Inventory Turnover Calculator
Measure how quickly you sell through stock. Useful for dropshippers who hold limited inventory in addition to dropshipping.
What this means
Enter your numbers and click Calculate.
Inventory Turnover for Dropshippers Who Hold Some Stock
Pure dropshippers do not hold inventory, so inventory turnover is irrelevant to them. But many dropshippers eventually graduate to a hybrid model — holding their top 3–5 SKUs in a US-based 3PL to cut shipping times from 14 days to 3, while dropshipping the long tail. For these hybrid stores, inventory turnover is the metric that prevents cash from getting trapped in dead stock.
The Formulas
Inventory Turnover = COGS ÷ Average Inventory Value
Days Sales of Inventory (DSI) = 365 ÷ Inventory Turnover
Turnover of 4× means you sell through your entire inventory 4 times per year, or roughly once every 91 days. DSI of 91 means the same thing — your average unit sits in your warehouse for 91 days before selling.
What Is a "Good" Turnover Ratio?
For ecommerce, anything above 6× per year (DSI under 60 days) is healthy. Below 4× (DSI over 90 days) suggests you are over-ordering or your product is losing momentum. Below 2× (DSI over 180 days) means you have a cash-flow problem — your money is trapped in slow-moving stock.
The Hybrid Dropshipping Strategy
Top dropshippers often run a hybrid model: identify your top 3–5 SKUs by revenue and ship them from a US 3PL (ShipBob, Deliverr, Fulfillment by Amazon) for 2–5 day delivery. Dropship the rest. This balances conversion lift (fast shipping on best-sellers) with capital efficiency (no inventory investment on slow-movers).