Can anyone recomend a website that lists by retailer or retailer type what their average inventory turn is?
I am a low volume (1 million cost of sales) sporting goods vendor that makes high margin (40%).
What would a safe inventory level be? Currently I do about 1.5 turns anually but my owner is asking for 3-4. I can’t increase sales and they say by decreasing my inventory I can get better turns.
Any references?
Wow. I won’t stock anything over $25 if it doesn’t turn 7 times and (less than $25, 5 turns) I’m lucky if I get a 28% GMOP overall.
Websites with cites? Sorry!
There IS no magic number for turns in any industry, and it varies considerably for each company! The optimum target for turns is dependent on many factors, your supplier’s lead time, supplier’s minimum order qty, seasonality, and the expectations of your customers.
Start with the customer! How many of them expect or demand quick delivery? If you can’t deliver the goods tomorrow, do they desert you and go to the competition? If so, you CAN’T afford to decrease your inventory and KEEP your customers, right?
Aha! Found it myself.
Went to MSN.com
>Money
>investing
>stock-research wizard
>financial results
>key ratios
>management efficiency
Just plug in a company get thier turn times and an industry average.