Inventory Reporting and Analytics That Actually Drive Decisions

You’ve got $800,000 worth of stock sitting in your warehouse. Some of it will sell this week. Some of it has been there since 2023 and isn’t going anywhere. Your best-selling product is probably low in stock right now, and your slowest-moving product probably has three years’ supply stacked in the corner.

Most wholesale and distribution businesses know they have inventory problems. They just don’t have the numbers to quantify them — or the reports to catch them early enough to act.

Inventory reporting isn’t about counting what’s on the shelves. It’s about understanding what your stock is doing: how fast it moves, how much it costs to hold, where the money is tied up, and what you should order next.

Stock Turnover: How Hard Your Inventory Is Working

Stock turnover tells you how many times you sell and replace your inventory over a period. It’s the closest thing to a single health metric for your stock.

How to calculate it: Cost of goods sold / average inventory value.

If your annual COGS is $2,400,000 and your average inventory value is $600,000, your turnover is 4.0 — you turn over your entire inventory roughly every 91 days.

• High turnover (6+) — Stock moves quickly, cash isn’t tied up. But watch out: too high and you risk stockouts.
• Moderate turnover (3-6) — Healthy for most wholesale and distribution businesses.
• Low turnover (below 3) — Cash is trapped in slow-moving stock. You’re paying rent, insurance, and opportunity cost on inventory that isn’t generating revenue fast enough.

Measure turnover by product category, not just business-wide. Your overall 4.0 might be masking a category at 12.0 (you can’t keep it in stock) and another at 0.8 (it’s barely moving).

Dead Stock: The Money You’ve Already Lost

Dead stock is inventory with zero sales in the last 12 months. For practical purposes, it’s never going to sell at full price.

How to identify it: Pull every SKU with zero sales in the past 12 months. Multiply quantity on hand by cost price. That’s the dead stock value sitting in your warehouse.

Most businesses that run this report for the first time are shocked. Five to fifteen percent of total inventory value in dead stock is common. For a business carrying $1 million in inventory, that’s $50,000 to $150,000 in effectively lost cash.

What to do with it: Discount aggressively (40 cents on the dollar beats zero), return to suppliers where possible, write off and clear the space. Most importantly — stop reordering it. Automated reorder points set years ago might still be triggering purchase orders for items that no longer sell.

ABC Analysis: Focus Where It Matters

ABC analysis classifies inventory into three tiers based on revenue contribution:

Category	% of SKUs	% of Revenue	Stock Management Approach
A	15%	75%	Tight control, frequent review, safety stock, priority reordering
B	25%	20%	Regular review, moderate safety stock, standard reorder process
C	60%	5%	Minimal stock, order on demand where possible, review quarterly

You can’t give every SKU the same attention — not with hundreds or thousands of items. ABC tells you where attention has the highest return. A stockout on an A item costs you significant revenue. Overstocking a C item is cash trapped in the warehouse earning nothing.

Days of Supply: When Will You Run Out?

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

How to calculate it: Current stock on hand / average daily sales.

450 units at 15 per day = 30 days of supply. If your supplier lead time is 21 days, you have a nine-day buffer. If lead time is 35 days, you’re already past the reorder point.

Set alerts based on days of supply, not stock quantity. A static reorder point of “reorder at 200 units” doesn’t account for demand changes. Days of supply automatically adjusts: when demand increases, the number drops even though quantity hasn’t changed, triggering alerts earlier.

Seasonal Patterns: Knowing What’s Coming

If your business has any seasonal component — and most wholesale and distribution businesses do — trailing averages will mislead you.

Track monthly sales by category overlaid across multiple years. This shows the seasonal shape of demand. Does your best-selling product spike in October every year? Plan stock accordingly: increase orders two months before the peak, draw down before seasonal troughs.

Seasonal analysis also reveals whether safety stock levels are appropriate year-round. Safety stock that’s right for February might be dangerously thin for September if demand triples.

GMROI: Profit Per Dollar Invested

Gross Margin Return on Investment measures how much gross profit you earn for every dollar invested in inventory. It combines profitability and turnover into one metric.

How to calculate it: Gross profit / average inventory cost.

Product	Margin	Turnover	GMROI	Verdict
Premium fittings	48%	1.8	0.86	Poor return despite high margin — stock sits too long
Standard fittings	22%	8.5	1.87	Good return — moves fast enough to compensate
Bulk cable	15%	11.0	1.65	Decent return — high velocity makes low margin work
Specialty parts	55%	0.9	0.50	Worst performer — high margin means nothing if it doesn’t sell

This table often surprises people. The “premium” high-margin products aren’t necessarily the best use of your inventory investment.

Start With These Three Reports

1. Stock turnover by category. Know which categories are moving and which are sitting. Run monthly.
2. Dead and ageing stock report. Everything with zero or declining sales over 6-12 months. Run monthly and act immediately.
3. Days of supply for A items. For your top-revenue products, know exactly how many days of stock you hold versus supplier lead time. Review weekly.

These three reports, run consistently, will surface problems that annual stocktakes and gut-feel ordering miss entirely. Your warehouse is one of your biggest investments. It deserves the same reporting scrutiny as your revenue and your cash flow.