Operations & Fulfillment
Inventory Turnover
How many times your inventory is sold and replaced over a period. Higher turnover = more efficient inventory management.
Formula
Inventory Turnover = COGS / Average Inventory ValueWhat is Inventory Turnover?
Inventory turnover measures how many times you sell through your entire inventory in a given period. A higher ratio means you're efficiently converting inventory into sales, while a low ratio suggests overstocking or slow-moving products.
Benchmarks
- Fashion: 4-6 turns per year
- Electronics: 6-8 turns per year
- Grocery: 12-15 turns per year
- General e-commerce: 4-8 turns per year
Example
Annual COGS: $200,000. Average inventory: $50,000. Turnover = 4 times per year.
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