Why You Shouldn’t Use “Cases” as the Base Unit of Your Inventory
Many businesses, especially those in wholesale, distribution, or manufacturing, default to tracking inventory in cases rather than individual units. That’s because many start off selling their products to large retailers who only order in cases.
But eventually, these companies decide to sell their products directly to customers from their own web sites where the profit margin is much higher. So, at first glance, setting up your system with the default unit of measure to be cases may seem efficient and appear to be the easiest setup. After all, cases are how items are received, stored, and shipped to large customers. But for smaller customers, products are shipped as individual units.
Using cases as your primary inventory unit introduces avoidable problems that can obscure sales trends, distort reporting, and lead to poor decision-making.
The absolute worst impact is that with some systems, changing the base measure from cases to units requires a complicated system overhaul. Many systems can’t change the base measure once an item is set up.
Here’s why your inventory system should use units, not cases, as the base tracking level.
1. You Can’t Identify Your Top Sellers Accurately
If you're tracking inventory in cases, your system likely doesn’t know how many units are in each case—or worse, assumes all cases are the same. As a result, your sales reports might show that "Item A" sold 100 cases and "Item B" sold 80 cases. But if Item A comes in cases of 6 and Item B comes in cases of 24, you've actually sold:
Item A: 600 units
Item B: 1,920 units
By using cases as the base unit, you've misidentified your true top performer. This skews demand forecasts, pricing decisions, and restocking priorities.
Even if you need some reports summarized as cases, the word “cases” should never be used. If the case contains 6 units, set the unit of measure (UoM) to be 6PK or 6PACK. If a case contains 4 units, set the UoM to be 4PK or 4PACK. No-one will ever have to ask, “How many units are in a case of item 5784?”
2. You Can't Optimize Inventory Replenishment
Reorder points, safety stock levels, and inventory turnover calculations all depend on unit-level accuracy. When your base unit is a case, you may unintentionally overstock or understock items, especially if different SKUs have different units per case. This leads to inefficient purchasing and potentially lost sales due to stockouts.
3. Reporting Becomes Inconsistent and Misleading
If some items are tracked in cases of 4, others in 12, and others in 100, your total inventory counts and valuations become hard to compare. You lose the ability to perform apples-to-apples analysis across product lines. Financial reports based on quantities or values per case will not reflect the actual cost or volume of goods on hand or sold.
4. Sales and Promotions Become Difficult to Manage
If your customers are purchasing by the unit (e.g., one bottle, one bag, one each), but your system only sees cases, it's harder to run accurate promotions, apply pricing rules, or analyze margins. You risk underpricing or overpricing items because you don’t have true unit-level data available.
5. Unit Conversion Errors Are Common and Costly
Every time you convert from cases to units or vice versa, you introduce a risk of error—especially when the number of units per case varies by SKU. These conversion errors can lead to miscounts during receiving, incorrect shipments, and mismatches between physical and system inventory.
Best Practice: Track Inventory in Units, Not Cases
While it's fine to receive and ship in cases, your base unit of measure in the inventory system should be the smallest sellable or usable unit. Use unit conversions in your system to relate cases, pallets, or inner packs to units—but always perform inventory counts, valuation, and reporting at the unit level.
Conclusion
Using cases as your base inventory unit may seem convenient, but it hides critical insights, creates operational risk and opportunities for human error. To improve forecasting, reporting, and decision-making, make sure your system tracks inventory in units. Clarity starts at the smallest level.
