What is Sell-Through?
A term used in fashion retail
Sell through it the term used most commonly in fashion retail as a measure for indicating the performance of an item. It looks at both inventory levels and sales numbers.
The calculation is:
Examples:
Essentially, the higher the value the better the performance of the item.
When and where to use Sell-Through
It is most useful to compare items sell-through over the same period. Most buyers would set their own sell-through percentage for a particular category or department, and then use this to evaluate performance.
The calculation is:
Sell Through = Items Sold / (Items on-Hand + Items Sold)
Examples:
- If a retailer has sold 30 units in the last month and has 8 units on-Hand the sell through is 30 / (8 + 30) = 79%
- On the other hand if a retailer has sold just 14 units in the last month and has 24 units on-Hand, the sell through is 14 / (24 + 14) = 37%
Essentially, the higher the value the better the performance of the item.
- High values mean good quality forecasting.
- Low values mean too high inventory or lower than planned sales.
When and where to use Sell-Through
It is most useful to compare items sell-through over the same period. Most buyers would set their own sell-through percentage for a particular category or department, and then use this to evaluate performance.
