Free FBA tool
Inventory Turnover Calculator
Your numbers
Inventory turnover
6.0x / year
You sell through your average stock about 6.0 times a year, which is roughly 60.8 days of stock on hand (DSI).
Days of inventory (DSI)
60.8 days
Avg days a unit sits before selling
GMROI
9.0x
$ gross margin per $1 of inventory
Gross margin
60.0%
Price minus landed cost
Avg inventory (at cost)
$15,000.00
Capital tied up in stock
60.8 days: A balanced turn for most FBA SKUs.
Inventory Hero
Turnover on every SKU, updated daily
This page works one SKU at a time from numbers you type in. Inventory Hero computes turnover, DSI, and GMROI across your whole catalog from your real sales and costs, and flags the slow movers that are quietly tying up cash before they age into a surcharge.
- Turnover, DSI, and GMROI for every SKU, no spreadsheets
- Slow-mover and aged-stock alerts before the 181-day surcharge
- Capital-tied-up view so you can rebalance orders
No credit card required.
How the metrics work
The three formulas
- Turnover = units sold / average units on hand
- DSI = 365 / turnover
- GMROI = annual gross margin / average inventory at cost
Turnover is a unit ratio, so your cost cancels out of it. Cost and price come back in for the dollar figures and for GMROI. This is gross margin, before Amazon fees; the profit calculator nets those out.
Worked example
A SKU sells 9,000 units a year and you hold about 1,500 units on hand on average. It costs you $10 landed and sells for $25.
- Turnover: 9,000 / 1,500 = 6.0 times a year
- DSI: 365 / 6 = about 60.8 days of stock on hand (healthy)
- Gross margin: ($25 - $10) / $25 = 60%, or $135,000 a year
- GMROI: $135,000 / $15,000 average inventory = 9.0, so each $1 of stock returns $9 of gross margin
Six turns a year on a 60% margin is a strong, healthy SKU. If DSI crept past 180 days, the same product would start drawing Amazon's aged-inventory surcharge, so the benchmark bar flags it well before then. To judge a single shipment instead of the whole year, use the sell-through rate calculator.
Key terms
- Inventory turnover
- How many times in a year you sell through your average stock. Higher means leaner, more cash-efficient inventory; too high risks stockouts.
- Days sales of inventory (DSI)
- The average number of days a unit sits in inventory before it sells. The same information as turnover, expressed in days: 365 divided by the turnover ratio.
- GMROI
- Gross margin return on inventory investment: the gross-margin dollars earned per dollar of inventory at cost. It ties turnover and margin into one number.
Frequently asked questions
What is a good inventory turnover rate for Amazon FBA?
There is no single right number, but most healthy FBA SKUs hold roughly 30 to 90 days of inventory, which is about 4 to 12 turns a year. Note that 4 turns is 91 days, right at the edge of the slow band on this page's benchmark, so treat the low end as a floor rather than a comfort zone. Turning faster frees up cash but raises stockout risk; turning slower ties up capital and, past 180 days on hand, exposes you to Amazon's aged-inventory surcharge. The right target depends on your lead time: if it takes 60 days to restock, you cannot safely run on 20 days of stock.
What is the difference between inventory turnover and DSI?
They are the same thing viewed two ways. Inventory turnover is a count: how many times a year you sell through your average stock. Days sales of inventory (DSI) is the same relationship expressed in days: how long an average unit sits before it sells. DSI equals 365 divided by your turnover ratio, so a turnover of 6 is a DSI of about 61 days. Turnover is handy for comparing SKUs; DSI is easier to reason about against your lead time.
What is GMROI and why does it matter?
GMROI (gross margin return on inventory investment) is the gross-margin dollars you earn for every dollar tied up in inventory. It equals your annual gross margin divided by your average inventory at cost. A GMROI of 9 means each dollar of stock generates nine dollars of gross margin a year. It is the metric that ties turnover and margin together: a fast-turning low-margin SKU and a slow-turning high-margin SKU can have the same GMROI. Because this number is gross, before Amazon's referral and FBA fees, a value just above 1 is not a profitability green light; those fees can turn a GMROI of 1 to 2 into a net loss. For most FBA categories a gross GMROI of 3 or more leaves real room after fees, but run the profit calculator to see what you actually net.
How do I calculate average inventory?
Average inventory is your typical sellable stock across the year, not today's snapshot. The simple version is (beginning inventory + ending inventory) divided by 2. A more accurate version averages your month-end on-hand counts across all twelve months, which smooths out restock spikes. Use units here; the calculator values them at your unit cost for the dollar figures.
How is turnover different from sell-through rate?
Turnover is an annual, steady-state efficiency ratio across your average stock. Sell-through is about one shipment over one window: of the units you just sent into FBA, what share has sold. Use turnover to judge how hard your inventory works over the year, and the sell-through rate calculator to judge whether a specific batch or launch is moving fast enough.
Inventory Hero
Stop guessing which SKUs are working
Inventory Hero tracks turnover, DSI, and GMROI across your catalog from your real sales and costs, surfaces the slow movers tying up cash, and warns you before stock ages into Amazon's surcharge, so your capital goes to the products that earn it.
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