Sell-Through Rate Calculator
Your Sell-Through Rate
0%
What is Sell-Through Rate?
The Sell-Through Rate (STR) is a vital retail metric that compares the amount of inventory a retailer receives from a manufacturer or supplier against the amount that is actually sold to customers within a specific period (usually a month). It is expressed as a percentage and helps businesses understand how efficiently they are moving their stock.
The Sell-Through Rate Formula
Calculating your sell-through rate is straightforward. The mathematical formula is:
Sell-Through Rate = (Units Sold / Beginning Inventory) x 100
Practical Examples
To better understand how this works in a real-world scenario, consider these two examples:
- Example A: A boutique receives 200 summer dresses. By the end of the month, they have sold 160 of them.
Calculation: (160 / 200) x 100 = 80% Sell-Through. - Example B: An electronics store stocks 1,000 units of a new smartphone. After 30 days, they have sold 250 units.
Calculation: (250 / 1,000) x 100 = 25% Sell-Through.
What is a "Good" Sell-Through Rate?
While "good" varies by industry, here is a general benchmark for monthly performance:
| STR Percentage | Status | Action Required |
|---|---|---|
| Over 80% | Excellent | Likely under-stocked; consider ordering more units immediately. |
| 40% – 80% | Healthy | Steady movement. Monitor trends and maintain current levels. |
| Under 20% | Poor | Over-stocked or low demand. Consider discounts or marketing promotions. |
Why Monitoring STR is Critical for Your Business
High inventory levels tie up cash flow and incur storage costs. By monitoring your sell-through rate, you can:
- Optimize Cash Flow: Identify slow-moving items and clear them out to reinvest in high-performers.
- Negotiate with Suppliers: Use high STR data to negotiate better pricing or priority shipping for fast-moving goods.
- Improve Merchandising: If a product has a low STR, it may need better placement in the store or more aggressive digital marketing.