Inventory turn is the most underused metric in indie jewelry. Most founders we meet either don't track it or track it wrong. Many of the ones who do quietly suspect theirs is "low" without knowing what good looks like. Let's set some honest benchmarks and then talk about what they mean.
Definitions, So We're Speaking the Same Language
Inventory turn (or "inventory turnover") is the number of times you sell through your average inventory in a year. The formula:
Inventory turn = COGS / Average inventory at cost
If you sold $400K worth of jewelry at cost over the year and your average on-hand inventory at cost was $200K, your turn was 2.0×. Note: at cost, not at retail. The single most common mistake is mixing the two.
Realistic Benchmarks by Category
From our work with roughly 80 indie brands across the U.S. and Canada, here's what we see:
| Category | Healthy turn (annual) | What "great" looks like |
|---|---|---|
| Fashion / demi-fine | 4–8× | 10×+ |
| Fine — DTC focus | 1.5–3× | 4× |
| Fine — multi-brand retail | 2–4× | 5×+ |
| Bridal (showroom-led) | 0.8–1.5× | 2× |
| One-of-one / bespoke | 0.5–1.2× | 1.5× |
A fashion-jewelry brand turning at 1.0× is in trouble. A bespoke fine-jewelry brand turning at 1.0× is actually doing fine. Context is everything; the same number means opposite things in different categories.
Why Turn Matters More Than You Think
Inventory ties up cash. Every dollar sitting in inventory is a dollar that isn't paying your rent, your team, or your marketing budget. The brands that grow fastest are not always the brands with the best margins — they are very often the brands with the highest turn, because they can recycle the same dollar of working capital five times in a year instead of two.
Concrete example. Two brands at $1M revenue, both at 50% gross margin (so $500K COGS each):
- Brand A: turn = 4×. Average inventory at cost = $125K. Cash tied up: $125K.
- Brand B: turn = 1.5×. Average inventory at cost = $333K. Cash tied up: $333K.
Brand A has $208K of free cash to deploy on marketing, hiring, or new collections that Brand B does not. They are the same revenue, but they are not the same business.
Why Most Indie Brands Have Turn Lower Than They Think
Three culprits, in roughly this order of frequency:
- Old inventory that should have been marked down two years ago. Every jewelry case has it: the styles that didn't sell, sitting in the back, slowly aging. They count as inventory on the balance sheet but contribute zero to COGS. They drag turn down without anyone noticing.
- Over-buying for trade shows or trunk shows. Founders order ahead optimistically. The bestsellers sell through; the rest become permanent residents.
- Custom-order leftover stock. Bespoke shops accumulate small amounts of leftover gold sheet, odd-size stones, partial findings. Individually small. Cumulatively material.
How to Diagnose Your Own Turn
Pull two numbers from your accounting system:
- Total COGS for the trailing 12 months.
- Average ending-month inventory value at cost across those 12 months. Sum the 12 month-end balances and divide by 12.
Divide #1 by #2. That's your turn. Compare against the table above for your category.
If you're below the healthy band, run the next-level diagnosis: what percentage of your inventory was purchased more than 18 months ago and hasn't moved? In healthy brands, this is under 10%. In struggling ones, it's 25–40%. That's where your locked cash is hiding.
What To Do This Week
Calculate your turn. Then identify the 20 SKUs that have been in inventory the longest without selling. Mark them down 40% and run a one-week clearance. Whatever doesn't sell at 40% off, mark down 60% the following week. Whatever still doesn't sell, melt or part out.
You will recover working capital, you will free shelf space for new product, and you will permanently lower your average inventory — which mechanically raises your turn. Most brands can move turn up 20–30% in a single quarter just by doing this once. It's the highest-leverage inventory action available to you.