DIRECT ANSWER
What counts as a good inventory turnover ratio?
There is no universal number. The median for the cohort is the right comparator; the top-quartile mark is the right ambition.
Sixteen industry bands
| Industry | Bottom quartile | Median | Top quartile |
|---|---|---|---|
| Apparel Retail | 2.8x | 4.0x | 6.2x |
| Grocery | 11.0x | 14.0x | 18.5x |
| Jewelry | 0.9x | 1.5x | 2.4x |
| Auto Parts | 4.2x | 6.0x | 8.5x |
| Electronics | 4.5x | 6.5x | 9.0x |
| Furniture | 2.0x | 3.0x | 4.8x |
| Restaurants | 16.0x | 22.0x | 28.0x |
| Hardware Stores | 2.5x | 3.5x | 5.0x |
| Pharmacy | 9.0x | 12.0x | 15.5x |
| Building Supplies | 3.2x | 4.5x | 6.5x |
| Wholesale Distribution | 5.0x | 7.0x | 10.0x |
| Ecommerce | 3.5x | 5.0x | 7.5x |
| Manufacturing | 5.0x | 7.5x | 11.0x |
| Hardware SaaS | 2.8x | 4.0x | 6.0x |
| Cosmetics | 2.4x | 3.5x | 5.0x |
| Books and Media | 2.0x | 3.0x | 4.5x |
The right comparator
Use the median for the NAICS cohort that fits the business. Compare the trailing-twelve-month ratio against the median first; against the top quartile only after the median is held for two cycles.
Why higher is not always better
A ratio well above the top quartile typically reflects stockouts (lost margin) or a heavy drop-ship mix (which removes inventory from the denominator). Cross-check fill rate, lost-sale units, and the on-hand units per top-selling SKU.