Sales velocity is how fast a product sells: units per day or per week. It is the number behind every reorder decision, and it is easy to get wrong. This guide covers the formula, the common mistake that understates it, and how to choose the right time window.
The formula
Take the units sold in a period and divide by the number of days in that period. Use net units, after returns and cancelled orders, so you measure real demand. If you sold 180 units in the last 30 days, your velocity is 6 units a day, or 42 a week.
- Units sold: Net units in the period
- Days: Number of days in the period
- Sales velocity: Units sold ÷ days
- Weekly velocity: Daily velocity × 7
Count in-stock days
If the product was out of stock for part of the period, dividing by every calendar day understates how fast it sells. Divide by the days it was available to buy instead.
- Calendar days: 180 units ÷ 30 days = 6 a day
- In-stock days: 180 units ÷ 24 days = 7.5 a day
- The difference: Six days of stockout hid a quarter of the demand
Use the in-stock figure for reordering. Otherwise each stockout lowers your velocity, which lowers your next order, which causes the next stockout.
Pick the right window
A short window reacts quickly but jumps around. A long window is steady but slow to notice change. Match the window to how the product sells.
- 7 days: Fast sellers and new launches, checked often
- 30 days: A sensible default for steady products
- 90 days: Slow sellers, where a month has too few sales to trust
- Same period last year: Seasonal products
Comparing two windows also shows the trend. If the 7-day velocity is well above the 30-day velocity, demand is rising, and the reverse means it is cooling.
Clean up the data
Some sales do not reflect normal demand. Decide how to treat them before you use the number.
- Promotions: A sale week inflates velocity, so note it or exclude it
- Bulk orders: One large wholesale order is not a new daily rate
- Variants: Calculate per variant, since sizes and colors sell at different speeds
- Bundles: Count the component units a bundle uses up
What velocity feeds
Velocity is rarely the end result. It is the input to the numbers you act on.
- Reorder point: Daily velocity × lead time, plus safety stock
- Order quantity: Daily velocity × the days you want the order to cover
- Stock cover: Units on hand ÷ daily velocity
See how to calculate a reorder point and how to calculate safety stock for the next steps.
Doing this at scale
StockSense forecasts per-SKU demand from your order history using velocity, trend, seasonality and lead-time-aware safety stock. It recommends a reorder point, quantity and date for each SKU, and ranks SKUs by revenue at risk. See StockSense.