The Best Inventory KPIs to Track

If you can only watch five numbers, watch these.

1. Inventory turnover

COGS ÷ average inventory. Tells you how many times you sold through your stock. Higher is generally better — but too high means stockouts.

2. GMROI (Gross Margin Return on Inventory Investment)

Gross margin ÷ average inventory cost. The single best measure of inventory profitability. Aim for 2.5+ for retail, 3+ for distribution.

3. Stockout rate

Lost sales due to out-of-stock ÷ total demand. Anything above 5% is bleeding money.

4. Dead stock percentage

SKUs with zero movement in 180 days ÷ total SKUs. Should stay under 10%.

5. Sell-through rate

Units sold ÷ units received in the same period. Critical for seasonal categories.

How to track them

Don't pull these from Excel. The numbers go stale within hours. Use a system that updates dashboards live as bills are raised and stock moves.

How InventorySaaS helps

Every KPI above is on the home dashboard, refreshed in real time, with drill-downs to branch, category and SKU level.