How to Use Data to Make Better Buying Decisions in E-commerce

The quality of your buying decisions — what to order, how much, and when — directly determines your inventory efficiency and cash flow. Integrating data into the process improves accuracy significantly.

Sell-Through Rate as a Buying Signal

Sell-through rate — the percentage of inventory sold within a period — is the most direct indicator of demand relative to your buying. A 90% sell-through rate in 60 days means you're chronically undersupplied. A 30% rate means too much inventory relative to demand.

Days on Hand as a Risk Indicator

Days on Hand (DOH) — how many days of current sales velocity your inventory covers — gives a forward-looking view of inventory risk. A SKU with 7 days on hand is an imminent stockout risk. One with 180 days has a capital efficiency problem.

Margin by SKU Guides Assortment Decisions

Revenue without margin context is incomplete. Sort your assortment by gross margin dollars and gross margin percentage — these two lenses guide which products deserve investment and which deserve rationalization.

The fix: Calculate sell-through rate and days on hand for your top 20 SKUs this week. Identify your highest risk positions — both stockout and overstock risk. Address those in your next buying cycle.