What is inventory turnover and how does it apply to e-commerce?

Inventory turnover measures how many times a business sells and replaces its inventory within a given period: Inventory Turnover = Cost of Goods Sold ÷ Average Inventory. In ecommerce, it's a key indicator of sell-through efficiency and working capital management. High-velocity categories (consumables, fashion basics) typically have higher turnover; lower-velocity categories (luxury, custom) have lower turnover with higher margin per unit.