| Metric | Benchmark | Notes |
|---|---|---|
| Inventory turnover | 4-6x a year for most; 6-8x for replenishment-heavy brands | Annual COGS divided by average inventory value. Below 4x means too much stock; above 8x you may be understocking. |
| Days inventory on hand by category | Subscription consumables 30-60, food and bev 60-100, beauty 90-140, apparel 110-180, hard goods 120-200 | Wildly category-dependent. The slower verticals imply turnover below the 4-6x target, and those are category norms, not aspirations. |
| Days inventory outstanding | 60-120 days for most DTC brands | The largest part of the cash cycle. Shopify and Stripe settle in 1-3 days, so inventory and supplier terms decide the rest. |
| Cash conversion cycle | Under 60 days | CCC = days inventory outstanding + days sales outstanding - days payable outstanding. The true cash exposure window is often 3-6 months, because the formula only starts once stock reaches your warehouse. |
| Inventory as a share of revenue | Many brands sit at 20-30%; Quad Lock kept it under 15% | Pipeline, on-hand and safety stock combined. Quad Lock tied up just 8-13% of revenue with very few stock-outs, but a low-SKU durable brand can run leaner than most, so plan off your own structural ratio. |
| In-stock rate | 95%+ on A-items; about 90% across the catalogue | C-items can run leaner, and an 80-85% in-stock target is fine for them. |
| Supplier terms | Net 30+ by your fifth order | Move from 30/70 deposits to graduated terms, such as 30% deposit, 30% on shipment and 40% Net 30. |
| Cash runway | 90+ days | Keep any single purchase order under 30% of available cash, and run a 13-week rolling cash forecast every week. |
| Inventory financing cost | Under 15% annualised; inventory financing runs 8-20% | Revenue-based financing runs 20-40% effective annualised, so match the capital to the job: supplier terms and financing for repeatable cycles, equity only for genuine bets. |
| Supplier lead times | If the supplier says 30 days, plan for 60 | Reality usually runs 30-50 days. Ignoring lead-time variability is one of the most common inventory mistakes. |
How to use these benchmarks
These ranges are directional, not guarantees. They are drawn from The DTC Playbook and Rob Ward's operating experience taking Quad Lock from $0 to a $500M exit, cross-checked against widely cited DTC data. The point is not the exact number - it is whether you sit above or below it, and what to do about the gap. Judge yourself against your own category and trend as well.
Last reviewed: October 2026. Benchmarks are refreshed as the playbook is updated.
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