Calculating Velocity on the Inventory Screen
Overview
Velocity represents the number of units sold per day over a given date range. It is a critical metric on the Inventory Screen because it drives reorder calculations and stock-out forecasting. Understanding how velocity is calculated helps you make better restocking decisions.
What Is Velocity?
Velocity = Units Sold / Number of Days in the Period
This gives you the average daily sales rate for a product, which SellerLegend uses to estimate when you will run out of stock and how many units you should reorder.
Calculation Methods
Several methods are available for calculating velocity:
Date Range Period
Uses the date range currently selected in the date picker. The velocity is calculated based on the units sold during that specific period.
Custom Velocity Periods
You can configure custom velocity periods in your inventory settings to define exactly which time frame should be used for the calculation.
Excluding Out-of-Stock Days
For a more accurate velocity figure, you can choose to exclude days when the product was out of stock. This prevents periods of zero sales (due to no inventory) from artificially lowering your velocity.
Setting the Product Creation Date
For accurate velocity calculations, ensure that the Creation Date is set for each product. If the Creation Date is NULL, the velocity calculation may not reflect the true sales rate because the system does not know when the product first became available.
To set the Creation Date:
- Navigate to the product's settings and enter the date the product was first listed or became active
How Velocity Drives Other Metrics
| Metric | How Velocity Is Used |
|---|---|
| Days of Stock Remaining | Current stock / Velocity |
| Stock-Out Date | Today + Days of Stock Remaining |
| Reorder Quantity | Based on velocity and lead time |
| Reorder Date | Stock-Out Date minus lead time |
Key Points
- Velocity is the foundation of all inventory reorder calculations in SellerLegend
- Excluding out-of-stock days gives a more realistic picture of actual demand
- Always set the product Creation Date to avoid inaccurate velocity figures
- Review and adjust your velocity calculation method based on your business needs -- seasonal products may benefit from shorter, more recent date ranges