Inventory Turnover Calculator

Turnover tells you how many times a year your inventory sells and gets replaced. It's the number that separates a product that's working from a pile of cash sitting on a shelf accruing fees.

The formula is plain: cost of goods sold divided by average inventory value. The companion figure, days of inventory, is 365 divided by the turnover. A turnover of 6 means your stock turns every 60 days. A turnover of 2 means it sits half the year.

For most FBA goods, under 4 turns a year is sluggish. The inventory is tying up money you could spend on a winner, and Amazon's monthly storage fees keep ticking the whole time it waits. Worse, slow movers drift toward long-term storage fees, and your IPI score drops, which can cap how much you're allowed to send in.

High turnover isn't automatically good either. If you're turning 20 times a year but stocking out every month, you're leaving sales on the table and training customers to buy from someone else. The sweet spot is fast enough to keep cash moving and slow enough that you're not constantly near empty.

Use annual COGS, not revenue — counting the sale price inflates the number and hides a slow product. Average inventory should be the mean across the year, not the peak right after a big shipment.

When turnover is low, the fix is usually smaller, more frequent reorders or a product that actually sells. Don't drown a dead SKU in reorder after reorder hoping it turns. The calculator just shows the truth; the decision is yours.