Days of cover and stockout alerts: an inventory playbook for multichannel D2C brands
How to calculate days of cover correctly, set safety-stock thresholds and build automated stockout alerts across marketplaces, quick commerce and your own warehouses.
For a brand selling across marketplaces, quick commerce and its own website, inventory is spread across dozens of locations: your warehouses, marketplace fulfilment centres, quick-commerce warehouses and dark stores. Total stock can look healthy while a key SKU is already out of stock in your biggest city.
The metric that catches this early is days of cover, and the tool that makes it useful is an automated stockout alert.
What is days of cover?
If a SKU has 600 units at a warehouse and sells 40 units a day there, it has 15 days of cover.
Days of cover (also called days of inventory or days on hand) tells you how long current stock will last at the current rate of sale. It's more useful than raw stock, because 600 units is plenty for a slow seller and dangerously low for a bestseller.
Calculating it correctly
The formula is simple, but a few details make a big difference:
- Calculate per location, not just in total. Stock in Mumbai doesn't help customers in Bengaluru, especially in quick commerce.
- Choose the right sales window. A 7-day average reacts fast to trends; a 28-day average is more stable. Many brands use a 14-day window, or a weighted blend.
- Exclude stockout days. If a SKU was out of stock for 4 of the last 14 days, dividing by 14 understates true demand. Divide by days it was actually in stock.
- Account for seasonality and events. Sale events and festive periods can multiply demand. Adjust run-rate ahead of known peaks.
- Include in-transit and open POs where relevant, so you don't over-order stock that's already on its way.
Setting thresholds
A days-of-cover number only becomes actionable when compared to a threshold. The threshold should reflect how long it takes to replenish that location:
If it takes 7 days to get stock to a marketplace warehouse and you want a 5-day buffer, alert when cover drops below 12 days.
Thresholds usually vary by SKU class. Hero SKUs that drive most revenue deserve a larger buffer than long-tail products.
Designing stockout alerts people actually use
Alerts fail when they're too noisy or reach the wrong person. Good alerts are:
- Prioritised. Sort by revenue at risk, not alphabetically. A hero SKU running out in a top city comes first.
- Specific. "SKU X at warehouse Y has 4 days of cover; it sells 60/day; an open PO needs 900 units by Friday."
- Routed. Supply-chain alerts to the planning team; ad-related alerts to marketing (so they stop spending on SKUs about to go out of stock).
- Timely. Delivered early in the day, with enough lead time to act.
- Delivered where people work: email, Slack, Teams or WhatsApp.
The data you need
- Daily inventory snapshots from every location: your warehouses, marketplace FCs, quick-commerce warehouses
- Daily sales by SKU and location from every channel
- Open POs and in-transit stock
- Lead times by route or location
- A SKU and location master to join it all together
Most of this data is available from seller and partner portals, but rarely in one place. An automated pipeline that collects it daily and stores snapshots over time is what makes reliable days-of-cover tracking possible.
Key takeaways
- Days of cover = stock ÷ daily sales, calculated per SKU and per location.
- Exclude stockout days from the run-rate and adjust for known peaks.
- Set thresholds from lead time plus a safety buffer, larger for hero SKUs.
- Prioritise alerts by revenue at risk and send them to the people who can act.