how to check if you have to much inventory
Calculate inventory turnover rate. First, calculate your inventory turnover rate. To do this, divide Costs of Goods Sold (COGS) by the average cost of your inventory on hand. If you finished year-end inventory last month, you should have your COGS on hand.This article explains how to calculate COGS.For example: Consider an Amazon third party merchant whose Costs of Goods Sold was $50,000 the first year and kept $5,000 worth of inventory on hand on average.f you finished year-end inventory last month, you should have your COGS on hand. This article explains how to calculate COGS. For example: Consider an Amazon third party merchant whose Costs of Goods Sold was $50,000 the first year and kept $5,000 worth of inventory on hand on average.