# How Does Sellercloud Track Inventory?

Sellercloud tracks inventory using two main values; **physical inventory** and **available inventory**.

1. **Physical Quantity** – “Physical Inventory” is **the total inventory you have** **sitting inside of your warehouses**. “Physical Inventory” includes “Available Inventory,” “Reserved Inventory,” **returned or damaged inventory**, and **in-transit inventory**.

2. **Available Quantity** – “Available Inventory” is the calculation of physical inventory less “Reserved Inventory” for orders, returned or damaged inventory, and in-transit inventory.

3. **Reserved Inventory** – “Reserved Inventory” is allocated for orders or **inventory you** **set aside as a reserve**.

4. **Quantity On Order** – “Quantity On Order” is a separate inventory calculation to **track inventory that has been purchased and is waiting to be received**.