These are guide ranges, not rules. Your category, stage, market and timing will move them, so use them to work out where to look, not to mark yourself pass or fail.
| Metric | Benchmark | Notes |
|---|---|---|
| Inventory turnover | 4-6x a year for most; 6-8x for replenishment-heavy brands | Annual COGS divided by average inventory value. Below 4x usually means too much stock; above 8x you may be understocking. |
| Days inventory on hand by category | Subscription consumables 30-60, food and bev 60-100, beauty 90-140, apparel 110-180, hard goods 120-200 | Wildly category-dependent. The slower verticals imply turnover below the 4-6x target, and those are category norms, not aspirations. |
| Days inventory outstanding | 60-120 days for most DTC brands | The largest part of the cash cycle. Shopify and Stripe settle in 1-3 days, so inventory and supplier terms decide the rest. |
| Cash conversion cycle | Under 60 days | CCC = days inventory outstanding + days sales outstanding - days payable outstanding. The true cash exposure window is often 3-6 months, because the formula only starts once stock reaches your warehouse. |
| Inventory as a share of revenue | Many brands sit at 20-30%; Quad Lock kept it under 15% | Pipeline, on-hand and safety stock combined. Quad Lock tied up just 8-13% of revenue with very few stock-outs, but a low-SKU durable brand can run leaner than most, so plan off your own structural ratio. |
| In-stock rate | 95%+ on A-items; about 90% across the catalogue | C-items can run leaner, and an 80-85% in-stock target is fine for them. |
| Supplier terms | Net 30+ by your fifth order | Move from 30/70 deposits to graduated terms, such as 30% deposit, 30% on shipment and 40% Net 30. |
| Cash runway | 90+ days | Keep any single purchase order under 30% of available cash, and run a 13-week rolling cash forecast every week. |
| Inventory financing cost | Under 15% annualised; inventory financing runs 8-20% | Revenue-based financing runs 20-40% effective annualised, so match the capital to the job: supplier terms and financing for repeatable cycles, equity only for genuine bets. |
| Supplier lead times | If the supplier says 30 days, plan for 60 | Reality usually runs 30-50 days. Ignoring lead-time variability is one of the most common inventory mistakes. |
How to use these benchmarks
These ranges are guides, not guarantees or rules. They are drawn from The DTC Playbook and Rob Ward's experience taking Quad Lock from $0 to a $500M exit, cross-checked against widely cited DTC data. The point is not the exact number - it is whether you sit well above or below it, and what to do about the gap. Your category, stage, market and timing all move them, so judge yourself against your own trend as well.
Last reviewed: October 2026. Benchmarks are refreshed as the playbook is updated.
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