Slow-Moving Inventory

Last Updated: Jun 7, 2019

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SKU’s that have not shipped in a certain amount of time and have very low inventory turnover ratios (or high inventory days). The timeframe that defines slow-moving inventory varies for each seller, but slow-moving inventory will always have high associated carrying costs and will tie up valuable capital/resources that could otherwise be reinvested in the seller’s business. Lenders will often determine this as inventory with SKUs that (a) is on hand for more than 365 days or (b) is over 52 weeks of supply and/or no sales in the prior 12-month period.