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Definition – What is sell-through rate?
Sell-Through Rate is a measurement of how much inventory is sold in a period of time. It is typically measured over a month, quarter, or year.
A sell-through rate of 100% over a month means that the entire inventory is sold over 30 days. A sell-through rate of more than 100% means that more than the value of inventory is sold each month.
Formula – How to calculate sell-through rate
Sell-Through Rate = Units Sold / Inventory at the Begining of the Period x 100%
Example
A business starts the period with 40 units in stock. They sell 300 units during the period.
Sell-Through Rate = (300 / 40) x 100% = 7.5 x 100% = 750%
Therefore, this businesses’ sell-through rate is 750%.
Sources and more resources
- Wikipedia – Sell-through – A very short article on sell-through.
- The Balance Small Business – Learn what a sell-through rate in retail is – A description of sell-through rate including a comparison of sell-through and inventory turnover.