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Cash Tied Up in Stock: Assess Inventory and SKU Profit Together

Connect sales velocity, days of cover, purchase cost and contribution before replenishing stock or discounting an SKU.

ProfitVena: inventory boxes, slowing sales and cash committed to stock

A product sells every day. Does that mean its inventory is working efficiently? Not necessarily. When many units remain while sales velocity slows, purchasing cash can stay tied up longer than planned. Check both contribution per sale and capital committed to current stock.

Review one SKU in five steps

  1. Fix the date and available stock. Use one seller account, warehouse, SKU, and fulfillment model. Separate physical units, available units, reservations, and goods in transit. Do not subtract reservations twice if “available” already excludes them. Record source freshness.

  2. Calculate velocity over a comparable window. Suppose 60 units were purchased over 30 days and 150 are currently available. The average is 2 units per day, suggesting about 75 days of coverage. This is an illustrative example. Stockout days, a promotion, or a seasonal peak can distort the average, so compare more than one window.

  3. Estimate cash tied up in stock. At a confirmed purchase cost of ₽500 per unit, 150 units represent approximately ₽75,000 in purchase cost. This is neither a loss nor a complete accounting valuation; delivery, returns, damage, and cost policy can alter it. Use the same method when comparing SKUs.

  4. Compare stock with contribution. A product can have positive margin per unit but return invested cash slowly. Write down contribution after confirmed variable costs, sales velocity, days of stock, and possible storage costs. Slow turnover is not automatically bad; seasonal inventory may be deliberate.

  5. Choose an action and review date. Options include pausing replenishment, checking price or listing quality, transferring stock, or testing a careful promotion. Recalculate contribution after any discount first: selling below variable cost only accelerates a loss. Assign an owner and revisit the figures in a week.

One example, two decisions

In the illustrative example, 150 available units at 2 units a day imply about 75 days of cover, while 150 × ₽500 represents about ₽75,000 of purchase cost in stock. Compare two choices: another order extends cover; a discount may accelerate sales but reduce contribution per unit. Record the expected velocity, contribution after discount and date for another check before acting.

ProfitVena helps compare sales, inventory and SKU economics with source and freshness context. Wildberries can be connected; other supported data can be imported through Excel/CSV. API availability is marketplace-specific, and results depend on data coverage and configured costs. The technical part has been updated in ProfitVena.

If the opposite risk is a stockout before replenishment arrives, use this days-of-cover guide. ProfitVena is part of the Wicsora ecosystem.

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