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KPI for Sell-Through % posted in category Sales

WinningKPI - Sales - KPI for Sell-Through % posted in category Sales Oana Boteanu Details:
Sell-Thru (Sell through) % helps companies to measure the velocity of which the inventory is being sold over a given time period. The KPI is measured by divided the number of units sold in the time period (usually one month) by the BOM (beginning of month inventory).
Companies can use promotions and special advertising campaigns to maximise their Sell-Thru %.
Keeping Sell-Thru% as a KPI helps to plan and monitor the performance of these campaigns.

Formula:
Number of units sold/BOM inventory x100


KPI Units: %

KPI Time Frame: update once a month

Posted by Oana Boteanu | Help to protect community: Flag for moderation

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Here are comments:

KPI Expert Sell-Thru % is also very useful to compare individual product performance. A supermarket could use this to compare two similar products and decide which one sale faster and brings the most profits.
For example, if two brands of Olive Oil are to be compared on a monthly sales rate, brand A and brand B:

January:
Brand A: BOM = 500
300 Bottles sold by January 30th
Sell-Thru % : 300/500 x 100, Sell-Thru = 60%

Brand B: BOM=380
350 Bottles sold by January 30th
Sell-Thru %: 350/380 x 100, Sell-Thru = 92%

The retail manager may choose to compare these results over 3-4 months period. One month is not a very accurate comparison, as many external factors can influence the Sell-Thru %, for instance January can be a period of low sales after the Christmas Holiday.
If one Brand maintains a low %, the retail manager may try to negotiate a better deal with the supplier in order to lower the price or create promotions. Otherwise, if the sales rate affects the profit, the retailer may choose to stop selling the product.

Oana Boteanu | + | September 6, 2012 at 7:25 am

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