Loading
GrainlineCommerce
LOGIN
Operations Math
Growing an eCommerce brand usually breaks down at the inventory planning stage. You look at your sales numbers in Shopify, order what feels right, and end up with either way too much dead stock or entirely missing out on peak demand.
The fix is straightforward. If we apply a few strict formulas to the raw data, we get a completely accurate view of the actual demand and what you need to buy.
The biggest mistake is taking a monthly sales number and dividing by 30. If you were out of stock for 10 days, the true velocity is much higher than what that raw monthly number implies. You also only care about the units that do not get returned.
Days In Stock = Total Days - Zero Inventory Days
Gross Velocity = Units Sold / Days In Stock
Net Daily Sales = Gross Velocity × (1.0 - Return Rate)
A "20% off" sale rarely means your margins took a 20% hit. Between stacked coupons, varied channel pricing, and partial cart discounts, the realized discount depth is the only metric you should trust.
Discount Depth = 1.0 - [ Total Revenue / (Units Sold × MRP) ]
If the True Discount Depth creeps above the planned promotional budget, the unit economics break down entirely, regardless of how fast you sell.
You need to track how efficiently an influx of inventory turns into cash. The Sell-Through Rate must be calculated relative to the exact batch of inventory you brought in.
Sell-Through Rate = Units Sold / Stock on Hand Before Restock
A high Sell-Through Rate indicates high capital efficiency. A low rate means capital is trapped on shelves, destroying your ability to fund marketing and growth.
How much should you actually order today? The Open-to-Buy calculation takes the True Velocity, accounts for lead times, and subtracts the inventory already in the pipeline.
Target Cover = Net Daily Sales × (Lead Time + Buffer Days)
Total Pipeline = Stock on Hand + Inbound Transit
Open-to-Buy = Target Cover - Total Pipeline
For a hero product, the pipeline looks like this.
| Variable | Input | Calculated Metric |
|---|---|---|
| Velocity | 3,000 units sold over 30 days (out of stock 10 days) | 150 Gross Daily Velocity (3000 / 20 days) |
| Returns | 20% Return Rate | 120 Net Daily Sales (150 * 0.8) |
| Target Cover | 30 days lead time + 30 days buffer | 7,200 Units Required (120 * 60 days) |
| Pipeline | 2,000 in warehouse + 1,000 on a boat | 3,000 Total Pipeline |
| Final OTB | Target Cover - Total Pipeline | 4,200 Units to Order |
Are you still relying on raw Shopify sales data to make your largest capital allocation decisions?
Bad data and gut feelings are trapping capital. We run the numbers through our engine and show exactly what should be ordered.