Channel

Channel inventory

Also called: Inventory in the channel · Distributor stock

Product you have sold and recognised revenue on that is still sitting in a partner’s warehouse, unsold to an end customer.

Channel inventory is a liability disguised as a completed sale. It carries price-protection exposure if you cut prices, stock-rotation exposure if the partner has return rights, and demand-signal risk because sell-in overstates real consumption while it is building.

Managing it requires periodic inventory reporting from partners, matched to your product master — the same matching problem as sell-through, with the same failure mode.

Related terms

Price protection

A credit owed to a channel partner on their existing inventory when the manufacturer reduces the price of that product.

Stock rotation

A distributor’s contractual right to return a capped share of slow-moving inventory, usually quarterly and expressed as a percentage of purchases.

POS / sell-through

A channel partner’s report of what they actually sold to end customers, as distinct from what they bought from you.

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