What is Sell-Through Rate?
Sell-through rate measures the percentage of inventory sold compared to what was available. If you received 100 units and sold 75, your sell-through is 75%. It shows how well products are moving.
Sell-through is typically measured over a specific time period (weekly, monthly) to track product velocity and identify slow movers early.
Why Sell-Through Rate Matters
High sell-through indicates strong demand and good inventory planning. Low sell-through means you're sitting on products that aren't moving, tying up cash and risking obsolescence or markdowns.
Tracking sell-through by product helps identify winners to reorder and losers to discount or discontinue.
Using Sell-Through Rate
Set sell-through targets by product category. Fashion items should sell through faster than basics. Monitor weekly to catch problems early. Low sell-through products may need better merchandising, promotion, or markdown.
Formula
Sell-Through Rate = Units Sold ÷ Units Received × 100
Can also use: Units Sold ÷ (Units Sold + Units On Hand) × 100
Example
Monthly product performance:
- Units received: 500
- Units sold: 350
- Units remaining: 150
Sell-Through Rate = 350 ÷ 500 × 100 = 70%
70% of inventory sold in one month is strong for most retail. The remaining 30% may need markdown or different placement.