Inventory Turnover Rate Calculation

The mind-blowing statement in Eternal’s Q4 FY25 earnings is — Blinkit projects a 22x Inventory Turnover Ratio — to provide some benchmarks: DMart’s inventory turnover ratio is 12.5 Reliance Retail’s inventory turnover ratio is ~9.5 Kirana store’s inventory turnover ratio is ~6 Note: Blinkit’s global QC players don’t disclose this metric because they operate on a pick & drop model e.g. DoorDash and InstaCart in USA i.e. they don’t hold inventory. Here’s a quick breakdown ⤵️ (1) What is the Inventory Turnover Ratio (ITR)?💡 - Measures how many times in a year the company is able to sell its entire inventory of goods - It can also be expressed as ‘inventory days’ i.e. no. of days taken to sell the entire inventory - e.g. for Blinkit → x22 ITR means inventory of ~₹1,000 crore working capital (per financials) is sold in ~16 days (i.e. 365/22) (2) Why does it matter? 🤔 - Higher ITR means the inventory is being sold faster - Faster sales means (a) Lower liquidation (i.e. old inventory sold for scrap), (b) Low storage costs, (c) Good inventory forecasting — all of which result in good cashflows in the long term - Therefore, Blinkit projecting a x22 ITR means their velocity is almost x2 of DMart (3) Quick Commerce ITR is 🔥 - Recently, Eternal was able to push its domestic ownership above 50%, which as per FDI e-commerce rules, allows Eternal to hold 1P inventory - The simplistic profit calculation here is: ITR x blended_%_margin - IFF Blinkit has a x2 to x3 upside on ITR, it would be able to cut its blended margin (viz other commerce alternatives) AND yet come out more profitable This is one of those few occasions as an Eternal shareholder where a statistic has truly surprised me — the ITR projection is very promising! ➡️Personally, I’m looking forward to seeing how Blinkit evolves from the current 3P franchise dark store model to a 1P full stack dark store model (i.e. Hyperpure supplied inventory, Blinkit owned dark store etc) #startups #india

HR: Employees are leaving jobs. CFO: Do we have data on why they’re leaving? HR: Yes. 70% of our turnover is tied to unmet needs like growth, recognition, and flexibility. CEO: But how much does it actually cost us when they leave? HR: Each lost employee costs 1.5x their salary to replace, not to mention the productivity gap. CEO: We need to reduce spending. We can't spend on engagement programs. CFO: What’s the impact of these engagement programs on retention? HR: Programs focused on growth and recognition have reduced turnover by 25%, saving us $3M annually. CEO: Are there other benefits to meeting employee needs? HR: Absolutely. Employees who feel valued are 30% more productive and report higher satisfaction. CFO: What about profitability? CHRO: Engaged teams generate 21% higher profitability. It’s not just about keeping them. It’s about keeping them productive and motivated. CEO: So cutting back on programs that meet employee needs could cost us more? CFO: The data shows there’s a significant financial impact. HR: Meeting employee needs isn’t just an expense. It’s an investment in retention, productivity, and profit. The lesson? Employees quit when their needs go unmet, whether it’s for growth, recognition, or flexibility. Invest in your employees.

What's the right number of inventory days for a brand to hold? There's lot of debate here, too little inventory and you risk lost sales, too much inventory and you block working capital. So what's the right balance? 🤔 The answer depends on how responsive your supply chain is. #1 LOWER LEAD TIME TO RESTOCK = LOWER INVENTORY REQUIRED The amount of inventory you need to hold depends on the lead time for replenishment of products. If you can replenish out of stock items with fresh production in 30 days vs. 60 days vs. 90 days, your inventory line item looks very different in each case. In apparel, typically fabric takes 45-60 days to make at least. Garment stitching takes another 30 - 45 days. So unless you have fabric already on the floor, your lead time to replenish is anywhere from 75 to 120 days. Given you always want a reasonable buffer stock, my understanding is that as a brand you would typically need 90 to 120 days of inventory to be in a healthy position. #2 LOWER MOQs (MORE FLEXI MFTG) = LOWER INVENTORY REQUIRED The other factor that affects inventory levels is MOQ (minimum order quantity). The smaller MOQs you can negotiate with suppliers, the less stock you need to hold on hand, and the more frequently you can buy small lots to replenish. For example if your MOQ was 3000 units for a certain SKU, then you would need to stock up 3000 units even if demand was only 500 units per month, so you would hold 6 months of stock at a time. But if MOQ was 1500 units, you could buy half the stock and replenish every 3 months. Yes, line manufacturing efficiency drops slightly when producing 1500pcs vs. 3000 pcs, but I've found that it's typically worth paying a few rupees more per pc in exchange for lower MOQs, as you block less cash in working capital and can earn a higher ROCE (return on capital employed). So how do the best in the business do it? ~ Super lean: Zara boasts 10-12 inventory turns a year, which means 30-45 days of inventory in hand. It's a fast fashion brand with probably the world's best supply chain. It's only able to do this since it's time from design to retail is as low as 15 days. ~ Quite bloated: Gocolors or Aditya Birla Fashion & Retail as per public numbers have 200+ days of inventory (<2 turns per year). They are able to hold such large inventory as they have mainly core units that have low risk of dead stock, and they are able to finance most of the inventory on credit from suppliers. ~ Moderate: Tata Trent and Manyavar have 80-100 days of inventory (3.5 to 4.5 turns per year). Inventory is the single largest driver of working capital requirements for apparel brands, and its optimisation is one of the main success or failure levers in the long term. How are you thinking about how much inventory to hold?

Inflation isn’t just an economic challenge—it’s a test of agility for businesses. As costs rise and purchasing power shifts, companies that rely on gut instinct risk falling behind. The real winners? Those who use data-driven insights to navigate uncertainty. 1️⃣ Understanding Consumer Behavior: What’s Changing? Inflation reshapes spending habits. Some consumers trade down to budget-friendly options, while others delay non-essential purchases. Businesses must analyze: 🔹 Spending patterns: Are customers shifting to smaller pack sizes or private labels? 🔹 Channel preferences: Is there a surge in online shopping due to better deals? 🔹 Regional variations: Inflation doesn’t hit all demographics equally—hyperlocal data matters. 📊 Example: A retail chain used real-time sales data to spot a shift toward economy brands, allowing it to adjust promotions and retain price-sensitive customers. 2️⃣ Pricing Trends: Data-Backed Decision-Making Raising prices isn’t the only response to inflation. Smart pricing strategies, backed by AI and analytics, can help businesses optimize margins without losing customers. 🔹 Dynamic pricing models: Adjust prices based on demand, competitor moves, and seasonality. 🔹 Price elasticity analysis: Determine how much a price hike impacts sales before making a move. 🔹 Personalized discounts: Use customer data to offer targeted promotions that drive loyalty. 📈 Example: An e-commerce platform analyzed customer behavior and found that small, frequent discounts led to better retention than infrequent deep discounts. 3️⃣ Demand Forecasting & Inventory Optimization Stocking the right products at the right time is critical in an inflationary market. Predictive analytics can help businesses: 🔹 Anticipate demand surges—especially in essential goods. 🔹 Optimize supply chains to reduce excess inventory and prevent stockouts. 🔹 Reduce waste in perishable categories like F&B, where price-sensitive demand fluctuates. 📦 Example: A leading FMCG brand leveraged AI-driven demand forecasting to prevent overstocking of premium products while ensuring budget-friendly variants were always available. 💡 The Takeaway Inflation isn’t just about rising costs—it’s about shifting consumer priorities. Companies that embrace data-driven decision-making can optimize pricing, fine-tune inventory, and strengthen customer loyalty. 𝑯𝒐𝒘 𝒊𝒔 𝒚𝒐𝒖𝒓 𝒃𝒖𝒔𝒊𝒏𝒆𝒔𝒔 𝒂𝒅𝒂𝒑𝒕𝒊𝒏𝒈 𝒕𝒐 𝒊𝒏𝒇𝒍𝒂𝒕𝒊𝒐𝒏𝒂𝒓𝒚 𝒑𝒓𝒆𝒔𝒔𝒖𝒓𝒆𝒔? 𝑨𝒓𝒆 𝒚𝒐𝒖 𝒖𝒔𝒊𝒏𝒈 𝒅𝒂𝒕𝒂 𝒕𝒐 𝒓𝒆𝒇𝒊𝒏𝒆 𝒚𝒐𝒖𝒓 𝒔𝒕𝒓𝒂𝒕𝒆𝒈𝒚? 𝑳𝒆𝒕’𝒔 𝒅𝒊𝒔𝒄𝒖𝒔𝒔 𝒊𝒏 𝒕𝒉𝒆 𝒄𝒐𝒎𝒎𝒆𝒏𝒕𝒔! #datadrivendecisionmaking #dataanalytics #inflation #inventoryoptimization #demandforecasting #pricingtrends

Annual employee turnover rates are trending steeply downwards from ~20% in 2023 to ~15% in 2025 (annualized) “𝗠𝗮𝗻𝗮𝗴𝗶𝗻𝗴 𝗰𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 𝗶𝗻 𝗮 𝗿𝗲𝗰𝗲𝘀𝘀𝗶𝗼𝗻.” This was the theme of a talk given two weeks ago by David Knopping, Founder of Alpine Rewards and former President of Radford. According to David, four key forces tend to play out across the labor market during contractionary times: 1: Bonus payouts come down 2: More conservatism in merit cycle budgets 3: Equity philosophies change and innovate at a faster pace 𝟰: 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗲 𝗮𝘁𝘁𝗿𝗶𝘁𝗶𝗼𝗻–𝗲𝘀𝗽𝗲𝗰𝗶𝗮𝗹𝗹𝘆 𝘃𝗼𝗹𝘂𝗻𝘁𝗮𝗿𝘆–𝘁𝗲𝗻𝗱𝘀 𝘁𝗼 𝗰𝗼𝗺𝗲 𝗱𝗼𝘄𝗻 Today, let’s look at the fourth mentioned force–employee attrition. ________________ 𝗠𝗲𝘁𝗵𝗼𝗱𝗼𝗹𝗼𝗴𝘆: Pave’s data science team performed an employee turnover analysis across 2,708 customers who have been in Pave’s dataset since the beginning of 2023. Note that the employee turnover benchmarks include both voluntary and involuntary attrition. Also note that the 2025 stats are annualized after one quarter’s worth of data. ______________ 𝗥𝗲𝘀𝘂𝗹𝘁𝘀: 📉100-1,001 Employees: 22.4% in '23 to 20.1% in '25  📉1001-3000 Employees: 20.3% in '23 to 15.3% in '25  📉3001+ Employees: 20.8% in '23 to 14.7% in '25 ______________ 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀: 1️⃣ 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗲 𝗮𝘁𝘁𝗿𝗶𝘁𝗶𝗼𝗻 𝗶𝘀 𝗱𝗼𝘄𝗻 𝗮𝗰𝗿𝗼𝘀𝘀 𝘁𝗵𝗲 𝗯𝗼𝗮𝗿𝗱. We unfortunately don’t have a reliable way to break down voluntary vs. involuntary attrition at scale. But across the board, employee turnover rates are lower than they’ve been in years. Here are two hypotheses across involuntary and voluntary. [A] Involuntary attrition: many companies went through a wave of “post ZIRP right-sizing layoffs”, but that wave has mostly cooled off. [B] Voluntary attrition: employees are coming to terms with that fact that it is NOT a hot job market, at least in tech. Companies are generally prioritizing efficiency more so than in the past (e.g. ARR/FTE, Burn Multiple, Free Cash Flow, SBC as a % of Revenue, etc). 2️⃣ 𝗧𝗵𝗲 𝗿𝗲𝗹𝗮𝘁𝗶𝘃𝗲 𝗱𝗿𝗼𝗽 𝗶𝗻 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲 𝗮𝘁𝘁𝗿𝗶𝘁𝗶𝗼𝗻 𝗶𝘀 𝗺𝗼𝘀𝘁 𝗽𝗿𝗼𝗻𝗼𝘂𝗻𝗰𝗲𝗱 𝗮𝘁 𝗹𝗮𝗿𝗴𝗲𝗿 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀. Smaller companies are a touch down (22.4% in 2023 vs. 20.1% in 2025_annualized). Meanwhile, the drop for companies with 3,000+ employees is much larger (20.8% in 2023 vs 14.7% in 2025_annualized). Perhaps employees at larger, often public, companies are content with “the devil you know vs the devil you don’t know”? ______________ 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗮𝗹 𝗦𝘂𝗴𝗴𝗲𝘀𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝗖𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 & 𝗛𝗥 𝗟𝗲𝗮𝗱𝗲𝗿𝘀: What is your company’s 2024 employee turnover rate? What was your company’s Q1 2025 employee turnover rate? And how do these two numbers compare to the relevant benchmarks in this study? Use this to gain an understanding of how your company compares to the market and what (if any) changes you should make to your company's total rewards program design.

What Makes Dmart the King of Indian Retail? When it comes to retail success in India, Dmart stands out as a game-changer. From outperforming its competitors to setting new benchmarks in efficiency, Dmart has completely redefined the retail landscape in India. Its success lies in its unique approach to inventory management and financial discipline. By prioritizing fast-moving products and converting them into private-label items, Dmart maximizes margins and ensures profitability. At the same time, it keeps non-essential and non-moving stock to a minimum, allowing its inventory to rotate much faster than any competitor. This sharp focus on inventory efficiency has enabled Dmart to manage a ₹40,000 crore business with just ₹3,700 crore in working capital—a remarkable feat in the retail industry. Dmart’s industry-leading inventory turnover is another factor that sets it apart. While major players like Reliance Retail, Spencer's’s, and Walmart. India turn their inventory around 6-8 times annually, Dmart achieves an impressive 14x inventory turnover. This efficiency translates to faster cash flow, reduced holding costs, and a leaner operational model, giving it a clear edge over its competitors. Another pillar of Dmart’s strategy is its cash-driven business model. The company pays suppliers within 7-10 days, earning better discounts and strengthening supplier relationships. On the other hand, competitors often take 30-90 days to settle payments, which increases their procurement costs and reduces flexibility. By combining quick inventory turnover with efficient supplier payments, Dmart has crafted a cost-efficient, high-revenue business model that is difficult to replicate. While other retailers grapple with rising operational costs, Dmart has mastered the art of managing low working capital alongside exceptional operational efficiency, cementing its position as a powerhouse in Indian retail. For businesses, Dmart’s strategy offers invaluable lessons: focus on fast-moving products to keep costs low, build strong relationships with suppliers through quick payments, and optimize inventory to maximize turnover and cash flow. What are your thoughts on Dmart’s strategy? Let’s discuss in the comments! #business #entrepreneurship #startup

Most D2C brands celebrate launching new SKUs. Here's what the finance team should account for... New flavour, new variant, new bundle - growth, right? But behind every new SKU is an invisible financial ripple. 1️⃣ Inventory Bloat More SKUs = more stock = slower turnover. A dip from 6x to 4x inventory turns can lock up lakhs in working capital. 2️⃣ Ops Complexity Your warehousing, invoicing, and returns reconciliation will get messier. One mis-coded SKU = wrong GST classification = compliance mismatch. 3️⃣ Forecasting Gets Fuzzy Your sales data is now spread across a bloated catalogue. Low-selling SKUs distort demand signals, making FP&A’s job harder. 4️⃣ Marketplace Penalties Platforms don’t care how many SKUs you have, they care about fulfilment. Stockouts? Delays? You pay. And your listing rank drops. Finance teams often spot the impact after the damage is done. Because SKU creep hides behind "growth." At FAB MAVEN, we’ve started tagging every client SKU by margin band + rotation rate. If it doesn’t move and doesn’t make money, it doesn’t deserve your money. If your SKU list grew, but your profits didn’t, you should quickly call for a finance-led product review.

When did 40%+ voluntary turnover rates become acceptable in sales? Senior leaders at two very large SDR orgs this month shared that their voluntary turnover rates are 40%+ This is a MAJOR problem because: 1) It's expensive to hire and onboard 2) You're not building a bench of future AEs 3) Puts too much pipegen pressure on marketing/AEs From our vantage point at Outbound Squad, here's what we're seeing contributing to high voluntary turnover rates (plus what you can do): ⛔️ 1) Lack of everboarding Enablement invests a TON in building world-class onboarding programs. They're using the slickest tech and the content is great. But the stats don't lie: reps forget 70%+ of what they learn within a month (Gartner). You need to develop a clear learning path to fully ramp reps and keep them around: - Shorten the path to booking their first meeting - Develop 200 and 300-level content (AKA what does mastery look like?) - Enable front-line leaders to reinforce/coach everything - Objective assessment of rep skills Onboarding is the START of the rep journey, not the destination. ⛔️ 2) No promotion path It's not 2022 anymore. SDRs should expect to be in seat for 1-2 years before an AE promotion. You need creative ways to keep them in the organization. Here are some ideas our best clients use to retain top talent: - Belt system: Create tiers of SDRs. SDR 1, SDR 2, SDR 3, etc. Each tier comes with an upgrade in pay, responsibility, career development, and title. - Create an SDR to AE pathway program - Find the SDR a new home elsewhere in the org (enablement, CS, account management, etc) ⛔️ 3) Lack of coaching I can't tell you how many SDR Managers spend ZERO hours every week call coaching. They don't listen to a single cold call. Your reps are spending more than half their time dialing and leaving voicemails. Pro tip: Create a "call coaching" KPI for every manager. You can track this in most sales engagement platforms now. You'll see a big pattern in managers who coach consistently and the results on their team. And don't get me started on the lack of coaching for front-line leaders. Managers must be taught how to run effective 1:1s, team meetings, deliver coaching, etc. ~~~ What has your org found effective to reduce voluntary turnover?

A SaaS client I worked with faced a costly $500,000 annual turnover challenge, with employees leaving within 12 months despite above-market salaries. After revamping their culture—introducing flexible work policies, leadership training, and genuine DEI initiatives—retention rates improved by 40%, saving them nearly $200,000 in the first year alone. When companies talk about cutting costs, the first targets are often employee benefits, team-building activities, or wellness programs. Ironically, these "expenses" are precisely what save businesses money in the long term. Here’s why: 1. Replacing an employee can cost 6–9 months of their annual salary. Add in lost productivity and training time—it’s a significant hit to your budget. 2. Gallup research shows that highly engaged teams are 21% more productive. Employees who feel valued and supported don’t just meet expectations; they exceed them. 3. Toxic cultures breed burnout, absenteeism, and even legal disputes. On the flip side, investing in mental health and leadership training creates a workplace where employees thrive—and that directly reduces operational risks. Culture isn’t just about feeling good—it’s a business decision that pays off. SIMPLE.

Sales turnover is extremely expensive (here's 3 ways to stop it). It costs 2.5x the annual salary of a sales rep to replace them. Yet, most companies keep making the same mistake… Every time this happens they blame the wrong thing. It’s not a hiring problem. It’s a leadership problem. Here’s how to stop the turnover cycle today:  1.  Ditch the one-size-fits-all coaching. - Reps aren’t carbon copies. Stop treating them like they are. - Some struggle with prospecting, others with closing. - Customize coaching to their actual skill gaps. 2. Stop promoting top reps without training. - Being a great seller doesn’t mean you know how to lead.   - Provide new managers with real leadership training.   - Teach them how to coach, not just track numbers.  3. Build a culture that retains top talent. - Ask your reps: Do you feel valued here?   - Ask yourself: Do they have a clear path to growth?   - Are they getting real development—or just more pressure?  Turnover isn’t just “part of the game.” It’s a symptom of a broken system. People don’t leave jobs. They leave bad leadership. And until you fix leadership, you’ll keep watching great talent walk out the door.  PS. What’s the biggest reason sales reps leave in your experience?