# Inventory turnover

> Inventory turnover is how many times you sell and replace your stock in a year. Higher means your money is working harder.

- Source: https://storestandards.com/glossary/inventory-turnover/
- Also called: Stock turn
- Updated: 2026-08-14
- Author: Priya Raghunathan, Founder, engineer, Store Standards

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Turn of 6 means you sold through your average stock holding six times.

## Working it out

Cost of goods sold for the year, divided by your average stock value at
[landed cost](https://storestandards.com/glossary/landed-cost/).

Sold £180,000 of stock, held £30,000 on average, turn of 6. Roughly two months
of stock on the shelf at any time.

Use cost on both sides. Mixing sales value with stock cost gives a number that
looks great and means nothing.

## What is healthy

- Fashion and seasonal: 4 to 6
- General retail: 6 to 10
- Food and anything perishable: much higher

These are starting points, not targets. A turn that is too high means you are
running thin and taking [stockouts](https://storestandards.com/glossary/stockout/) to do it.

## Where it goes wrong

Turnover is only ever looked at for the whole shop. One number for a store
selling 800 products hides the twenty lines doing all the work and the two
hundred doing none.

Work it out per line, or at least per category. That is where the
[dead stock](https://storestandards.com/glossary/dead-stock/) shows up, and it is the same list that
tells you which [reorder points](https://storestandards.com/glossary/reorder-point/) are set too high.

## Related terms

- [Dead stock](https://storestandards.com/glossary/dead-stock/): Dead stock is inventory that is not selling and is not going to, tying up money and shelf space you need for something else.
- [Landed cost](https://storestandards.com/glossary/landed-cost/): Landed cost is what a unit of stock cost by the time it reached your shelf, including freight, duty and handling.
- [Reorder point](https://storestandards.com/glossary/reorder-point/): A reorder point is the stock level that tells you to order more, set so the delivery lands before you run out.