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The DTC Playbook
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What is Inventory Turnover?

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How many times per year you sell through and replace your stock: annual COGS divided by average inventory value. Turn is the speed of your cash engine - slow turns mean cash sleeping in a warehouse, funding nothing. It is also the discipline metric behind range decisions: every extra SKU that turns slowly drags the blended number down and locks up working capital. The mistake is not tracking it at all, or only tracking it blended - run it by SKU and sort the range into A, B and C, so your heroes get the fill-rate protection and your slow movers run lean.

Benchmark. Aim for 4-6x annually for most DTC categories; replenishment-heavy brands can reach 6-8x. Below 4x you are carrying too much stock; above 8x you may be understocking. Slower verticals have lower category norms - treat those as norms, not aspirations.

Read Supply Chain & Operations Term Days Inventory Outstanding Term Safety Stock Term Cash Conversion Cycle Term Stock Keeping Unit
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