The marketing team looked at the inventory report this week and made a media decision.
Maybe they pulled spend off a SKU that looked thin.
Maybe they left spend flat on a SKU that looked fine.
Either way they used a number that only describes what's already checked in.
On-hand is the past.
Ad budgets get set against the next 45 to 90 days.
Those are two different inventory positions, and they point in opposite directions more often than you'd think.
The Loud Version: You pull back on units that are already coming.
Selling 350 a day. 3,300 on hand, or nine days of inventory coverage.
Looks like an emergency, so the team throttles it back.
Spend comes off. Budget moves to the next SKU. The creative that was working goes dormant.
Meanwhile 7,500 units are on the water and landing in ten days.
Total available is 10,800. Thirty-one days of cover.
Worst case you eat a day or two of stockout.
Instead you turned off demand that was working, and now you're spending three weeks rebuilding it while the units sit in the warehouse.
Finance approved that PO. Ops placed it. The money is already spent.
Marketing planned like it never happened.
The Quiet Version: You under-drive units you already bought.
Selling 100 a day. 3,000 on hand, or thirty days of inventory coverage.
Nobody's alarmed. Nothing on the dashboard says otherwise.
But 15,000 units are inbound.
18,000 total available against a 90-day window is 200 a day.
You're running at half the rate you committed to when you signed the PO.
Nobody raises their hand, because on-hand looks healthy.
Ninety days later it's 9,000 units and a markdown conversation.
The under-spend never showed up as a decision. Instead it showed up as a write-down.
The number that catches both.
Total available = on hand + inbound
Units needed per day = total available ÷ your window
Pace = your actual daily sell rate ÷ units needed per day
Above 1.2x, protect the inventory.
0.8x to 1.2x, hold the plan.
Below 0.8x, you have a spend problem that you haven’t caught yet.
Every PO you sign is a sales target.
Finance approved it. Ops placed it.
But nobody told marketing.
Run pace on your top ten SKUs before the next budget meeting and get ahead of the opportunities you’ve already created.
Product Runway Tool. Four inputs per SKU, ten SKUs, and it tells you which ones your spend is under-driving.
If you’re interested in discussing how this works within your business → Book a Call
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