Inventory glossary

What is Sellable inventory?

Sellable inventory is the stock you can actually sell right now, after removing damaged, quarantined, reserved, or otherwise unavailable units from your total on hand count.

Your total inventory count can lie to you. If a shelf shows 50 units but 10 are damaged and 5 are set aside for a wholesale order, only 35 are actually sellable. Reordering based on the full 50 means you run out sooner than planned and can end up with a stockout you did not see coming.

Check sellable inventory, not just raw stock counts, before you decide what to reorder. When you calculate how many days of stock you have left, use the sellable number. This keeps your reorder timing honest and stops you from under-buying because of stock that was never going to leave the warehouse anyway.

Formula

Sellable inventory = On hand inventory - Damaged inventory - Quarantined inventory - Reserved inventory - Committed inventory

Example

A candle store has 200 jars of a scent on hand. 15 are damaged from a shipping accident and 10 are committed to a pending wholesale order. Sellable inventory is 200 - 15 - 10 = 175 units. That is the number the store should use to judge how soon it needs to reorder.

Common mistakes

  • Using total on hand inventory as if it were all sellable, which overstates how much stock you really have.
  • Forgetting to subtract committed or reserved units set aside for specific orders.
  • Not updating sellable counts after damage is discovered, so the system still shows stock that cannot be sold.

Sellable inventory and SteadyShelf

SteadyShelf bases its forecasts and order-by dates on the stock you have available to sell, so excluding damaged or committed units from your counts keeps those reorder suggestions accurate.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

On hand inventory · Committed inventory · Reserved inventory · Damaged inventory · Available to promise

Full inventory glossary

FAQ

Is sellable inventory the same as on hand inventory?

No. On hand inventory is everything physically in stock. Sellable inventory is on hand inventory minus damaged, quarantined, reserved, or committed units that cannot be sold to a new customer.

Why does sellable inventory matter for reordering?

If you reorder based on total stock instead of sellable stock, you overestimate how much you actually have available and can place orders too late, leading to a stockout.

Let SteadyShelf do this math for every SKU

Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.

Get early access