hopify Inventory Turnover Ratio: How to Calculate & Improve It

Inventory turnover ratio tells you how fast you're selling through stock. Higher is generally better.

The Formula

Inventory Turnover = Cost of Goods Sold / Average Inventory Value

Industry Benchmarks

Category	Good Turnover	Excellent Turnover
Fashion/Apparel	4-6x/year	8-12x/year
Electronics	5-8x/year	10-15x/year
Home & Garden	3-5x/year	6-8x/year
Food & Beverage	8-12x/year	15-20x/year

How to Improve Turnover

1. Reduce lead times — Order closer to when you need it
2. Eliminate dead stock — Liquidate slow movers
3. Improve demand forecasting — Order the right quantities
4. Increase marketing — Drive more sales velocity
5. Use POD for seasonal items — Don't hold inventory you can't sell

How PODesk Helps

PODesk tracks sales velocity and inventory levels, helping you optimize turnover. Try free.