The value of stock turn for retailers
Stock turn indicates how quickly a retailer’s stock is sold and then reordered. A simplistic calculation is: Stock turn = Number of items sold ÷ Average stock level. For example. A retailer sells 10,000 items in a year, and on average holds 2,500 items at one time. 10,000 ÷ 2,500 = 4. Therefore the stock turn rate is 4. This means the retailer is carrying 3 months supply.
What is the value of knowing this? Well, there are three main reasons why successful retailers try and achieve the highest possible stock turn rate without having stock outages and disappointed customers.
David Fairhurst
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