Is the inventory turnover period of Amazon FBA as little as possible?

What is the role of Amazon’s FBA inventory turnover period? 

In Amazon, the smaller the inventory turnover period is, the higher the inventory turnover rate is, and the lower the average inventory quantity is. But because the inventory is too little to meet the needs of the flow, so the inventory turnover days can not be less, the better.However, it does not mean that the longer the inventory turnover days, the better, because too much inventory will occupy funds, resulting in resource consumption. The inventory level of an enterprise is optimal under the corresponding production and operation conditions. Inventory turnover and accounts receivable turnover closely combined, minus accounts payable turnover is a key index value of the enterprise cash turnover cycle time.

Inventory turnover days refer to the average number of days (mean occupation time) required for an inventory turnover from entry to write-off in an accounting year. The less inventory turnover days, the better.The higher the inventory turnover, the less the turnover days;The lower the inventory turnover, the longer the turnover days.Inventory turn-over is the average number of times the inventory turns over from entry to write-off period in an accounting year.The higher the inventory turnover, the better.

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Inventory turnover analysis index value is an index value that can reflect the professional operation ability of an enterprise. It can be used to evaluate the inventory management level of an enterprise and also to consider the professional ability of inventory turnover of an enterprise. If the inventory is marketable and the professional ability is strong, the turnover times are more and the turnover days are short;On the contrary, if the accumulation of goods, turn the ability is poor, the number of turnover is less, the number of days of turnover is long.Increasing the inventory turnover rate and reducing the operating cycle time can improve the profitability of enterprises.

Inventory turnover reflects the level of inventory management.The higher the inventory turnover, the lower the inventory occupancy, the stronger the liquidity, and the faster the inventory can be converted into cash or accounts receivable. This not only interferes with the short-term solvency of enterprises, but also is the key content of integrated management of enterprises.

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Post time: Jun-09-2021