Tracking Inventory Usage For Ecommerce Brands, Turn Data Into Cash Flow And Fewer Stockouts

Executive TLDR

Inventory usage sounds like a dry accounting term. In reality, it is one of the clearest windows into your cash flow, your risk of stockouts, and how fast your products are really moving.

If you ship small, light, non fragile products like supplements, vitamins, cosmetics, wellness items, snacks, or subscription kits, mastering inventory usage is a quiet superpower. It helps you stay in stock, free up cash, and grow without guessing.

In this guide, you will follow a fictional brand, Riverbend Nutrition, as they move from gut feel and spreadsheets to a clear, data backed view of inventory usage with
Product Fulfillment Solutions as their 3PL partner in Cincinnati, Ohio.

You will see how to:

• Define inventory usage in plain language and link it to day to day decisions
• Spot the warning signs that your usage tracking is not working
• Use simple formulas to calculate usage in units and dollars
• Choose the right way to track usage, from spreadsheets to integrated systems
• Turn usage insights into better purchasing, fewer stockouts, and stronger cash flow

If you are tired of asking “how fast are we actually using inventory” and getting five different answers, you can start a conversation here,
Contact Product Fulfillment Solutions.

Table of Contents

• When inventory usage is your blind spot
• What is inventory usage
• Story, How Riverbend Nutrition got control of usage
• Business impacts every operator should know
• Formulas to calculate inventory usage
• Three ways to track inventory usage
• Best practices to reduce errors, shrinkage, and waste
• Turning inventory usage insights into growth moves
• How Product Fulfillment Solutions helps you track usage
• Inventory usage FAQs

When inventory usage is your blind spot

Riverbend Nutrition thought they had a handle on inventory. They ran cycle counts, reconciled stock at month end, and kept an eye on the warehouse.

But when leadership asked simple questions like:

• “How long will this SKU last at our current pace”
• “Where are we tying up too much cash in slow movers”
• “What happens to usage if our next campaign hits its goals”

The answers were vague.

• Spreadsheets said one thing, the warehouse floor suggested another
• Purchasing tried to protect against stockouts by ordering “a little extra”
• Finance worried that too much cash was parked on racks instead of fueling growth

On the surface, orders were shipping. Underneath, no one felt completely confident about how fast inventory was being used or how long it would last.

What is inventory usage

Inventory usage is a way of describing how quickly your stock is being consumed over time.

Put simply, it answers questions like:

• How many units of this SKU are we using per day, week, or month
• Given what we have on hand, how many days or weeks of supply do we have
• How much cash is tied up in that supply at current usage rates

Usage is not just a warehouse metric. It affects:

• How confident you feel running promotions and seasonal campaigns
• Whether you can say yes to big wholesale or retail orders without risking stockouts
• How much working capital is free for marketing, new products, or hiring

When you track inventory usage clearly, stock stops feeling random. It becomes a lever you can plan, measure, and adjust.

Story, How Riverbend Nutrition got control of usage

Riverbend Nutrition sells daily vitamin packs and wellness bundles. Their products are small, light, and perfect for parcel shipping. On paper, their inventory should have been simple.

The “before” picture, plenty of data, not enough clarity

Here is what their reality looked like before they tightened up usage tracking:

• Spreadsheets in different teams, purchasing, finance, and operations all had their own views
• Cycle counts revealed gaps between system inventory and what was on the shelf
• Fast moving SKUs felt like a constant fire, slow movers quietly collected dust
• Forecasts were more “hope and experience” than clear math

They were not lost. They just did not have one source of truth for how quickly inventory was being used and how long it would last at current demand.

Moving into a central 3PL environment

Riverbend shifted inventory into
Product Fulfillment Solutions’ Cincinnati, Ohio fulfillment center with a clear request.

“Help us see inventory usage by SKU and location so we can stop guessing and start planning.”

We started by:

• Cleaning up item masters and standardizing SKU level data
• Connecting their ecommerce platforms to our warehouse management system
• Setting up basic usage reports, units sold per day, per SKU, by channel
• Aligning safety stock levels with realistic lead times and demand patterns

The “after” picture, usage as a steering wheel, not a report

Within a few cycles, the tone of their conversations changed.

• Operations could answer “how many days of supply” with specific, current numbers
• Purchasing planned buys based on clear usage and lead time, not fear of running out
• Finance saw which SKUs deserved more capital and which needed to be reduced or reworked
• Marketing could say yes to campaigns knowing which SKUs could support a spike

Usage did not become perfect or static. It became visible and manageable, which made every decision calmer.

Business impacts every operator should know

Inventory usage is not just a number that lives in a report. It shows up in everyday pain points.

Cash flow and working capital

When you do not know how fast inventory is moving, you are likely to overbuy “just in case.”

• Cash ends up on racks instead of in growth projects
• Carrying costs climb as storage and insurance expand
• Old formulations, shades, or flavors can become dead stock before you realize it

Customer experience and stockouts

On the other side, underbuying or misreading usage leads to stockouts.

• Customers see their favorite SKUs marked “out of stock” during key seasons
• Support teams spend time apologizing instead of helping customers succeed
• Repeat purchase habits can break when people switch to a competitor

Forecasting and planning confidence

Usage data feeds every major planning conversation.

• Product launches, how much initial inventory to bring in and at what pace
• Channel expansion, whether you can support a new wholesale or retail partner
• Pricing and promotion, when to run offers without risking empty shelves

Without clear usage, every decision feels like a gamble. With it, risk becomes visible and manageable.

Formulas to calculate inventory usage

You do not need advanced software to understand the basics. Two simple approaches can tell you a lot, usage in units and usage in dollars.

Usage in units, days of supply

Days of supply tells you how many days your current stock will last at your recent rate of sales.

Formula:

Days of supply = Units on hand ÷ Average units sold per day

Example:

• You have 1,000 units of a vitamin SKU on hand
• Over the last 90 days, you have sold an average of 10 units per day
• Days of supply = 1,000 ÷ 10 = 100 days

If your lead time from supplier to shelf is 45 days and you want 20 days of safety stock, that 100 day position might be too heavy. Usage gives you a way to talk about that with numbers instead of feelings.

Usage in dollars, inventory investment

Looking at usage in dollars helps you understand how much cash is tied up in a SKU at current usage rates.

Formula:

Days of supply in dollars = Inventory value on hand ÷ Average daily cost of goods sold for that SKU

Example:

• You still have 1,000 units on hand
• Landed cost per unit is 5 dollars and 50 cents
• Inventory value is 1,000 × 5.50 = 5,500 dollars
• Average units sold per day is 10, at 5.50 dollars cost each, daily cost of goods sold is 55 dollars
• Days of supply in dollars = 5,500 ÷ 55 = 100 days

Now you can talk about usage and cash in the same breath, which makes finance conversations much easier.

Usage trends, not just snapshots

Single calculations are helpful, but trends tell the real story.

• Is usage speeding up because of a new campaign or channel
• Is usage slowing down because a SKU is aging or facing new competition
• Does usage spike during certain months, days of the week, or events

When you track usage over time, you can make decisions before problems show up in stockouts or bloated inventory.

Three ways to track inventory usage

There is no single right method. The right approach depends on your size, complexity, and appetite for manual work.

1. Spreadsheets and basic reports

Many brands start here, exports from ecommerce platforms and simple formulas in a spreadsheet.

• Pros, low cost, flexible, and easy to experiment with
• Cons, manual, prone to errors, and hard to keep updated as volume grows

This can work for a while, especially if you have a small SKU count and a single channel. It becomes risky once your team is spending more time maintaining sheets than running the business.

2. Standalone inventory tools

Dedicated inventory tools offer more structure and automation.

• They pull data automatically from your ecommerce platforms
• They provide standard reports for usage, days of supply, and stock alerts
• They reduce some of the manual work and risk of spreadsheets

The main challenge is making sure those tools also talk cleanly with your warehouse or 3PL so reality matches what the system shows.

3. Usage tracking inside your 3PL environment

When you partner with a 3PL like
Product Fulfillment Solutions, usage is tracked as part of daily operations.

• Every receipt, pick, pack, and shipment updates system inventory in real time
• Usage reports pull directly from the same data that drives the warehouse
• Days of supply and usage trends can be viewed by SKU, channel, or location

This does not remove your responsibility to plan. It gives you more reliable inputs for those plans.

Best practices to reduce errors, shrinkage, and waste

Tracking usage is only useful if the data is trustworthy. These practices help keep the picture clear.

Tighten receiving and put away

• Match receipts to purchase orders and capture real quantities accurately
• Use barcodes and scan based receiving wherever possible
• Put inventory away in clearly labeled locations that match system records

Use cycle counting instead of only annual counts

Full physical counts are important for audit and reconciliation, but they do not have to be the only check.

• Cycle count high value and fast moving SKUs more frequently
• Use findings to correct system records and uncover process issues
• Treat discrepancies as signals to investigate, not just numbers to fix

Separate usage, shrinkage, and adjustments

Not every inventory reduction is usage. Some are shrinkage or process issues.

• Track customer orders separately from write offs and adjustments
• Review shrinkage patterns by SKU and location, not just in total
• Fix root causes, mislabeling, damage, or process gaps, not just the count

Turning inventory usage insights into growth moves

Usage data becomes most powerful when it drives decisions, not just reports.

Align purchasing with real usage and lead times

• Set reorder points based on days of supply, not just fixed unit counts
• Adjust safety stock for SKUs with volatile demand or longer lead times
• Reduce orders for slow movers and consider promotions or product updates

Support marketing and sales with confident promises

• Share usage and days of supply metrics with marketing and sales teams
• Plan campaigns around SKUs that can handle a spike in demand
• Set clear internal rules for what needs a usage and supply check before launch

Improve product portfolio decisions

• Use usage trends to identify true heroes, steady performers, and underperformers
• Support decisions to double down, refresh, or retire SKUs with data
• Evaluate new product launches against realistic usage expectations

How Product Fulfillment Solutions helps you track usage

Product Fulfillment Solutions is a Cincinnati based 3PL focused on ecommerce brands that ship small, light, non fragile products, supplements, vitamins, cosmetics, wellness items, snacks, and subscription boxes.

We help brands turn inventory usage from a guessing game into a daily tool by:

• Running scan based receiving, picking, and shipping from our
  Cincinnati, Ohio fulfillment center so system inventory reflects reality
• Providing SKU level views of usage, days of supply, and on hand inventory
• Supporting cycle counting and reconciliations so gaps are found and fixed quickly
• Sharing operational insights that inform purchasing, merchandising, and channel decisions

Because our facility sits in a central location that reaches a large share of the United States within one to three business days by ground, usage data can also include regional performance and network planning insights.

You work hard to create products people love. Our job is to make sure you know how fast those products are moving and how to keep that motion healthy.

Inventory usage FAQs

How often should we review inventory usage

High volume SKUs deserve frequent attention, often weekly or even daily during peak seasons. Steady sellers can be reviewed weekly or monthly. Slow movers should be reviewed at least monthly so you can adjust purchasing and avoid tying up cash for too long.

What is a good inventory usage rate

There is no single “good” usage rate that fits every brand. The right level depends on your category, margins, and lead times. In general, you want stock moving steadily without frequent stockouts or piles of dead inventory. Usage should support your growth goals while protecting cash flow.

How does inventory usage relate to inventory turns

Inventory usage and inventory turns are related ways of looking at movement. Usage often focuses on days or weeks of supply, while turns look at how many times you sell through average inventory in a period. Both help you understand how efficiently you are using stock and capital.

Can we track inventory usage across multiple channels

Yes. When your ecommerce platforms, wholesale orders, and fulfillment center are tied into a single source of truth, you can see usage by channel and in total. That view helps you decide where to allocate inventory and how to support each channel without surprises.

How does Product Fulfillment Solutions support inventory usage tracking

Product Fulfillment Solutions supports usage tracking by combining a warehouse management system, scan based workflows, and clear reporting from our Cincinnati fulfillment center. We track every movement, provide SKU level usage views, and work with your team to align purchasing, planning, and channel strategies around real numbers.