Divide your average inventory value by your cost of goods sold for the period, then multiply by the number of days in the period. Or, more simply, divide 365 by your inventory turnover. A turnover of 5 gives a DSI of about 73 days, meaning the average unit sits about two and a half months before selling.
What is a good DSI for Amazon FBA?
Lower is generally better because it means cash converts faster and stock is less likely to age into surcharges, but too low means you are running lean and risking stockouts. Many FBA sellers land in the rough 30 to 90 day range depending on product and lead time. Read it per SKU rather than as a single target.
T. Brian Jones is co-founder and CTO of Inventory Hero. He leads the engineering behind its Amazon data pipeline, demand forecasting, and the AI platform that lets sellers talk to their live inventory, sales, and supplier data in plain language.
What is the difference between DSI and days of supply?
DSI is backward-looking: how long, on average, your stock took to sell over a past period. Days of supply is forward-looking: how many days your current stock will last at the current sales pace. Use DSI to judge past efficiency and days of supply to time your next reorder.
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Days sales in inventory (DSI) is the average number of days a unit sits in your inventory before it sells. The short version: it is the inverse of inventory turnover expressed in days, so lower means your cash converts back faster, and a high DSI is cash sitting in a warehouse aging toward storage surcharges. Below is the formula, a worked example, and how it differs from days of supply.
DSI = (average inventory value / COGS) x days in the period
or, more simply:
DSI = 365 / inventory turnover
Both give the same answer: the average number of days a unit sits before selling. If you already track turnover, run it in the inventory turnover calculator and divide 365 by the result.
Say your average inventory value is 60,000 dollars and your annual COGS is 300,000 dollars:
Input
Value
Average inventory value
$60,000
Annual COGS
$300,000
DSI
(60,000 / 300,000) x 365 = 73 days
That is a DSI of about 73 days, roughly two and a half months. It corresponds to an inventory turnover of 5 (300,000 / 60,000 = 5), the same fact seen from the other side. Use landed cost for both figures, not the factory price.
For the average inventory value, average your FBA inventory snapshots across the period rather than grabbing a single point in time, or take the start-of-period and end-of-period values and divide by two. A one-day snapshot will distort any SKU whose stock swings between reorders, which is most of them.
DSI is a cash-conversion number. The days a unit sits are days your cash is locked in inventory instead of funding the next order or your ads. A rising DSI is an early sign that stock is slowing and cash is getting stuck, often before the aged-inventory surcharge starts to bite.
Lower is generally better, but not without limit. A very low DSI means you are turning stock fast, which is efficient, but pushed too far it means running lean and risking stockouts and the low-inventory-level fee. Many FBA sellers land somewhere in a rough 30 to 90 day band, depending on margin and lead time.1
That band is wide, so anchor it to your own replenishment cycle: your DSI should not run much higher than your lead time plus your safety-stock days. If those sum to 75 days, a SKU sitting at a DSI above 90 is carrying more stock than the math requires, and the excess is cash you could redeploy. A SKU well below your lead time, on the other hand, is where the stockout risk lives.
DSI matters most as part of a bigger number: how long your cash is tied up from paying your supplier to collecting from your customer. That cash conversion cycle is roughly DSI plus the days your receivables are outstanding minus the days you take to pay suppliers. For an FBA seller the receivables leg is short, since Amazon disburses on a regular cycle, so DSI is usually the dominant term. That is why cutting DSI is often the single biggest lever on how much working capital your business needs. Put a number on it: on this article's 300,000 dollars of annual COGS, cutting DSI from 73 to 63 days frees about 300,000 / 365 x 10 = 8,200 dollars of working capital, and at a 15 percent cost of capital that is roughly 1,200 dollars a year in saved carrying cost, before you count the same improvement repeated across every SKU. Supplier terms are the other lever; the longer you can responsibly stretch payables, the more of that inventory the supplier is financing rather than you.
Track the trend per SKU. A climbing DSI flags a slowing product before it becomes dead stock.
Pair it with GMROI. A high DSI is only a problem if the margin does not justify holding the stock. See GMROI, which combines the speed DSI measures with profitability.
Attack the outliers. The SKUs with the highest DSI are where your cash is most stuck; clearing them frees the most capital.
Days sales in inventory is the average number of days your stock sits before selling, the inverse of turnover and a direct read on how long your cash is locked up. Track the trend per SKU, keep it low without tipping into stockouts, and read it alongside forward-looking days of supply and the unit-based sell-through rate. For the wider metric set, see the inventory KPIs that matter.
The 30 to 90 day band is an operator rule of thumb, not a measured statistic or an Amazon figure; healthy DSI varies widely by industry, margin, and lead time. Set your own target from your replenishment cycle rather than a fixed number. ↩