Dynamic Storage Pricing & Weeks of Coverage

Effective inventory management is crucial for any e-commerce business. To help you manage your inventory better and avoid excessive dead stock, byrd offers Weeks of Coverage reporting and Dynamic Storage Pricing.

What is Weeks of Coverage (WoC)?

Weeks of Coverage (WoC) is the ratio of inventory quantity held across warehouses divided by total forecasted weekly volume based on the last three months of historical performance. In simple terms, WoC indicates how long your current inventory will last based on sales.

A healthy inventory level for an e-commerce company is typically between 12-24 weeks (excluding certain product groups like fashion). Keeping an eye on your lead time for restocking is essential to avoid stock-outs.

How are WoC and Dynamic Storage Pricing Calculated?

The calculation is based on three key factors:

1. Forecasted Weekly Volume: Based on the last three months of sales/shipment performance, with an additional 20% to cover potential growth.
2. Average Stock of the Last Month
3. Weighing Factor: The ratio of items shipped per SKU to the overall items sent. The more an SKU is shipped, the more it is weighted in the calculation.

A stock is considered unhealthy if it exceeds 24 weeks. If this threshold is exceeded, the storage cost increases by 100%. However, this adjustment is dynamic; once the stock level is below 24 weeks, the additional costs no longer apply.

Reducing Your Weeks of Coverage

To manage slow-selling SKUs and reduce your WoC, consider the following strategies:

• Create Bundles: Bundle fast and slow-selling SKUs to increase sales. Byrd offers features to facilitate this.
• Discounts: Offering discounts can be cheaper than paying excessive storage costs.
• Extend to New Marketplaces: Selling on additional marketplaces can help move slow-turning SKUs.

Weekly Weeks of Coverage Report

To help you track your WoC, byrd provides a weekly report every Tuesday.

The report, titled "<Your Company Name> Weeks of Coverage," will help you improve your inventory management. The report highlights the weighted weeks of coverage, making it easier to understand your inventory health.

For further support, feel free to reach out to us, and we can connect you with the right partners to assist you.