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Sales Velocity Explained

Understand how Stock Sentry calculates sales velocity and predicts stockouts

Features
8 min read

Understanding Velocity Calculations

Stock Sentry uses sales velocity to predict stockouts. This guide explains the calculation and configuration.

Sales History14-day lookbackCalculateUnits SoldDays= Daily VelocityPrediction5Days until stockoutExample:140 units sold in 14 days = 10 units/day velocityWith 50 units in stock: 50 / 10 = 5 days until stockout
How velocity is calculated from sales history

What is Sales Velocity?

Sales velocity is the average units sold per day for a product variant. It forms the foundation of Stock Sentry's predictions.

Formula: Daily Velocity = Total Units Sold / Number of Days

Example: 140 units in 14 days = 10 units/day. With 50 units in stock, stockout predicted in 5 days.

Example sales velocity over 14 days

Lookback Period

The lookback period determines how many days of sales history to analyze:

Lookback Period ComparisonToday-90 days7d14d30d90d7 DaysMost ResponsiveBest for trendingproducts14 DaysBalancedDefault settingfor most products30 DaysStableSmooths weeklyvariations90 DaysHistoricalSeasonal planning& new productsShorter periods detect changes faster; longer periods provide stability
Comparing different lookback periods
PeriodBest ForTrade-off
7 daysTrending productsMore responsive, less stable
14 daysMost products (default)Balanced approach
30 daysSeasonal productsVery stable, slower to react
90 daysHistorical planningBest for seasonal cycles

To change: Settings > Velocity Calculation Settings > Select period > Save

How lookback periods affect velocity calculation

Seasonal Adjustments

When enabled, Stock Sentry applies monthly multipliers to velocity:

Adjusted Velocity = Base Velocity x Seasonal Multiplier

Example: 10 units/day x 2.5 December multiplier = 25 units/day adjusted velocity.

See Seasonal Patterns for details.

Prediction Accuracy

Improves with: Consistent sales, longer history, regular restocking

Decreases with: Promotions, seasonal variance, new products, irregular sales

Confidence Levels

  • High (80%+): 30+ sales, low variation, regular pattern
  • Medium (50-80%): 10-30 sales, some variability
  • Low (<50%): <10 sales, irregular pattern

Edge Cases

  • Zero velocity: No recent sales - product marked accordingly
  • Insufficient data: <3 sales - flagged as unreliable
  • Negative inventory: Triggers Critical alert immediately

Best Practices

  1. Match lookback to your sales cycle
  2. Act quickly on high-confidence alerts
  3. Increase thresholds before promotions
  4. Review velocity trends in dashboard

Related: Alert Thresholds | Getting Started | FAQ

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