Still wondering why your bestsellers keep running out of stock while unsold inventory continues to build up? This isn’t just a forecasting issue, it’s often the result of missing visibility into key inventory KPIs. For ecommerce brands, especially those managing multiple sales channels, not tracking the right metrics can quietly drain revenue. You lose sales you didn’t even know you missed, tie up capital in products that aren’t moving, and often realize it too late to act. Understanding and monitoring the right KPIs is no longer optional, it’s essential to staying profitable and scalable.
In this blog, you’ll discover the 15 most important inventory KPIs to improve efficiency that high-performing ecommerce brands track daily.
Essential KPIs for Managing Inventory: What to Track and Why It Matters
To help you better understand and apply inventory KPIs, we’ve divided them into three key categories: Sales, Receiving, and Operations. This structure mirrors the typical flow of inventory across your ecommerce supply chain.
Inventory KPIs: Sales
These KPIs show how well your inventory turns into revenue. Let’s say a D2C fashion brand saw a dip in sales for a popular item and, by tracking sell-through rate and stockout frequency, realized it was often out of stock during peak season. After adjusting reorder points, sales jumped 22% in just one quarter. So, what are the key KPIs in inventory management that can drive results like this? Take a look at the list below.
1. Sell-through Rate
Sell-through rate tells you how fast you’re selling the products you’ve ordered. For example, if you brought in 100 units of a new SKU and sold 80 in a month, your sell-through rate is 80%. It helps you spot what’s working, what’s not, and whether to reorder or clear out stock.
The sell-through rate varies by industry, but it is generally around 80% overall.
How to calculate- (Number of Units Sold / Number of Units Received) × 100
Why does it matter?
- Reduces Deadstock Risk
- Improves Cash Flow
- Optimizes Reordering
- Tracks Product Performance
2. Stock to Sales Ratio
The stock-to-sales ratio, a key supply chain KPI, compares how much inventory you have on hand to how much you’re actually selling in a given period. A lower ratio means you’re moving products efficiently, while a high ratio may indicate overstocking. For example, if an ecommerce brand holds ₹5,00,000 worth of inventory but only sells ₹1,00,000 in a month, the ratio is 5:1,signaling excess stock and tied-up capital. Tracking this metric helps brands align inventory with actual demand and improve cash flow.
What does it matter?
- Effective Inventory Planning
- Identify Supply chain delays
- Observe shifting consumer trends
- Identify sudden sales spikes from successful marketing campaigns
How to calculate – (Ending Inventory Value at Retail Price/ Total Sales for the Period)
Backorder Rate
Backorder rate measures the percentage of customer orders you can’t fulfill right away because the items are out of stock. For example, if you receive 1,000 orders in a month and 100 of them can’t be shipped immediately due to stock unavailability, your backorder rate is 10%. A high backorder rate signals gaps in inventory planning or demand forecasting and can lead to delayed deliveries and poor customer experience.
Why does it matter?
- Reveals Gaps in Inventory Planning
- Protects Customer Experience
- Drives Stock Availability Improvements
How to calculate- ( delayed orders due to backorders / total orders placed) x 100
4. Inventory Turnover Rate
Inventory Turnover Rate tells you how many times your stock gets sold and replaced over a specific period, usually a year. Think of it as a pulse check on how efficiently your products are moving.
Let’s say you stocked ₹75,000 worth of inventory on average this year, and your total cost of goods sold was ₹300,000. That gives you an ITR of 4, which means you fully sold and restocked your inventory four times.
Why does it matter?
- Maintain cashflow
- Better visibility in future demands ( enhanced customer satisfaction)
- Cater to seasonal demands
- Decrease deadstock and backorders
How to calculate- (Number of Items on Backorder / Total Number of Items Ordered) × 100
5. Weeks on Hand
Weeks on Hand shows how many weeks your current inventory can support sales based on how quickly products are selling. It gives you a clear picture of how long your stock will last before you need to reorder. This metric is helpful for managing inventory levels, avoiding overstocking, cutting down on storage costs, and making sure you have enough products available to meet customer demand.
Weeks On-Hand = Current Inventory Level / Average Weekly Sales
Inventory KPIs: Receiving
Receiving KPIs, often referred to as warehouse KPIs, focus on how efficiently you bring inventory into your facility and get it ready for storage or fulfillment. Receiving KPIs are specifically about what happens the moment goods arrive, from unloading and inspection to putaway. For a warehouse manager, tracking these KPIs is essential because any delays or errors at the receiving stage ripple through the entire supply chain.
Why does it matter?
- Improves Inventory Accuracy
- Minimizes Stock Discrepancies
- Improves Space Utilization
- Enhances Supplier Performance Monitoring
1. Days Sales in Inventory (DSI)
Days Sales in Inventory (DSI), also known as “average age of inventory,” “days inventory outstanding” (DIO), or “inventory days”, tells you how long your current stock will last before it’s sold, based on your existing sales pace.
For example, if your ecommerce brand has ₹500,000 worth of inventory and you’re selling ₹50,000 worth of goods per day, your DSI is 10. That means your inventory will last about 10 days at the current sales rate.
A lower DSI means you’re moving products quickly and managing stock efficiently. A higher DSI could signal slow-moving items or overstocking, both of which tie up cash and space. This metric gives you a clear view of how healthy and liquid your inventory really is.
How to calculate it – (Average Inventory/Cost of Goods Sold (COGS)) × 365
How does it matter?
- Highlights Overstocking Issues
- Supports Cash Flow Management
- Improves Forecasting and Planning
2. Time to Receive
Time to receive measures how quickly your team processes incoming inventory, from the moment it arrives at the dock to when it’s ready for storage or sale. This KPI reflects the efficiency of your receiving operations and how smoothly new stock flows into your system. A shorter time to receive means faster stock availability and fewer delays in fulfillment.
3. Putaway Time
Putaway Time measures how long it takes to transfer incoming goods from the receiving area to their assigned storage spots within a warehouse or distribution center. This metric is essential for assessing how efficiently warehouse operations are running. Longer putaway times can lead to delays in inventory availability, disorganized storage, and slower order fulfillment, while faster putaway keeps inventory flowing smoothly and shelves ready for picking.
Inventory KPIs: Operations
Struggling to scale without increasing headcount or warehouse space? Tracking operational KPIs can unlock 2x–3x growth in order volume capacity by helping you streamline processes, reduce errors, and move faster with the same resources.
1. On-time orders
On-Time Orders represent the percentage of customer orders that are fulfilled and shipped within the promised delivery window. This metric is key to evaluating how efficiently a company processes and delivers orders. A high on-time rate reflects strong supply chain and inventory management, directly contributing to customer satisfaction and long-term loyalty.
How to calculate it – (Number of Orders Shipped On Time / Total Number of Orders) × 100
2. Average Inventory
Average inventory represents the typical stock level a business maintains over a set period, such as a month or year. It helps smooth out fluctuations from restocking or sales spikes, giving a clearer picture of how much inventory is usually available. This figure is useful for planning, forecasting, and tracking key metrics like turnover rate.
How to calculate it – Average inventory = (beginning inventory + ending inventory) / 2
3. Fill Rate
Fill rate, also known as order fulfillment rate, shows how many customer orders you’re able to fulfill completely using the stock you have on hand. It reflects how reliably you can meet demand without delays, backorders, or missed sales. A high fill rate means your inventory planning and stock availability are well-aligned with customer needs, while a low rate signals gaps that could hurt customer satisfaction and sales.
How to calculate it – Fill rate = [( total items – shipped items) / total items] x 100
Why does it matter?
- Reduces Stockouts and Overstocks
- Optimizes Inventory Investment
- Aligns Procurement with Demand Trends
4. Inventory Shrinkage
Inventory shrinkage is when the actual stock in your warehouse is less than what your system says you should have. This usually happens due to theft, damage, counting mistakes, or fraud. Even though these items are listed as available for sale, they’re missing or unsellable and ultimately leading to lost revenue and inventory inaccuracy.
Why does it matter?
- Identifies Hidden Losses
- Improves Inventory Accuracy
- Enhances Operational Control
((Recorded Inventory − Actual Inventory)) / Recorded Inventory) × 100
5. Rate of Returns
The rate of Returns shows how many products customers send back after purchase, measured as a percentage of total sales over a specific period. It’s a key indicator that helps you spot issues with product quality, wrong shipments, or unmet customer expectations. A high return rate often points to problems in fulfillment or product listings that need attention.
Why does it matter?
- Identifying frequently returned SKUs
- Reveals Product or Fulfillment Issues
- Controls Operational Costs
(Number of Returned Items / Total Number of Items Sold) × 100
6. Inventory Carrying Cost
Inventory carrying cost refers to all the expenses a business pays to keep unsold inventory in storage. This includes things like warehouse rent, insurance, product damage, aging stock, and even the money you could’ve used elsewhere. Knowing your carrying costs helps you make better decisions about how much to stock, when to reorder, and how to price your products to stay profitable.
Why does it matter?
- Encourages more efficient inventory planning
- Enhances Cash Flow Management
- Reveals Hidden Inventory Costs
(Storage Costs + Insurance Costs + Cost of Obsolescence + Opportunity Costs) / Total Inventory Value × 100
7. Perfect Order Rate
Perfect Order Rate tracks how many customer orders go through your entire fulfillment process without a single issue, from the time the order is placed to when it’s delivered. That means the right items arrive on time, in good condition, with all the correct paperwork. It’s a key measure of how smoothly your supply chain and logistics are running, and high scores usually mean better customer satisfaction and fewer costly mistakes.
Why does it matter?
- Reflects Overall Fulfillment Accuracy
- Identifies Operational Gaps
- Boost brand reputation
(Number of Perfect Orders / Total Number of Orders) × 100
Now that you know what the key KPIs in inventory management are, the next challenge is tracking them efficiently, without getting lost in spreadsheets or disconnected tools. That’s where Unicommerce steps in. Here’s how it helps you turn metrics into real-time, revenue-driving decisions.
How Unicommerce’s Inventory Management System Can Improve Your KPIs
Unicommerce is India’s leading e-commerce enablement SaaS platform, offering end-to-end solutions,from marketing automation with Convertway, to seamless order fulfillment through Uniware, and the best shipping solutions to drive operational efficiency and growth.
Unicommerce’s inventory management system helps eliminate inefficiencies and gives ecommerce brands better control to manage stock effectively, while maintaining key inventory KPIs with greater accuracy.
Real-time inventory sync: Maintain optimal inventory level
With our real-time inventory sync capabilities, the inventory level automatically gets updated across all channels, so you don’t have to manually update the levels, helping you keep 100% inventory accuracy.
Custom Alerts for low stock
Whenever your inventory level falls below a defined threshold, you’ll get custom alerts so you can reorder them before getting out of stock.
Vendor management
Enable clients to onboard and manage vendors with ease, ensuring smooth and efficient product procurement.
Scan-based picking: Accurate record keeping
Scan-based picking enables accurate stock keeping, which is system verified, so there is no possibility of placing items on the wrong shelves. All this helps you maintain several KPIs like putaway rate, inventory accuracy, and keeping the inventory shrinkage rate low.
Efficient Return Management
Manage return products (CIRs and RTOs) efficiently with faster restocking and timely replacements,helping you improve inventory accuracy, maintain prompt order resolutions, and enhance the post-purchase customer experience.
Automated SKU Mapping Across Channels
Easily synchronize SKU listings across marketplaces and your D2C store to eliminate duplication and avoid stock mismatches. It enhances order accuracy and ensures consistent inventory across all sales channels.
Inventory Aging Reports
Track how long inventory has been sitting unsold to identify slow-moving SKUs and optimize stock rotation. That’s how you can improve your inventory turnover ratio and reduce carrying costs.
Centralized Inventory Visibility
Whether you’re selling on Myntra, Amazon, Flipkart, or your own website, Unicommerce lets you view and manage inventory from a single panel,no need to split stock. This unified view helps avoid discrepancies like overstocking and understocking.
Cycle count
Cycle counting helps maintain inventory accuracy by regularly verifying stock levels without disrupting operations. This supports better forecasting, reduces shrinkage, and ensures higher fulfillment accuracy for key KPIs like fill rate and perfect order rate.
ERP integration
Enable seamless information flow across systems with a streamlined inventory management workflow, helping improve KPIs like inventory accuracy, order cycle time, and stock visibility across channels.
Make Every Decision Count with Unicommerce’s Insightful Reports
Unicommerce makes it easier for ecommerce brands to measure and act on key inventory and operational metrics, without getting lost in scattered reports. With its intuitive analytics dashboard, you get real-time visibility into the health of your business, focused on three critical areas- product alert, order alert, and channel alerts. With our simplified dashboard, you can track –
Sales Order Report
Our advanced sales reports help you track your actual earnings by offering clear visibility into all payment details, making it easy to calculate your net income accurately and efficiently.
Inventory Report
Simplify stock management with a multichannel inventory report that gives you accurate, real-time visibility of inventory levels across all your facilities.
Tally GST Report
Generate GST-compliant reports seamlessly using integrations like Tally and Busy, allowing you to track which items have been dispatched from the warehouse for final delivery.
Tally Return GST
Track returned goods accurately using integrations like Tally and Busy, helping you identify the reasons behind returns and reduce the associated costs.
Sales and Returns
Gain insights into return trends by comparing orders sold versus orders returned, helping you pinpoint performance issues from packaging to product quality, and improve overall operations.
Fast & Slow Moving SKU
Identify available inventory for fast-moving SKUs that generate the highest sales, based on performance over the last 30 days.
Inventory Projection
Protect your business from unexpected disruptions by using data to anticipate upcoming demand and ensure you maintain the right inventory levels for the future.
Inventory Ledger
Check stock availability for any specific date using the inventory ledger feature, available across all versions of our software.
Procurement/GRN
Review every step of your procurement process, what to reorder, which supplier to choose, and whether the Purchase Orders and GRNs align to confirm that all items have been received as expected.
Final Thoughts: Turn Inventory KPIs into Actionable Growth
Tracking key inventory KPIs is essential for the smooth functioning of your e-commerce operations, but doing it the right way makes all the difference. When monitored effectively, these metrics help you align warehouse activities, improve inventory planning, and drive smarter decision-making.
With a platform like Unicommerce, you don’t just measure KPIs, you gain a simplified, end-to-end view of your inventory operations. From accurate tracking to actionable insights, it empowers you to optimize processes, reduce errors, and scale seamlessly. In a competitive e-commerce landscape, that kind of visibility isn’t just helpful, it’s a growth enabler.
FAQs
1. What are the best inventory KPIs for e-commerce?
The best inventory KPIs for e-commerce include Inventory Turnover Ratio, Sell-Through Rate, Stockout Rate, Backorder Rate, and Days of Inventory on Hand. These metrics help monitor stock efficiency, prevent overstocking or understocking, and ensure timely product availability across the channel.
2. How does the sell-through rate help reduce deadstock in ecommerce?
The sell-through rate helps reduce deadstock in ecommerce by measuring how quickly products are sold after being stocked. A higher sell-through rate indicates better product-market fit and timely stock clearance, preventing excess unsold inventory.
3. Why is the stock-to-sales ratio important for inventory planning?
The stock-to-sales ratio is important for inventory planning because it compares the inventory on hand with actual sales. A high ratio signals overstocking and tied-up capital, while a balanced ratio ensures healthy turnover and optimized cash flow.
4. What does the backorder rate reveal about inventory health?
Backorder rate reveals inventory health by indicating how often customer orders can’t be fulfilled immediately due to stock unavailability. A high backorder rate points to forecasting issues or delayed replenishment, negatively affecting customer experience.
5. How can ecommerce brands calculate inventory turnover rate?
Ecommerce brands can calculate inventory turnover rate using the formula:
Inventory Turnover = Cost of Goods Sold / Average Inventory
This helps them understand how efficiently inventory is sold and replaced over a period, which is critical for cash flow and demand planning.
6. What is the impact of low fill rate on ecommerce sales?
A low fill rate impacts ecommerce sales by increasing stockouts and missed revenue opportunities. It shows that customer orders can’t be fulfilled completely from available stock, often leading to lost trust and increased returns.
7. Why should ecommerce businesses track inventory shrinkage?
Ecommerce businesses should track inventory shrinkage to identify and reduce hidden losses due to theft, damage, or miscounts. Monitoring shrinkage improves inventory accuracy, reduces revenue leakage, and strengthens warehouse control.
8. How does Unicommerce help track ecommerce inventory KPIs in real time?
Unicommerce helps track ecommerce inventory KPIs in real time by offering centralized inventory visibility, automated SKU mapping, scan-based picking, and dynamic inventory reports. These tools ensure brands monitor and optimize KPIs like inventory accuracy, putaway rate, and shrinkage efficiently.
9. What is the benefit of inventory aging reports in ecommerce?
Inventory aging reports help ecommerce businesses identify slow-moving SKUs and reduce carrying costs. By tracking how long stock remains unsold, brands can make informed decisions on clearance strategies, reordering, and demand forecasting.
10. How does cycle counting improve inventory accuracy and fulfillment rates?
Cycle counting improves inventory accuracy and fulfillment rates by verifying stock regularly without disrupting operations. It minimizes discrepancies, supports accurate forecasting, and helps maintain KPIs like fill rate and perfect order rate.