Sell-through rate is the percentage of the stock received in a period that was sold within that period, calculated as units sold ÷ units received × 100.
Sell-through rate
Also called sell-through, sell-through percentage, STR ·
Sell-through rate tells you what share of the stock you brought in actually sold. Receive 100 units, sell 70 of them in the month, and your sell-through rate is 70%. It is the clearest way to judge a buying decision after the fact: did you order the right amount of the right thing, or is some of it going to sit on the shelf?
The sell-through rate formula
Sell-through is normally measured in units and over a fixed window — often 30 days after a delivery, or a whole season for fashion. A short window suits fast-moving goods; a long one suits items people buy occasionally.
A worked example
A clothing boutique takes delivery of its autumn accessories on 1 September and checks sales on 30 September:
| Item | Units received | Units sold | Sell-through rate |
|---|---|---|---|
| Wool hats | 60 | 51 | 85% |
| Scarves | 120 | 78 | 65% |
| Leather gloves | 80 | 20 | 25% |
Hats sold 51 ÷ 60 = 85% in a month, and may run out before the season does — a candidate for a reorder. Scarves at 65% are on track. Gloves at 25% are the problem: 60 pairs are left, and unless something changes, many of them will still be there when the season ends. If the boutique also had 20 scarves left from last year, the variant formula gives 78 ÷ (20 + 120) = 55.7%. The calculation is the same for any product and any currency.
Why sell-through matters for a small business
Small shops buy with limited cash, so each order is a bet. Sell-through tells you which bets paid off while there is still time to act: reorder the items selling fast, move or promote the slow ones, and stop buying what does not sell. Without it, the first sign of a bad order is usually a back room full of dead stock at the end of the season.
It is useful well beyond fashion. A café can check sell-through on baked goods each day to fine-tune how many it orders; a salon can check it on retail products to decide which brands deserve shelf space; a shop can compare new suppliers on how quickly their stock moves.
How to read the number
- Very high sell-through is not automatically good. If an item sold out in a week, you probably lost sales after it ran out; a higher order quantity or reorder point may be needed.
- Very low sell-through means too much stock for the demand at that price, or the item is in the wrong place, or it is the wrong product.
- Compare like with like. A staple you restock weekly and a seasonal item bought once should not be held to the same target.
Common mistakes
- Comparing different windows. A 30-day rate and a 90-day rate are not comparable; fix the window.
- Ignoring stockouts. A 100% rate hides the sales you missed once the shelf was empty.
- Counting returns as sales. Subtract returned units from units sold.
- Buying sell-through with discounts. Clearing stock at a deep discount raises the rate but lowers the gross profit margin; look at both together.
How it relates to other terms
Low sell-through is the early warning for dead stock. High sell-through on a staple tells you to revisit its reorder point and safety stock. And sell-through only means something alongside margin: an item that sells through at a loss is not a success.
Questions
- How do you calculate sell-through rate?
- Divide the number of units sold in a period by the number of units received in that period and multiply by 100. Receiving 120 units and selling 78 of them gives a sell-through rate of 65%.
- What is a good sell-through rate?
- A good sell-through rate depends on the product and the time window; a weekly-restocked staple and a once-a-season fashion item need different targets. Track the rate for each item over the same window and compare it with your own history rather than a general benchmark.
- Is a 100% sell-through rate good?
- Not always. A 100% sell-through rate means everything sold, but it often means the item ran out early and customers left without buying, so ordering more may have earned more.
- What is the difference between sell-through rate and inventory turnover?
- Sell-through rate measures the share of received stock sold in a set window, usually in units. Inventory turnover measures how many times the average inventory is sold and replaced over a longer period, usually as cost of goods sold divided by average inventory value.
Keep reading
- GlossaryDead stockDead stock is inventory that has stopped selling and ties up your cash. How to measure it, a worked example, what causes it and how to clear it.
- GlossaryReorder point (ROP)A reorder point is the stock level that tells you to order again before you run out. See the formula, a worked example and the mistakes that cause stockouts.
- FeatureInventoryFree, browser-based inventory software: stock that drops with every sale, adjustments with a reason, low-stock alerts and suggested reorder quantities.
- FeatureSales & InsightsTrack every sale and see your day live: takings vs a usual day, best sellers, busiest hours, profit after expenses and plain-language findings. Free.
- GuideHow to track inventory for a small businessTrack inventory by recording every stock movement with a reason, counting on a schedule, and reordering at a calculated reorder point. Worked examples inside.
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