What's a healthy days inventory outstanding for e-commerce & dtc?
Short answer
For e-commerce & dtc, a healthy days inventory outstanding is around 60–90. Operators in e-commerce & dtc outside this range typically have a working-capital drag that gets worse as they scale.
Real peer data
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Formula
DIO = (Inventory / COGS) × 365
Take inventory on hand, divide by annual cost of goods sold, multiply by 365.
Why days inventory outstanding matters for e-commerce & dtc
Inventory is dead cash. High DIO means you're carrying product that's not turning. It also creates write-down risk if anything goes stale, out-of-fashion, or obsolete.
Operators in e-commerce & dtc are especially sensitive to days inventory outstanding because tied-up cash directly limits your ability to reinvest, take on inventory, or hire. It's the metric that quietly caps growth.
People also ask
Common questions about days inventory outstanding for e-commerce & dtc
What is a good days inventory outstanding for e-commerce & dtc?+
For e-commerce & dtc, a healthy days inventory outstanding is around 60–90. The exact number depends on scale, region, and business model, but this is the range most banks, acquirers, and industry consultants treat as "healthy."
How is Days Inventory Outstanding calculated?+
Take inventory on hand, divide by annual cost of goods sold, multiply by 365.
Why does days inventory outstanding matter more for e-commerce & dtc?+
Above this range, cash is tied up in receivables or inventory that isn't turning into revenue quickly enough to fund the next cycle.
What's the fastest way to improve my days inventory outstanding?+
Run your numbers through CFO Grade — the free memo pinpoints the two or three levers that move days inventory outstanding fastest for a business your size, in your industry. Common fixes for e-commerce & dtc include moving to net-15 collections, tightening reorder cycles, or eliminating dead SKUs..
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