How to Improve Inventory Turnover for Your Ecommerce Business

You know that feeling when a product you thought would fly off the shelves… just sits there? 

Weeks. Maybe months go by. It takes up warehouse space, ties up cash, and slowly turns into a liability that you keep pushing down the priority list.

The fashion industry alone had excess stock worth $70 billion to $140 billion in sales in 2023.

That’s where a metric called inventory turnover rate can help. 

A low turnover rate tells you something’s off. Maybe you’re overordering, maybe your pricing’s wrong, or maybe your product pages aren’t doing their job.

But but but…it’s all fixable. All you need is some smart strategies. 

In this article, we will explain, step by step, some practical ways to improve your inventory turnover ratio.

How to calculate your current inventory turnover ratio?

You can't fix without knowing what’s broken. So if you want to improve your inventory turnover ratio, the first step is understanding where you stand right now.

Use the following formula to calculate the inventory turnover ratio

Inventory Turnover = Cost of Goods Sold (COGS) ÷ Average Inventory

To find the average inventory, add your beginning and ending inventory for the period, then divide by 2.

For example, if your COGS is $100,000 and your average inventory is $25,000, your turnover ratio is 4. This means your inventory was sold and replaced four times during the period.

A higher ratio typically means you’re selling efficiently, while a lower ratio may suggest overstocking or slow-moving products. 

Given that, the average inventory turnover ratio as of Q1 of 2025 for the retail sector is 9.57. 

How to improve inventory turnover for your ecommerce business

Fixing lower inventory turnover doesn’t always mean selling more, it means selling smarter. The following eight tips will help you do just that.

1. Liquidate unsold or aging stock strategically

Old, slow-moving inventory takes up space and locks up cash that could be used to buy faster-moving products. 

Instead of letting it gather dust, use ABC analysis to classify your inventory into A (high-value items), B (medium-value items), and C (low-value items). Note that the value here refers to the contribution to your revenue. 

Then, implement these smart ways to move out unsold inventory:

• Create tiered discount levels based on the duration of items being in stock (e.g., 20% off after 60 days, 30% off after 90 days, etc.)
• Bundle slow movers with bestsellers to reduce inventory count while maintaining decent margins
• Use aging inventory as free gifts for customers when they make a purchase. You can also send them in giveaways or to influencers in exchange for user-generated content
• Convert dead stock into loyalty program perks where customers can "redeem" them at no cost to you
• Run limited-time "last chance" campaigns or build product pages on your website to create urgency around items you would discontinue moving forward

Don't slash prices across the board indiscriminately. Target your approach to preserve as much margin as possible while still moving the inventory out.

2. Offer pre-orders to eliminate overstock risk

For improved inventory turnover, you can also offer pre-orders. These flip the traditional inventory process by letting you sell products even before you purchase them, helping you: 

• Get accurate demand data before committing to inventory purchases
• Generate cash flow upfront that can help fund your purchase orders
• Create excitement and exclusivity around new product launches
• Reduce the risk of overstocking on products with uncertain demand (say, new launches)

When offering pre-orders, be transparent about shipping timelines and offer incentives (like special pricing or bonuses) to compensate customers for waiting. 

3. Sell on secondary channels 

The more holes a bucket has, the faster the water drains. Similarly, the more sales channels your inventory is on, the faster it moves.

Different channels attract different customer segments who might be interested in products that aren't moving on your primary channel. 

Consider expanding to:

• Marketplaces like Amazon, eBay, or Walmart
• Social commerce channels like Instagram Shop or Facebook Marketplace
• Wholesale trade for local retailers or distributors
• Flash sale sites for quick inventory clearance

Just be sure to keep your inventory in sync across platforms to avoid stockouts or double-selling. Using a tool like Webgility makes that part easier by automating updates across all your channels.

4. Improve inventory forecasting accuracy 

The more accurate your forecasting, the better your inventory flows.

Use historical sales data, seasonal trends, and upcoming marketing plans to project demand more reliably. Factor in things like lead times, supplier delays, safety stock, and product lifecycles. If you’re selling across multiple channels, make sure you’re looking at the full picture, not just your main store.

Consider using multi-channel inventory management tools (preferably with AI capabilities) and syncing your sales & inventory data so that you’re not forecasting off messy or partial numbers.

5. Strengthen supplier relationships

A good relationship with your suppliers can have a direct impact on how well you manage your inventory. Reliable suppliers mean faster restocks, better flexibility during demand spikes, and fewer delays.

Keep communication open. Share your forecasts early, ask about lead time changes, and build trust by paying on time. Strong relationships can also give you the window to negotiate smaller MOQs, priority during tight supply periods, and buyback options. 

Better coordination with suppliers helps you avoid over-ordering and understocking, both of which drag down your turnover ratio. 

6. Automate inventory tracking and syncing across channels

You can’t see the real picture of your inventory turnover until all your stock data lives in one place. When inventory is scattered across platforms and updated manually, it’s easy to overorder and end up with excess stock sitting idle in your warehouse.

Automating inventory tracking across all your sales channels, whether that’s your website, Amazon, eBay, or others, allows you to work with accurate, real-time data. 

Tools like Webgility sync inventory across channels and other key platforms like your accounting software. It updates quantities as orders come in, saving you time wrestling with spreadsheets and reducing the risk of errors. 

With everything connected, you get an accurate view of what’s moving, what’s stuck, and what needs attention, helping you optimize reordering and stock management for smoother operations.

7. Optimize product listings for better visibility

Sometimes inventory moves slowly simply because customers can't find your products. You need to improve their discoverability and appeal. 

Start by using exact keywords in your titles, descriptions, and tags that your target customers are searching for. The better you match search queries, the higher your product ranks. Include FAQs to answer common queries before they're asked.

High-quality images and clear, informative descriptions can also significantly impact conversions. Don’t forget to optimize your ecommerce site for mobile users since many shoppers browse from their phones.

Lastly, keep an eye on your competitors’ listings. What are they doing differently? Can you offer something better, whether it’s product features, price, or shipping options? With a well-optimized product listing, your slow-moving inventory can quickly pick up pace.

Tip: Use SEO tools to find queries and FAQs with high search volume 

8. Allow partial payments or pay later options

Offering flexible payment options can help move inventory faster by adding convenience to your customers’ journey. Not everyone wants or can pay the full price upfront, but that doesn’t mean they won’t buy.

Allowing partial payments or integrating “buy now, pay later” (BNPL) options like Klarna can increase conversion rates, especially for higher-priced items. BNPL usage is the greatest among Gen-Z, with an expected adoption rate of 47.4% in 2025.

These options make it easier for customers to commit to a purchase without the barrier of paying everything at once, which can be particularly useful for slow-moving or premium products.

Not only does this move inventory, but it also encourages customers to buy more, knowing they can split their payments over time.

Now, where should you begin?

To truly make any of these tips work, you’ve got to start with the right foundation: accurate inventory data. 

Without it, trying to improve turnover is like building on sand; nothing’s going to stick. That's where Webgility steps in.

Webgility connects all your sales channels and accounting tools, syncing your inventory in real-time so you're never shooting in the dark. 

No more guessing, no more manual updates, just reliable data to help you make smarter moves. Give Webgility a try and see how much easier it is to improve inventory turnover.