How a Shopify Brand Cut Inventory 41% in 12 Months using TrueGradient

For most e-commerce brands, inventory reduction sounds risky.
Less inventory often feels like fewer sales.

But with the right planning system, lower inventory can actually mean higher confidence, faster turns, and stronger cash flow.

Here’s a real, data-backed example of how a Shopify + marketplace brand used TrueGradient to reduce inventory by ~41% in 12 months—without increasing stockouts.

Starting Point: The Inventory Problem (Month 0)

At the beginning of the planning cycle, the brand was carrying:

• ~22,000 units of inventory
• Days of Inventory (DOI): ~240–250 days
• Frequent sawtooth spikes caused by bulk reorders
• Inventory unevenly spread across SKUs and channels
• Working capital tied up with limited visibility on what was actually excess

Despite high inventory:

• Some SKUs were still stock-out prone
• Others sat untouched for months

Classic e-commerce paradox: high inventory, low confidence.

Step 1: Diagnosing the Sawtooth (Months 1–2)

Using TrueGradient’s Sawtooth Inventory Analysis, planners could finally see:

• Beginning inventory vs in-transit vs reorder receipts
• DOI volatility instead of average DOI masking issues
• SKUs where reorders were arriving too early
• SKUs where demand had structurally slowed

🔍 Key insight:

Inventory wasn’t “too high” everywhere — it was mis-timed and mis-allocated.

Step 2: Reorder Discipline Instead of Blanket Cuts (Months 3–6)

Instead of aggressive liquidation or blanket reorder cuts, TrueGradient helped the team:

• Align reorder quantities with probabilistic demand (P50–P70) instead of max forecasts
• Reduce reorder frequency volatility
• Delay reorders where in-transit + beginning inventory already covered demand
• Separate stable SKUs from true risk SKUs

Impact by Month 6:

• Inventory reduced from 22K → ~16K units
• DOI dropped from ~240 days → ~190 days
• Stockout rate remained stable (no service-level shock)

💡 Working capital started freeing up without hurting sales.

Step 3: Channel-Aware Inventory Optimization (Months 6–9)

With Shopify + marketplaces unified in one plan:

• Inventory was rebalanced across channels instead of reordered
• Marketplace demand spikes were planned before they hit
• Excess SKUs were flagged early (not post-season)

This eliminated:

• Panic reorders
• End-of-season excess surprises
• Over-buffering “just in case”

Impact by Month 9:

• Inventory down to ~14–15K units
• DOI stabilized around 175–180 days
• Excess inventory shrank materially

Step 4: Scenario-Based Inventory Confidence (Months 9–12)

Instead of asking “Are we safe?”, planners started asking:

• “What if demand drops 10%?”
• “What if lead time slips by 2 weeks?”
• “Can we still hit service levels with lower inventory?”

TrueGradient’s Scenario Planning showed:

• Revenue risk vs inventory risk
• Cash unlocked per scenario
• Safety thresholds per SKU cluster

This gave leadership confidence to lock in lower inventory targets.

Why This Worked (And Usually Doesn’t)

Most brands try to reduce inventory by:

• Cutting reorders blindly
• Forcing liquidation
• Reacting too late

This brand succeeded because:

• Inventory decisions were forecast-aware
• Reorders were timing-optimized
• Channels were planned together
• Scenarios replaced gut feel

The Bigger Takeaway for E-commerce Brands

Inventory optimization is not about:

“How much inventory should we hold?”

It’s about:

“Where, when, and why should inventory exist?”

That’s the difference between spreadsheets and an AI-native planning platform like TrueGradient.

If you’re running Shopify + marketplaces and sitting on excess inventory while still fearing stockouts —
you don’t need less inventory.

You need better planning.