How to improve inventory turnover

What turnover actually measures

Inventory turnover tells you how many times you sell through your stock in a given period. Low turnover means cash sitting on shelves as unsold stock. High turnover, if you can still meet demand without stockouts, means your money is moving and working for you.

Order smaller and more often

Buying six months of stock in one go looks efficient but ties up cash and slows turnover. Order close to your real lead time plus a safety buffer, and reorder on a schedule instead of in big irregular batches. This keeps average stock levels lower while still covering demand.

Fix the slow movers first

Turnover is dragged down by a small number of SKUs that barely sell. Pull a report of days of stock per variant (on hand divided by daily sales) and find anything sitting at 90, 120, or more days of cover. Discount, bundle manually, or stop reordering these rather than let them sit.

Use data, not habit, to set order quantities

Many stores reorder the same quantity every time out of habit. Base quantities on recent daily sales, lead time, and a safety margin instead. This stops you over-ordering items that have slowed down and under-ordering items that have picked up.

Step by step

1. Pull a days-of-stock report for every active variant (on hand divided by average daily sales).
2. Flag anything over roughly 90 days of cover as slow moving and decide: discount, stop reordering, or clear it out.
3. For fast movers, recalculate reorder points using daily sales x (lead time + safety days).
4. Switch from large infrequent orders to smaller orders on a regular cycle matched to supplier lead times.
5. Track turnover monthly, not quarterly, so you catch slowdowns early.
6. Review safety stock days per supplier; cut them if a supplier has been reliable and lead times are short.

Worked example

A store has a SKU selling 2 units a day, 40 units on hand, and a supplier lead time of 14 days. Days of stock = 40 / 2 = 20 days, which is fine. Another SKU sells 0.2 units a day but has 60 units on hand: days of stock = 60 / 0.2 = 300 days. That second SKU is the one dragging down turnover and should be discounted or dropped from the next order, not reordered automatically.

How SteadyShelf helps

SteadyShelf helps directly here: it forecasts daily sales per variant from a 28-day window, sets order-by dates and quantities from lead time and safety days, and rounds to case packs so you are not over-ordering. It does not calculate a formal turnover ratio or flag slow movers automatically, so you still need to pull a days-of-stock view yourself and decide what to discontinue.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related guides

• How to keep a purchase order history
• How to keep a supplier list organized
• How to keep inventory costs under control
• How to handle supplier minimums when cash is short

All inventory how-to guides · Inventory glossary

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