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What is sell-through rate and how is it calculated in retail?
Sell-through rate is the percentage of the stock you received during a period that you actually sold in that period. Divide units sold by units received (or by opening stock plus receipts), then multiply by 100. Selling 70 of 100 units gives 70 percent.
Formula in words: units sold divided by units available to sell, over the same period, expressed as a percentage.
It matters most for seasonal and fashion lines, where unsold stock must be marked down. A low figure early in a season is an early warning, and a very high figure may mean you under-bought.
Commonly misread:
- Mixing the denominator definition between products, so figures cannot be compared.
- Judging by the figure alone without the time elapsed since the stock arrived.
- Treating a high sell-through as always good, when it may mean lost sales from stock-outs.
Pick one denominator definition and keep it fixed.
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