Business

Days of Inventory Calculator

Calculate how long your current inventory will last at current sell rate. See industry benchmarks for healthy DOH.

Quick Answer

Days of Inventory = Inventory Value ÷ (Annual COGS ÷ 365). Healthy DOH for most ecommerce: 30-90 days. Above 120 = excess.

Inputs

$
$
Days on Hand
61 days
Health Tier
Average
Turnover / Year
6.00x

Daily COGS: $4,110/day

Calculation: $250,000 ÷ $4,110 = 60.8 days

About This Tool

The Days of Inventory Calculator gives you one of the most important working capital metrics in inventory businesses. DOH (also called DSI — Days Sales of Inventory) tells you how efficiently you are converting inventory into revenue. High DOH ties up cash; low DOH risks stockouts. Most ecommerce stores never calculate this number, then wonder why cash is tight despite good revenue growth.

The DOH Formula

DOH = Inventory Value ÷ (Annual COGS / 365). The denominator is your daily cost of goods sold — what you spend on inventory every day at the current sell rate. The numerator is the inventory dollars sitting on your shelves. Dividing one by the other gives you the number of days your current stock will last. A store with $250K inventory and $1.5M annual COGS turns inventory roughly every 61 days, or about 6 times per year.

Industry Benchmarks

Apparel and accessories: 60-100 days. Beauty and personal care: 45-75 days. Consumer electronics: 30-60 days. FMCG and food: 15-30 days. Furniture and home: 90-150 days. Heavy equipment and B2B: 120-200 days. Anything above the high end of your category benchmark suggests excess inventory or a slow-moving SKU mix. Anything below the low end suggests aggressive stock management — fine if your supply chain can handle it, risky if not.

Reducing DOH Without Stockouts

The fastest path to lower DOH is SKU rationalization. The long tail of slow movers often holds 30-50% of total inventory value while contributing less than 10% of revenue. Killing or de-stocking the bottom 20% of C-class SKUs can drop blended DOH by 15-25 days without affecting revenue. Combine with shorter supplier lead times (move from overseas to nearshore for top SKUs) to compress the safety stock buffer further.

DOH and Cash Conversion Cycle

DOH is one of three components of the cash conversion cycle (CCC = DOH + Days Sales Outstanding - Days Payables Outstanding). Reducing DOH by 30 days on a $1.5M COGS business frees roughly $123K of working capital — cash that can be deployed into ads, hiring, or new product development. This is often the single largest controllable lever for ecommerce cash flow.

Related Tools

See also our safety stock calculator, reorder point calculator, ABC inventory analyzer, AOV calculator, and Shopify store valuation.

Frequently Asked Questions

What is days of inventory on hand (DOH)?
Days of Inventory on Hand = Inventory Value ÷ (COGS ÷ 365). It tells you how many days your current inventory will last at the current sell rate. A store with $250K of inventory and $1.5M annual COGS has $4,110 daily COGS and ~61 days of inventory — meaning current stock would last about 2 months without replenishment.
What is a healthy DOH for ecommerce?
Most ecommerce stores run 30-90 days of inventory. Apparel and seasonal goods tend toward 60-90 days due to longer supplier lead times. Fast-moving consumer goods (FMCG) run 15-45 days. Below 30 days risks stockouts. Above 120 days indicates excess inventory tying up working capital. Best-in-class direct-to-consumer brands hit 45-60 days through tight forecasting.
How is DOH related to inventory turnover?
Inventory turnover = COGS ÷ Average Inventory. DOH = 365 ÷ Turnover. They are mathematically inverse. A turnover of 6 means inventory cycles 6 times per year, which equals 365/6 = 61 days per cycle. Investors and lenders typically look at turnover; operators typically look at DOH because it gives an intuitive day count.
How do I reduce my DOH?
Three levers: increase sell-through (better marketing, pricing, merchandising), reduce supplier lead time (move suppliers, dual-source, hold less safety stock), or rationalize SKUs (kill C-class slow movers). Most stores get the biggest DOH improvement from SKU rationalization — the long tail of slow movers often holds 30-50% of total inventory value.
Is lower DOH always better?
No — DOH that is too low signals understocking and risks stockouts during demand spikes or supplier delays. The right DOH balances working capital efficiency against service level. A retailer with strong supplier relationships and stable demand can run lean (30-45 days). A brand with overseas suppliers and seasonal demand needs longer buffers (60-90 days). Set DOH targets per SKU class — A items lean, C items can carry more.

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