This article will explain the difference between On Hand, Reserved and Available inventory, and how Sellbrite adjusts your inventory.
Sellbrite uses On Hand, Reserved and Available Quantity (QTY) levels to calculate how we update listings when products are sold on one or more sales channels. The formula we use to manage this is simple: On Hand QTY - Reserved QTY = Available inventory QTY.
On Hand Inventory is the total count that you have in your warehouse or storage location. This should be a representation of the stock that you have in your physical warehouse.
Reserved Inventory is the quantity that is allocated to a pending or in-process order from a sales channel.
Available Inventory is the balance that is available to sell.
When adding or adjusting inventory, you are updating the On Hand inventory levels. Since Reserved and Available inventory levels are automatically calculated by the system, they cannot be updated by you.
Tracking and Adjusting Inventory
Sellbrite automatically tracks and adjusts your inventory in several ways during the life of an order.
Let's look at an example of a typical order and the adjustments Sellbrite makes to your inventory.
- Initial Inventory: You start with an On Hand inventory of 19 for the "4 Light Eliana Vanity", and an Available inventory of 19 as well since all units are available for sale.
- New order for 2 units is received: Your Reserved inventory goes up by 2 to reflect quantity ordered. Available goes down to 17 since there are now fewer units that can be sold. On Hand stays the same since the inventory has not left your warehouse yet.
- Order is shipped: Once the order is shipped, your On Hand goes down to 17 since the inventory has left your warehouse, and your Reserved inventory goes back to 0. Your Available inventory is still 17 since the balance is the same.
If an order is canceled BEFORE it is shipped, the quantity ordered will be simply be removed from Reserved inventory and go back into the Available quantity.
If an order is canceled/returned AFTER it is shipped, you will need to make an inventory adjustment to return the quantity back into your On Hand inventory.
The same is not true for orders canceled on Etsy. Etsy does not tell us when an order is canceled, so if you have an order that you cancel on Etsy, and inventory is stuck in Reserved status, contact us and we'll clear it for you. :)