Inventory Velocity: Formula To Calculate + How To Improve It

Summary

The episode explains inventory velocity—a metric that measures how quickly ecommerce businesses sell through stock—and why it’s vital for cash flow, storage costs, and competitive fulfillment speed. It walks listeners through the simple formula (units sold ÷ time period) and highlights factors that affect velocity, such as demand trends, supplier lead times, and operational efficiency. Seven actionable strategies are offered, from accurate demand forecasting to multi‑location inventory distribution and FIFO practices, with real‑world quotes from ShipBob partners. Finally, the show showcases how ShipBob’s fulfillment network and technology platform help brands monitor and boost inventory velocity for growth and better customer experience.