Sell-through rate

Sell-through rate measures how much of the inventory a retailer received or had on hand actually moved to customers in a given window, rather than sitting on shelves. It is a per-product or per-category view of demand versus supply, distinct from total sales volume, which says nothing about how much stock was tied up to generate those sales.

The formula is units sold / units available (received or on-hand at period start) × 100. A sell-through rate near 100% suggests demand roughly matched supply; a low rate signals overstocking or weak demand, while a rate well above 100% (when measured against opening stock rather than total received) can indicate a stockout risk. It is commonly tracked weekly by SKU, style, or store, and compared against a target set by category or season.

Buyers and merchandisers use sell-through rate to decide when to reorder, when to trigger a markdown optimization action on slow movers, and to evaluate whether a planogram placement is earning its shelf space. It differs from inventory turnover, which measures how many times stock cycles over a longer period across the whole business rather than the fate of a specific batch. A common pitfall is comparing sell-through rates across products with very different days of supply targets without adjusting for the intended selling window.