SellThroughRate

SellthroughRate is a metric used in retail and e-commerce to quantify how quickly available stock is sold over a defined period. It is typically expressed as a percentage and provides a snapshot of demand relative to inventory.

Calculation and variants: A common definition is SellthroughRate = (Units Sold / Units Available for Sale) × 100. Units Available for Sale is usually beginning inventory plus stock received during the period. Some analyses use Units Sold divided by Beginning Inventory only, or by Beginning Inventory plus Receipts minus End Inventory, depending on data systems and the intended insight. Clear documentation of the chosen method is important for comparability.

Uses and interpretation: SellthroughRate helps assess product performance, guide replenishment, inform markdown decisions, and support inventory planning. A high sell-through rate indicates strong demand and efficient turnover, while a low rate can signal excess stock, weak demand, or suboptimal pricing. It is widely used at product, category, store, or channel levels to compare performance and forecast future stock needs.

Limitations: The metric can be distorted by timing (period length), stockouts, promotions, and channel mix. Different product categories naturally turnover at different rates, so cross-category comparisons should consider margins and lifecycle stage. It is most informative when tracked over time and alongside related metrics such as inventory turnover, gross margin, and sell-in data.

Example: Beginning inventory 500 units, receipts 200, sold 450 in the period. Units Available for Sale = 700. SellthroughRate = (450/700) × 100 = 64.3%. End inventory would be 250 units in this scenario.