Frequently Asked Questions
Why is sell through important?
Sell through rate is a great benchmark for the effectiveness of the merchandise you purchase from your manufacturers or suppliers. This metric helps you determine how well (or how quickly) products are selling, and with this knowledge, you can make smarter purchasing decisions. Paying attention to sell through rate also supports better inventory management, as it ensures you carry enough stock to meet demand, but not so much that you have excess inventory.
What is a good sell through rate?
A good sell through rate will vary by company on a case-by-case basis, but generally speaking, anything above 80% is excellent while anything below 40% is a bit concerning. With that said, a rate that falls somewhere between 40% and 80% should be fine, though there are ample opportunities to improve these numbers and set your company apart from its competitors.
How do you increase sell through rate?
You can increase sales and your sell through rate by launching markdowns or special pricing to move deadstock (and make space for fresh inventory), or ordering less inventory to begin with. For example, rather than purchasing on gut instinct, you can spend time researching different types of products and forecasting demand before you submit your final purchase order.