function calculateSellThroughRate() {
// Get input values
var soldInput = document.getElementById('unitsSold');
var inventoryInput = document.getElementById('beginningInventory');
var resultBox = document.getElementById('resultOutput');
var percentageDisplay = document.getElementById('strPercentage');
var analysisDisplay = document.getElementById('strAnalysis');
// Parse values
var sold = parseFloat(soldInput.value);
var inventory = parseFloat(inventoryInput.value);
// Validation
if (isNaN(sold) || isNaN(inventory)) {
alert("Please enter valid numbers for both units sold and beginning inventory.");
return;
}
if (inventory <= 0) {
alert("Beginning inventory must be greater than zero.");
return;
}
if (sold 80) {
analysisText = "Excellent: You are selling inventory very quickly. Be careful of stockouts and consider reordering soon.";
} else if (sellThroughRate >= 40 && sellThroughRate <= 80) {
analysisText = "Healthy: Your inventory turnover is balanced. You are moving stock efficiently without running out too fast.";
} else {
analysisText = "Low: Sales are slow relative to your stock levels. You may be overstocked or need to adjust pricing/marketing.";
}
// Edge case: Sold more than inventory (Backorders/Restocking mid-period)
if (sold > inventory) {
analysisText = "Note: Your STR is over 100%. This implies you sold more than your starting inventory, likely due to restocking during the period.";
}
analysisDisplay.innerHTML = analysisText;
}
What is Sell Through Rate (STR)?
Sell Through Rate (STR) is a critical retail Key Performance Indicator (KPI) that measures the percentage of inventory sold within a specific time period relative to the amount of inventory received. It helps retailers, wholesalers, and e-commerce business owners understand how efficiently they are moving their stock.
A high sell-through rate indicates that merchandise is popular and selling quickly, while a low rate suggests that products are sitting on the shelves (or in the warehouse) longer than anticipated, tying up capital in slow-moving assets.
How to Calculate Sell Through Rate
The calculation for Sell Through Rate is straightforward. It compares the number of units sold against the total inventory available at the beginning of the period.
The Formula
STR % = (Units Sold / Beginning Inventory) × 100
Where:
Units Sold: The total quantity of items sold during the specific timeframe (e.g., one month).
Beginning Inventory: The total quantity of items you had in stock at the start of that period (or total stock received for a specific batch).
Example Calculation
Let's say you run an online shoe store. You purchased a batch of 500 pairs of running shoes at the beginning of the month. By the end of the month, you have sold 350 pairs.
Beginning Inventory: 500 units
Units Sold: 350 units
Using the calculator above or the formula:
(350 / 500) × 100 = 0.70 × 100 = 70%
A 70% sell-through rate is generally considered very healthy in most retail sectors, indicating strong demand without immediate risk of running out of stock too early.
Why is Sell Through Rate Important?
Monitoring your STR allows you to make data-driven decisions regarding your supply chain and marketing strategies:
Cash Flow Management: Inventory is cash tied up in goods. Higher STR means you are converting goods back into cash faster.
Identify Best Sellers: Determine which products are popular so you can reorder them promptly.
Reduce Storage Costs: Slow-moving inventory takes up valuable shelf or warehouse space. Low STR warns you to discount items to clear space.
Evaluate Pricing: A consistently low STR might indicate your pricing strategy is too high for the market.
What is a Good Sell Through Rate?
While "good" varies by industry (e.g., fast fashion vs. luxury furniture), general benchmarks are:
Low (Under 40%): Indicates overstocking. You may need to run promotions or discounts.
Average (40% – 80%): A healthy balance. You have enough stock to meet demand but aren't holding it too long.
High (Over 80%): Indicates high demand. While good, you risk stockouts and missed sales opportunities if you don't restock immediately.