![]() Why sell-through rate is important in inventory management ![]() In this example, the sell-through rate for scented candles last month was 75% - which is a good sell-through rate, indicating that you’re likely to have sold all of that ‘batch’ of scented candles in the first 1 or 2 weeks of this month. In the same month sales for that product were 75 unitsĬalculation is therefore: (75 / 100) x 100 = 75% Last month your business received 100 x scented candles If you are using software, sell-through rates are shown automatically for each product line. This can be done manually or by using specialized inventory management software. ![]() To maintain quality inventory, it is normal to calculate sell-through rate across your product range every month. How to calculate STR Sell-through rate (as a %) = number of units sold ÷ the number received x 100 Having a good understanding of your sell-through rate is essential to having control over your stock levels. Sell-through rates also indicate the efficiency of the product turnover, helping to avoid unnecessary costs such as long periods of storage and being forced to discount prices to increase sales. ![]() To enable you to forecast purchasing requirements and to gauge the effectiveness of your inventory management processes.Īs an e-commerce fulfillment store, you will use sell-through rates to calculate how quickly a product sells, enabling the stock investment to be converted into revenue. It is a calculation used to work out which products are selling as well as you’d hope. Sell-through rate (STR) is the amount of inventory sold in relation to the amount of inventory you have received, in a given period of time. Having old, dead stock in your warehouse ties up your cash in inventory meaning you will struggle to grow your business What is sell-through rate? ![]()
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