The Inventory Performance Dashboard provides key insights into inventory trends and provides an Inventory Reordering tool, leveraging proprietary Treez metrics like Sellable Velocity to make smarter purchasing decisions for your dispensary. By analyzing inventory metrics and sales velocity, retailers can optimize stock levels and avoid both overstocking and stockouts. The dashboard offers a clear view of inventory carrying costs, cost of goods sold (COGS), and key performance ratios to support decision-making.
The Inventory Performance dashboard, including the Inventory Reordering tool utilize the Analysis Period control at the top of the dashboard. By default, 30 days is the selected look back period, but this can be extended up to 90 days' worth of Inventory Performance data.
Inventory Performance Overview
This section summarizes key inventory and sales performance metrics:
Average Inventory Carrying Costs: The average of the carrying costs on the initial date in the analysis period and the final date in the analysis period. This is based on the base cost paid for each inventory package. The carrying costs are calculated from an end-of-day inventory valuation for the days mentioned. This should be viewed as "the average amount inventory in stock, based on the amount paid for unsold goods to vendors".
Cost of Goods Sold (COGS): The cost associated with the products sold, derived from the base cost of the units on the Invoice from when the products were purchased. This excludes any excise tax paid to Distributors (relevant for California customers, prior to Jan 1, 2023). This should be viewed as "the amount paid for the goods sold during the analysis period".
Net Sales: Gross Sales minus Discounts and Returns. This should be viewed as the "revenue generated over the analysis period".
Inventory Turnover Ratio: This metric indicates how quickly inventory is sold and replenished. A ratio of 1.0 suggests the inventory turns over once during the analysis period. This is calculated as the Cost of Goods Sold divided by the Average Carrying Costs during the analysis period.
Stock-to-Sales Ratio: This ratio compares the Average Inventory Carrying Costs to the Net Sales of inventory, indicating how much inventory is held per dollar of net sales. For example, a ratio of 0.55 means $0.55 in inventory carrying costs for every $100 in net sales.
These metrics help retailers monitor their inventory health and ensure that stock levels align with sales demands. Monitoring these metrics in relation to changes in purchasing strategy (i.e. SKU reconciliation, assortment changes, etc.) can lead faster inventory throughput and less waste.
Inventory Trends
These time series charts offer dynamic insights into various aspects of inventory performance over time. Understanding how these metrics evolve allows dispensary operators to make informed decisions about inventory management, stocking strategies, and overall operational efficiency.
Cost of Goods Sold (COGS) vs. Carrying Costs
This chart helps track the relationship between the direct costs associated with sold products (COGS) and the costs of holding unsold inventory (carrying costs). Monitoring this over time enables retailers to evaluate how much of their budget is tied up in unsold goods and adjust their procurement strategy.
If carrying costs consistently exceed COGS, it may indicate overstocking issues or slow-moving products. Conversely, low carrying costs relative to COGS can signal efficient inventory turnover but could also point to stockout risks if not monitored closely.
Markup % vs. Gross Margin %
This chart compares the markup percentage (how much the price is increased over cost) to the gross margin percentage (what remains from sales after covering the cost of goods). This provides a quick snapshot of pricing effectiveness and profitability.
If the gross margin is shrinking while the markup remains stable or increases, it may signal rising costs or discounting practices that are eating into profitability. By identifying trends, operators can make strategic adjustments to pricing or sourcing to protect margins.
SKUs Carried vs. SKUs Sold
Tracking the number of distinct products (SKUs) carried versus those sold helps retailers evaluate the diversity of their inventory compared to actual customer demand. This chart highlights whether you are over or under-diversifying your product selection.
If the number of SKUs carried is significantly higher than those sold, it could suggest that a large portion of inventory isn’t moving, which increases the risk of overstocking and higher carrying costs. Monitoring this trend enables better SKU rationalization, ensuring that the products stocked align with customer preferences.
Total Units Remaining vs. Sellable Units Remaining
This chart contrasts the total units remaining in inventory with sellable units, offering insight into the sellable assortment of inventory compared to the inventory that cannot generate revenue. It helps determine whether enough sellable inventory is on hand to meet demand.
If the gap between total units and sellable units widens, it may indicate issues like poor restocking practices, an abundance of damaged or returned goods, or over-purchasing. Identifying these trends early allows retailers to address inventory management issues and improve the availability of sellable stock.
Units in Inventory vs. Units Sold
This chart helps compare the volume of inventory on hand with the volume of units sold over time. It’s a key metric for identifying stock imbalances, ensuring that stock levels match sales velocity.
A steady or increasing inventory level without a corresponding increase in units sold can indicate overstocking or slow sales, potentially leading to higher carrying costs and spoilage. On the other hand, declining inventory without replenishment may risk stockouts and lost sales opportunities. Adjusting procurement strategies based on these trends can help maintain optimal stock levels.
Inventory Reordering
For purchasers looking to make a purchase order to a vendor, the Inventory Reordering tool provides intelligent reorder quantities for products based on current stock levels and sales velocity.
Key metrics include:
Current Units Remaining: The amount of product left in stock.
Suggested Reorder: The recommended quantity to reorder based on sellable velocity and stock levels.
Sellable Velocity: The rate at which the product is sold when sellable over the selected analysis period.
Days Remaining Inventory: Estimated number of days left before stock runs out, based on sellable velocity and current stock levels.
Days Out of Stock: Number of days the product has been out of stock over the selected analysis period.
Days Unsellable: Number of days the product was not available for sale over the selected analysis period either due to stockout, or due to lack of sellable inventory.
Retailers can use this information to prioritize reordering for high-velocity products to avoid stockouts and manage inventory efficiently.
The Suggested Reorder Amount can be derived as: Product Sellable Velocity (over the analysis period) multiplied by the Reorder Period (days) minus the Current Units Remaining.
Customizing your Reordering View
The Inventory Reordering tool allows further customization to match the workflows of a purchasing manager, such as:
Reordering enough inventory for a desired period of time (1-90 days)
Reordering based on different product attributes such as:
Product Name
Product Line containing the Brand, Product Sub Type, and Size
Product Line containing the Brand, Product Sub Type, Size, and Classification
Product Brand and Type (e.g. STIIIZY - Cartridge)
Reordering based on a centralized fulfillment model by reordering across All Stores in the Organization based on the performance and inventory levels of products across all stores in the organization
Dashboard Controls
Further, purchasers can narrow the scope of the entire inventory dashboard to just a smaller selection of Stores, Product Types, Brands, Sizes, or Distributors. This can be accomplished using the controls pinned in the Control Panel at the top of the dashboard.
They can also choose to exclude Sample Inventory (derived based on common naming conventions).
For detailed metric definitions, visit the Retail Analytics Glossary.