Stop Counting Units — Count Days
Most sellers obsess over total units sold. That's vanity. The real metric is days inventory outstanding (DIO) — how long capital sits in inventory before it converts to cash.
Key Metrics to Track
1. Days Inventory Outstanding (DIO)
Formula: (Average Inventory Value / Cost of Goods Sold) × Days in Period
Target: 7-14 days for electronics wholesale. Every day below 10 is competitive advantage.
2. Inventory Turnover Ratio
Formula: COGS / Average Inventory Value
Target: 26-52 annual turns (meaning inventory cycles 2-4x per month).
3. Cash Conversion Cycle
Formula: DIO + DSO (days to collect payment) - DPO (days to pay suppliers)
Target: -5 to +15 days. Negative means suppliers finance your growth.
Seller A earns 4x more than Seller C on identical capital and margins. The only difference: inventory velocity.
Why This Matters
Two sellers with identical margins can have wildly different profitability:
How to Improve Your Metrics
The Bottom Line
Capital velocity beats margin percentage every time. A 20% margin with fast turns beats 35% margin with slow turns.
Have questions about your sourcing strategy?
Reach out to the Gefyra team. We're here to help with wholesaling guidance, logistics optimization, and Amazon seller support.
Get in touch