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Your best SKU sells out on a Tuesday in late October.
The next PO lands in three weeks. Everyone agrees it's bad timing. Nobody can find it on the P&L.
Inventory shows up on the balance sheet. A stockout shows up nowhere, so it gets planned as if it costs nothing.
Three weeks out on your best SKU
Say the SKU sells 400 units a week at $52. Landed cost is $19, and shipping, pick and pack, and processing add $7. Each unit throws off $26 of contribution.
Three weeks out is 1,200 units you didn't sell, and $31,200 of contribution no report will ever show.
What the buffer would have cost
Three weeks of buffer on that SKU is the same 1,200 units, or $22,800 of cash at landed cost.
You don't lose that cash. The units sell later. What you pay is the cost of carrying them, about 25% a year for capital, storage, and shrink. $5,700.
$5,700 a year to protect $31,200 in three weeks. More than five to one.
Most brands spread buffer evenly
Most brands never decide where safety stock goes. They set a rule, like four weeks on everything, and apply it across the catalog.
Take a $12M brand with 12 core SKUs selling about 250 a week each and 150 tail SKUs selling about 15.
Four weeks of buffer on the tail is 9,000 units, or $171,000. Three weeks on the core is also 9,000 units and also $171,000.
The core buffer protects $26 of contribution per unit, $234,000 in total. The tail buffer protects about $11 per unit, $99,000.
Same cash, less than half the protection. And the core is often the one running lean, because everyone assumes it will keep selling. It does, which is why it runs out.
Write down the never-out list
Pick the SKUs where a stockout would cost several times what the buffer does. Most brands have 10 to 20, and the team can usually name them in a minute.
Give them their own reorder points and their own buffer, sized to lead time and current velocity. Review the list weekly.
Let the tail run lean. When a tail SKU runs out and nobody asks for it, you've learned something.
You get to choose what you insure. Most brands insure the products that need it least.
If you've been running out of the products you can least afford to, set up some time and we'll walk through it.
DIT AgTech Doesn’t Need to Sell Hardware to Make Money.
One installation can generate years of recurring supplement revenue.
DIT AgTech provides the hardware free to ranchers through a three-year nutrition plan. The hardware gets installed once. The supplements keep generating revenue year after year.
Then there’s the second paycheck.
Methane reduction is becoming an economic opportunity for agriculture.
Methane-reducing nutrition create carbon credits, giving ranchers another income stream while creating an additional revenue opportunity for DIT AgTech.
That means one connected livestock operation generates recurring supplement revenue, with carbon revenue as additional upside.
We win when ranchers win.
The model is already working in Australia, one of the world's toughest livestock environments, with 500+ units deployed and 370,000 head on the platform.
Now DIT AgTech brings that proven model to the massive U.S. livestock market.
For investors, the opportunity is getting in before the model scales into its next market.
𝘐𝘯 𝘮𝘢𝘬𝘪𝘯𝘨 𝘢𝘯 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘥𝘦𝘤𝘪𝘴𝘪𝘰𝘯, 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳𝘴 𝘮𝘶𝘴𝘵 𝘳𝘦𝘭𝘺 𝘰𝘯 𝘵𝘩𝘦𝘪𝘳 𝘰𝘸𝘯 𝘦𝘹𝘢𝘮𝘪𝘯𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘵𝘩𝘦 𝘪𝘴𝘴𝘶𝘦𝘳 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘵𝘦𝘳𝘮𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘰𝘧𝘧𝘦𝘳𝘪𝘯𝘨, 𝘪𝘯𝘤𝘭𝘶𝘥𝘪𝘯𝘨 𝘵𝘩𝘦 𝘮𝘦𝘳𝘪𝘵𝘴 𝘢𝘯𝘥 𝘳𝘪𝘴𝘬𝘴 𝘪𝘯𝘷𝘰𝘭𝘷𝘦𝘥. 𝘋𝘐𝘛 𝘈𝘨𝘛𝘦𝘤𝘩 𝘩𝘢𝘴 𝘧𝘪𝘭𝘦𝘥 𝘢 𝘍𝘰𝘳𝘮 𝘊 𝘸𝘪𝘵𝘩 𝘵𝘩𝘦 𝘚𝘦𝘤𝘶𝘳𝘪𝘵𝘪𝘦𝘴 𝘢𝘯𝘥 𝘌𝘹𝘤𝘩𝘢𝘯𝘨𝘦 𝘊𝘰𝘮𝘮𝘪𝘴𝘴𝘪𝘰𝘯 𝘪𝘯 𝘤𝘰𝘯𝘯𝘦𝘤𝘵𝘪𝘰𝘯 𝘸𝘪𝘵𝘩 𝘪𝘵𝘴 𝘰𝘧𝘧𝘦𝘳𝘪𝘯𝘨, 𝘢 𝘤𝘰𝘱𝘺 𝘰𝘧 𝘸𝘩𝘪𝘤𝘩 𝘮𝘢𝘺 𝘣𝘦 𝘰𝘣𝘵𝘢𝘪𝘯𝘦𝘥 𝘩𝘦𝘳𝘦: https://bit.ly/4bzuWCi