sales of other products.

Let customers understand that the work sales personnel do is to help customers better meet consumer needs and increase customer sales and profits.

Sales personnel must use their knowledge and skills to gain customer trust. Once trust is established, customers will accept the suggestion to make orders according to the 1.5x principle.

If sales personnel strictly follow the visit route and frequency, and each customer visit has a certain cycle, they can also inform customers that 1.5x safety stock can effectively ensure that during this visit cycle, there is neither stockout nor overstock.

**2. Inventory Turnover**

Inventory turnover is a main content of customer inventory management and one of the important job responsibilities of company sales personnel. Products sold to customers cannot be sold out immediately; they will last for a period, and inventory always exists. For food, it is more complex because there is a shelf life issue. Therefore, inventory must be managed scientifically and effectively.

**(1) What is inventory turnover?**

The main content of inventory management is inventory turnover. What is inventory turnover? It includes two types: front-line inventory and backup inventory turnover. Front-line inventory refers to bulk products displayed on shelves or in the retail environment; backup inventory refers to goods stored in the warehouse for replenishment. Inventory turnover includes the turnover of front-line and backup inventory. It requires sales personnel to replenish goods on the customer's shelves in a timely manner, ensuring that product displays meet the standards of visibility, and to follow the first-in, first-out principle for inventory turnover, aiming to ensure that the products customers provide to consumers are always fresh. In fact, inventory turnover is the circulation of temporarily unsold products on the shelves according to the first-in, first-out principle.

Inventory turnover is a daily task that sales personnel must do during sales visits, ensuring that customers provide consumers with products with the latest production date. Inventory turnover is not only an important responsibility of sales personnel, but also requires guiding and influencing customers to do daily inventory turnover. Sales personnel must make customers understand:

Inventory turnover can effectively and directly stimulate sales. Obviously, if products displayed on the shelves are sold out and not replenished in time, many sales opportunities will be lost, and products stored in the warehouse cannot be sold, and lost sales opportunities will never come back.

No inventory means no profit. Products not on the shelves cannot be sold. Reasonable product inventory is the simplest way to ensure products are available for sale.

Promote restocking and help customers correctly prepare product inventory. Most customers decide the variety and quantity of orders based on their inventory situation. If products in the warehouse are almost gone or already gone, the store owner will order. So if sales personnel help customers put their inventory products on the shelves, emptying their warehouse, they will naturally order.

Sales personnel helping customers replenish shelves during daily visits not only stimulates sales but also saves customer time and their own time. This work is not only the responsibility of sales representatives; senior sales supervisors and managers should also help customers with inventory turnover when visiting retailers, and influence customers to help with timely replenishment. Excellent companies and sales personnel understand that sales work is not just about selling products to customers; it is not complete until consumers buy and actually consume fresh products. To ensure consumers buy fresh products, following the first-in, first-out principle can avoid product expiration, avoid customer returns, better meet consumer needs, and ultimately win sales and profits for customers.

**(2) How to conduct inventory turnover?**

How to conduct inventory turnover? Sales personnel should replace defective products in a timely manner according to company regulations and standards, manage customer inventory, strive to be professional advisors to customers, and proactively provide comprehensive inventory management services, not just "taking orders." To achieve this, sales personnel must:

Have comprehensive knowledge of company products, such as shelf life, meaning of codes, product storage conditions, etc. For example, placing products in direct sunlight can cause fading, affecting quality and making them hard to sell.

Second, sales personnel must understand the applicable scope of various packaging and the amount of inventory. That is, by understanding consumer and customer needs, understanding various brands and packaging knowledge, and recommending the correct packaging and brand product mix to customers, this is a prerequisite for ensuring customers are selling products that meet consumer needs and for customer management.

Third, deeply understand the principles of inventory turnover. Three principles must be followed: manually turn over products displayed on shelves; implement the first-in, first-out principle; record inventory numbers in the customer card.

In addition, inventory turnover also requires methods and skills. Comprehensive product knowledge helps master shelf life, storage conditions, and the best timing for consumer purchase; familiarity with the applicable scope of various packaging and inventory levels helps sales personnel judge the distribution standards implemented by different retailers and set appropriate inventory levels based on the retailer's shipment situation; opportunity forecasting helps sales personnel think more rationally and consider factors affecting business in advance, such as seasonal effects; understanding operational and space constraints helps you develop different business propositions based on these situations and successfully sell to retailers, thereby gaining cooperation and opportunities to promote performance improvement; merchandising activities can obviously increase sales through on-site sales stimulation.

For example, inventory turnover has many tangible benefits for customers. Mainly, helping customers manage shelf and backup warehouse inventory saves customer time; saves manufacturer time; accurate inventory turnover allows knowing inventory levels at any time, judging sales conditions, and doing replenishment work well; and so on.

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