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Inventory Turnover metrics and KPIs

What are Inventory Turnover metrics?

Finding the right Inventory Turnover metrics can be daunting, especially when you're busy working on your day-to-day tasks. This is why we've curated a list of examples for your inspiration.

Copy these examples into your preferred app, or you can also use Tability to keep yourself accountable.

Find Inventory Turnover metrics with AI

While we have some examples available, it's likely that you'll have specific scenarios that aren't covered here. You can use our free AI metrics generator below to generate your own strategies.

Examples of Inventory Turnover metrics and KPIs

Metrics for Sales Of Existing Inventory

  • 1. Inventory Turnover Ratio

    Measures how often inventory is sold and replaced over a period. Calculated by dividing cost of goods sold by average inventory

    What good looks like for this metric: 2 to 4 times per year

    Ideas to improve this metric
    • Analyse inventory levels regularly
    • Offer discounts on slow-moving products
    • Optimize supply chain processes
    • Increase product visibility through promotions
    • Bundle products to increase sales

  • 2. Sell-Through Rate

    The percentage of inventory sold compared to the amount of inventory received. Calculated by dividing units sold by the initial inventory received

    What good looks like for this metric: 80% or higher

    Ideas to improve this metric
    • Enhance marketing efforts
    • Rotate inventory displays regularly
    • Improve sales staff training
    • Utilize customer feedback for improvements
    • Focus promotions on best-selling products

  • 3. Gross Margin Return On Investment (GMROI)

    Measures the profit a company makes on its inventory investment. Calculated by dividing gross margin by average inventory cost

    What good looks like for this metric: $2 or higher

    Ideas to improve this metric
    • Negotiate better terms with suppliers
    • Improve pricing strategies
    • Reduce inventory holding costs
    • Focus on high-margin products
    • Limit discounting on high-margin products

  • 4. Days Sales Of Inventory (DSI)

    Indicates the average time in days that a company takes to turn its inventory into sales. Lower values are better

    What good looks like for this metric: 30 to 60 days

    Ideas to improve this metric
    • Improve demand forecasting
    • Implement automated inventory management systems
    • Enhance supplier relationships
    • Streamline supply chain processes
    • Conduct regular inventory audits

  • 5. Customer Feedback And Satisfaction Score

    Measure of customer satisfaction with the existing product line, usually through surveys or reviews

    What good looks like for this metric: 4 out of 5 or higher

    Ideas to improve this metric
    • Actively solicit customer feedback
    • Enhance product quality based on feedback
    • Implement a customer loyalty program
    • Improve customer service experiences
    • Address any negative feedback promptly
inventory-turnovercustomer-satisfactionsupply-chain-managersales-analystmarketinginventory-management
Implement these metrics

Tracking your Inventory Turnover metrics

Having a plan is one thing, sticking to it is another.

Don't fall into the set-and-forget trap. It is important to adopt a weekly check-in process to keep your strategy agile – otherwise this is nothing more than a reporting exercise.

A tool like Tability can also help you by combining AI and goal-setting to keep you on track.

Tability Insights DashboardTability's check-ins will save you hours and increase transparency

More metrics recently published

We have more examples to help you below.

Planning resources

OKRs are a great way to translate strategies into measurable goals. Here are a list of resources to help you adopt the OKR framework:

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