sellthrough

Sellthrough is a retail and wholesale metric that measures how quickly inventory is sold to end customers within a given period. It is commonly expressed as a percentage and can be calculated as units sold divided by units available for sale (beginning inventory plus replenishments) during the period. The basic formula is: sell-through rate = (units sold / units available for sale) × 100.

In practice, sellthrough helps retailers and brands assess product performance, plan replenishment, and make markdown or assortment decisions. It can be tracked at various levels, including by SKU, category, store, channel, or time period. A high sellthrough rate indicates strong demand and efficient stock turnover, while a low rate suggests slower moving inventory or excess stock.

Example: If 500 units of a product are available for a month and 350 are sold, the month’s sellthrough is 350/500 = 70%. This can signal whether to restock quickly, hold, or discount to clear remaining stock. Sellthrough data is often used alongside other metrics such as gross margin, inventory turnover, and forecast accuracy to optimize merchandising.

Factors that influence sellthrough include price promotions, seasonality, product novelty, stockouts, and mix of SKUs. It is distinct from sell-in (goods shipped from supplier to retailer) and sell-out (goods sold to end customers) in common practice; sellthrough focuses on the rate of inventory conversion into sales, derived from consumer demand data and stock on hand.