Sell-Through Rate Thinking in eCommerce

Updated on Reading Time: 1 minute
Sell-Through Rate Inventory

At a Glance

The standard sell-through rate is easy to calculate, but the result can be nuanced if not applied with care and understanding, and if not paired with other inventory metrics. While not a perfect or holistic measurement, learn one of the best applications for the sell-through rate in eCommerce businesses.

I have a love-hate relationship with the inventory-centric sell-through rate (STR) calculation. In case you need a refresher, STR is units sold / units received. If you sell 10 units of 100 units received, the STR is 10%. Is that good or is this bad?

The answer is, “It depends.” What’s the STR time period? A month? Two? More? How does this STR compare to similar products over a similar time period?

I’m writing this article for several reasons:

  1. First, I want to address the nuance related to time periods. That is, what should be included in the denominator in terms of weeks or months, and why does that matter?
  2. Most articles explain the STR math, but rarely question the limitations of STR as I will.
  3. Finally, despite STR’s limitations, I want to share my favorite use case for this metric.

G3VIP

To read the rest of the article, you need to log in as a G3VIP.

Mark Gandy

Mark is one of the pioneers in the CFO and Controllership professional services industry having launched his practice in 2001. Today, he teaches CEOs and CFOs critical financial leadership and management concepts so that they can continue to grow and prosper in times of adversity, transition, and renewal. He is also the host of the CFO Bookshelf podcast.

Similar Posts