There’s a number sitting in your inventory right now that’s telling you exactly when your business is going to implode, and you’re not looking at it. It’s not your sales count. It’s not your traffic. It’s not even your profit margin, though that one’s trying to warn you too. It’s your inventory turn rate, and if you don’t know what that is, you’re already in trouble.
Most sellers treat inventory like a high score. The more they have, the better they feel. Look at all these products. Look at this selection. Look at how prepared I am. Except you’re not prepared. You’re buried. And the longer that stuff sits there gathering dust, the closer you are to closing up shop and pretending it was always just a hobby anyway.
Inventory turn rate is how fast you sell through your stock and replace it. If that number’s low, you’re not running a business. You’re running a storage unit that occasionally ships something. And storage units don’t make money. They cost it.
Slow-Moving Inventory Is a Loan You Can’t Repay
Every dollar sitting in unsold inventory is a dollar you can’t use for anything else. You can’t reinvest it. You can’t pay bills with it. You can’t buy better products or run ads or do literally anything useful, because it’s trapped in a box in your garage that nobody wants.
That’s dead money. And the longer it sits, the deader it gets. Products go out of season. Trends shift. Competitors undercut you. And that thing you bought six months ago thinking it was a winner? It’s now a loser eating up space and capital while you scramble to figure out what went wrong.
Here’s what went wrong. You didn’t pay attention to how fast things were moving before you bought more. You ordered based on hope instead of data. And now you’re stuck.
You’re Guessing When You Should Be Measuring
Most sellers don’t even know their turn rate because they’ve never calculated it. They just know they have “stuff” and sometimes it sells. That’s not inventory management. That’s gambling with extra steps.
Turn rate is simple. Take your cost of goods sold, divide it by your average inventory value, and you’ve got your number. If it’s above 4, you’re moving product. If it’s below 2, you’re dying slowly and hoping nobody notices. If it’s below 1, start writing your going-out-of-business email now because you’re already done.
The faster your inventory turns, the healthier your business. It means you’re selling things people actually want, restocking quickly, and keeping cash flowing instead of trapped. Slow turn rate means you’re sitting on product nobody’s buying, which means you either picked wrong or priced wrong, and either way you’re bleeding.
Old Inventory Doesn’t Get Better With Age
This isn’t wine. Sitting on inventory doesn’t increase its value. It destroys it. The longer something sits unsold, the less it’s worth. Seasons change. Styles shift. Technology updates. And that thing you’re holding onto because “it’ll sell eventually” is now competing with newer, better versions of itself while you’re still trying to break even.
Sellers love to convince themselves that if they just wait a little longer, the right customer will come along. They won’t. The right customer already bought from someone else who priced it to move instead of priced it to hope.
Every month you hold onto dead inventory is another month you’re not using that money to buy something that actually sells. You’re stuck in the past while your competitors are moving forward, and the gap just keeps getting wider.
Cash Flow Stops When Inventory Doesn’t Move
Here’s the death spiral. You’ve got money tied up in slow inventory. You need cash to restock the stuff that actually sells. But you can’t afford to restock because your cash is stuck in the stuff that doesn’t sell. So you run out of your best sellers, sales drop, and now you’re sitting on a pile of junk with no way to buy your way out.
That’s how businesses die. Not dramatically. Quietly. You just slowly run out of the ability to function because your cash is locked in products nobody wants, and by the time you realize it, you’re too broke to fix it.
Turn rate tells you this is coming long before it happens. If your inventory’s turning slowly, you’ve got a warning. If you ignore it, you’ve got a closing date.
The Only Fix Is to Move It or Dump It
You’ve got two options when inventory isn’t moving. Discount it until it does, or write it off and move on. There’s no third option where you keep it forever and magically it starts selling at full price. That’s a fantasy.
Most sellers can’t pull the trigger on a discount because it feels like admitting defeat. Guess what? Holding onto dead inventory is also admitting defeat, you’re just doing it in slow motion while pretending you haven’t lost yet.
Cut your price, clear the junk, get your cash back, and use it to buy something that actually sells. That’s not failure. That’s business. The failure is sitting on it until it’s worthless and you’re bankrupt.
Here are Five Things You Can Do Right Now.
First, calculate your inventory turn rate right now. Cost of goods sold divided by average inventory value. If you don’t know those numbers, figure them out. You can’t fix what you’re not measuring, and you’re definitely not measuring this.
Second, identify anything that’s been sitting for more than 90 days and discount it immediately. Don’t wait for the “right time.” The right time was two months ago. Get it moving or get it gone. Your cash flow will thank you.
Third, stop ordering based on gut feelings. If something’s turning slowly, don’t reorder it just because you like it or think it’ll “pick up eventually.” Data beats hope every time. Order what’s actually selling, not what you wish was selling.
Fourth, set a turn rate target and track it monthly. If you’re below 4, you’ve got a problem. If you’re below 2, you’ve got an emergency. Treat it like one. Your inventory should cycle multiple times a year, not sit there like a museum exhibit.
Fifth, resist the urge to bulk order just because the per-unit cost is lower. Yeah, it’s cheaper to buy 500 units instead of 100. It’s also cheaper to buy zero units of something that doesn’t sell. A lower cost per unit means nothing if you can’t move the volume. Start small, prove demand, then scale. Not the other way around.
Inventory turn rate is the number that tells you if your business is healthy or circling the drain. If you’re ignoring it, you’re flying blind. And blind pilots crash. Every time.
FREE – get my 
