Inventory Turnover and Days of Supply for Shopify Stores

Two of the most useful inventory metrics answer the same question from opposite directions: is my cash moving, or sitting still? Inventory turnover looks backward at how many times you sold through your stock. Days of supply looks forward at how long your current stock will last. You want both, and they are easy to confuse.

Inventory turnover: how many times you cycled

Inventory turnover measures how many times you sold and replaced your inventory over a period, usually a year:

Inventory turnover = cost of goods sold / average inventory value

If your COGS for the year was 500,000 and your average inventory value was 100,000, you turned your inventory five times. Higher turnover means your cash is cycling efficiently, getting bought, sold, and reinvested. Lower turnover means capital is sitting on shelves.

The catch is that a single store-wide turnover number hides almost everything useful. Your A items and your slow C items turn at completely different rates, and the blended figure tells you nothing about which is which.

Days of supply: how long current stock lasts

Days of supply flips the view forward:

Days of supply = current units on hand / average daily sales

A product with 240 units selling 8 a day has 30 days of supply. It is per-SKU and forward-looking, which makes it the more actionable of the two day to day. It tells you, right now, which products are about to run dry and which are drowning in cover, and it feeds directly into reorder timing and days-of-cover alerts.

Turnover, sell-through, and days of supply are not the same

It is worth keeping these straight, because they get used interchangeably and should not be:

Turnover is backward-looking: how many times you cycled stock in a period.
Sell-through is how much of a particular batch sold within a window, the buying-decision metric covered in what sell-through rate actually tells you.
Days of supply is forward-looking: how long current stock lasts at the current pace.

They complement each other. Turnover tells you how efficient your inventory has been, days of supply tells you what to do next, and sell-through tells you whether a specific purchase worked.

What good looks like

There is no universal target, despite what listicles claim. A low-margin, fast-moving store needs high turnover to make the model work. A high-margin store selling considered purchases can run comfortably at much lower turnover. The useful exercise is tracking your own trend over time and comparing your SKUs against each other, not chasing an industry average that was never about your business.

How Stockful helps

Stockful shows days of supply on every SKU, and your sales and valuation data give you turnover, so you can see at a glance which products are cycling cash and which are stuck, broken down by location. Read together, they turn “how is my inventory doing” from a vague feeling into a number you can act on.

Get started free at stockful.app. Stockful shows days of supply per SKU and the data behind your turnover, per location.

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