Inventory Turnover Calculator

What is inventory turnover? Inventory turnover is the ratio that shows how many times you sell and replace your entire inventory in a year — calculated as annual COGS divided by average inventory value. A turnover rate of 4x means you sell through your stock four times annually, roughly every 91 days. Higher turnover means less cash tied up in unsold goods, lower storage costs, and fresher product on your shelves. Lower turnover means capital locked in inventory that is not generating revenue.

This calculator divides your annual COGS by your average inventory value to compute turnover rate, then converts it to days and weeks for easier interpretation. The benchmark comparison table shows average turnover rates across common ecommerce categories so you can see how your performance compares to industry norms.

For DTC brands, the ideal turnover rate depends on your category and business model. Fast-moving consumables like supplements and food should target 8 to 12 turns per year (selling through every 30 to 45 days). Apparel typically runs 4 to 6 turns. Durable goods and electronics may be 2 to 4 turns. Below-average turnover usually means you are over-ordering, carrying too many SKUs, or not promoting slow-moving products aggressively enough.

Improving inventory turnover directly improves cash flow. If you currently have $120K in average inventory turning 4x per year, improving to 6x means you can operate with $80K in inventory — freeing $40K in working capital for advertising, product development, or simply reducing your cash flow risk. Common tactics to improve turnover include reducing SKU count, implementing just-in-time ordering, running clearance promotions on slow movers, and using demand forecasting to better match inventory to sales velocity.