Ideally, you want to increase your inventory turnover and reduce your holding of inventory for a couple of reasons.ДЇirstly, increasing your turnover means reducing your holding cost. You may be experiencing stock shortages because you underestimated demand, or the product has gone viral and sales have gone off the charts.

On the other hand, a high turnover rate may mean inadequate stock and a potential loss in sales as the inventory level is too low. Basically, your goods are not selling as expected. This is the number of times inventory is sold within a period of time, typically a year.ДЄ low turnover may suggest that youвЂ™re overstocking, dealing with obsolete goods, or that you have issues with the product or your marketing efforts. Inventory Turnover Inventory Turnover = Cost of Goods Sold / Average Inventory LetвЂ™s start with the most critical one that everyone talks about first when this topic comes up. We think these are the top 10 inventory metrics that you need to know right now. With these indicators, you can benchmark your operations performance over time and against the industry average. Why should you care about inventory metrics? Because as an indicator of stock control, they give you an insight into how your stock touches every part of your business operations. As a busy wholesaler and distributor, in between receiving purchases and fulfilling orders, IвЂ™m sure you must wonder how your business is doing.

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