Definition
Inventory turn
Inventory turn is how many times a dealer sells through and replaces its entire inventory over a period, a core measure of how healthy sales velocity is.
A lot that turns its inventory more times a year is putting the same capital to work more often. Slow turn means cash and floor-plan credit are stuck in cars that are not selling.
Marketing is one of the few levers that lifts turn without touching price or acquisition. Keeping every vehicle well merchandised and in front of buyers shortens the average days on lot, and shorter days on lot is faster turn.
Related terms
- Days on lotDays on lot (DOL) is the number of days a specific vehicle has been in a dealer's inventory, from acquisition to sale.
- Floor planA floor plan is a revolving line of credit dealers use to finance their inventory, paying interest or fees for each vehicle for as long as it stays unsold.
- Inventory agingInventory aging is how long a vehicle has sat unsold on a dealer's lot, usually measured in days since it was acquired or first listed.
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