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Inventory Turnover Calculator

Measure how efficiently your business sells through inventory. Higher turnover means better cash flow and less dead stock.

Total COGS for the period (usually annual)

(Beginning inventory + Ending inventory) / 2

Benchmarks

E-commerce (general)4–8x
Fashion / Apparel4–6x
Electronics6–12x
Grocery / Perishables12–20x

Track turnover in real-time

ReOrder AI monitors turnover rates per SKU and flags slow-moving items before they become dead stock.

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Frequently Asked Questions

What is a good inventory turnover ratio?

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For most e-commerce businesses, 4-8x per year is healthy. Electronics typically see 6-12x, fashion and apparel 4-6x, and grocery/perishables 12-20x. A higher ratio means you're efficiently selling through stock without over-investing in inventory.

How do you calculate inventory turnover?

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Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory Value. For average inventory, use (Beginning Inventory + Ending Inventory) / 2. Days Sales of Inventory (DSI) = 365 / Turnover Ratio, which tells you the average days to sell through stock.

What does low inventory turnover mean?

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Low turnover (below 3x per year) often signals overstocking, slow-moving products, or dead stock. This ties up cash and increases carrying costs. Consider running promotions, reducing order quantities, or using demand forecasting to better match stock levels to actual sales velocity.