How is inventory turnover calculated?

Turnover = the period's COGS ÷ average inventory value. Days of inventory (DIO) = average inventory ÷ COGS × days in the period. Both are at cost.

What is a good inventory turnover?

There is no universal number; it depends on category, lead time and business model. On Amazon there is a concrete line: an aged inventory surcharge from day 181 in the US. If your average days of inventory approach it, your slowest items may already be past it.

Inventory Turnover How many days does stock sit?

Enter the period's cost of goods sold and your average inventory value: turnover, days of inventory (DIO) and months of stock on one screen. If even the average crosses Amazon's aged inventory line, the tool says so.

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Last updated: September 26, 2026

4.0×

Example turnover

Days of inventory in the same example

181

Day Amazon US's aged inventory surcharge starts

sellerniche.com/dashboardPREVIEW

🔄Inventory TurnoverOVERVIEW

Turnover4.00×

Days of inventory91.3

Months of stock3.0

Sample view — your own data after sign-inSeller Niche

Inventory Turnover & Days of Inventory

LIVE

Average inventory

Cost of goods sold in the period — COGS ($) · not sales revenue — at cost

Average inventory value — at cost ($)

Period (days) · 365 = year, 90 = quarter, 30 = month — same period as COGS

ⓘ Rounding: money lines are rounded to the nearest cent, and the total on screen is the sum of the lines on screen. The marketplace's own rounding can differ by a cent per line; in tiered rate cards the direction of that difference is not guaranteed.

Inventory turnover (in the period)4.00×

Days of inventory (DIO)

91.3

Months of stock

3.0

Stock sold per day (COGS/day)

$164.38

Show the math

Inventory turnover = Cost of goods sold in the period — COGS ÷ Average inventory value — at cost

= $60,000.00 ÷ $15,000.00 = 4.00×

Days of inventory = Average inventory value — at cost ÷ Cost of goods sold in the period — COGS × Period

= $15,000.00 ÷ $60,000.00 × 365 = 91.3

Months of stock = Days of inventory ÷ (365 ÷ 12)

= 91.3 ÷ (365 ÷ 12) = 3.0

Written with the on-screen (rounded) figures; the last digit may differ by ±1 from rounding.

Turnover = COGS ÷ average inventory; days of inventory = average inventory ÷ COGS × days in the period. Both are AT COST — put sales revenue in place of COGS and turnover comes out too high. A "good" turnover depends on the category and business model; we do not print a universal threshold. The one hard line is Amazon's own rule: in the US an aged inventory surcharge from day 181.

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The problem

Stock on the shelf quietly eats cash.

Sales can look fine while stock turns slowly and cash sits in the warehouse; on Amazon a surcharge starts after a certain age.

💸

Locked-up cash

Slow stock ties up money that could fund new products or ads.

⏳

Aged inventory surcharge

Amazon US charges a surcharge on top of storage from day 181.

📐

Wrong denominator

Using revenue instead of COGS makes turnover look higher than it is.

Features

Turns, days, months — one screen.

🔄

Turnover

COGS ÷ average inventory; annualised if the period is not a year.

📅

Days of inventory

How many days of sales your average stock covers.

⚖️

Opening + closing

Don't know the average? It is worked out from opening and closing stock.

⏳

Amazon's line

Warns if the average passes 181 days — no invented "good turnover" line.

How it works?

1️⃣

Pick the period

Year, quarter or month — in days.

2️⃣

Enter COGS

The COST of goods sold, not revenue.

3️⃣

Enter average stock

One value, or opening + closing.

Related Tools

📉

Sell-Through Rate Calculator

Sell-through and days to sell out

🏷️

Inventory Carrying Cost Calculator

The yearly cost of holding stock

📦

Reorder Point Calculator

When and how much to reorder

Frequently Asked Questions

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