Sell-through rate is the share of what you had available that sold in a period: sell-through = units sold ÷ (units on hand at the start + units received) × 100. Bring 60 candles to a holiday market, sell 48, and the sell-through is 80%. It's the number that says which products to make more of, which shop to restock, and which design to stop making, because it compares what sold with what was there to sell. Below is the formula, a candle maker's holiday season by product and by place, what a good rate looks like, how it differs from turnover, and a free calculator.
The short version
- Sell-through = sold ÷ (on hand at the start + received), over the same period.
- Work it out by product, and by place: each market, shop and channel.
- High sell-through: make more, or you're leaving sales on the table.
- Low sell-through: make fewer, move them somewhere they sell, or stop.
- Compare like with like: the same period, the same kind of product.
- TaroStack records what each customer bought and what's at each site, so sales and stock are in one place. More below.
The formula
Sell-through rate = units sold ÷ units available × 100
Units available = on hand at the start of the period + units received during it
The period is whatever you're judging: one market day, a month at a shop, a holiday season online. Count in units, not money, so a price change doesn't hide a slow seller. For a consignment shop, units received are what you delivered; for a market, what you brought.
An example: a candle maker's holiday season
Lehua Glow, a made-up candle maker on Oʻahu I use in these examples, looks at its holiday season by product and place:
| Product | Where | Available | Sold | Left | Sell-through | Verdict |
|---|---|---|---|---|---|---|
| Plumeria candle, 9 oz | Holiday market | 60 | 48 | 12 | 80% | Fast |
| Pikake candle, 9 oz | Holiday market | 40 | 18 | 22 | 45% | Steady |
| Plumeria travel tin | Holiday market | 72 | 61 | 11 | 85% | Fast |
| Plumeria candle, 9 oz | Gift shop, Kailua | 30 | 25 | 5 | 83% | Fast |
| Coconut lime candle, 9 oz | Gift shop, Kailua | 18 | 5 | 13 | 28% | Slow |
| Ginger lei reed diffuser | Gift shop, Kailua | 12 | 4 | 8 | 33% | Slow |
| Plumeria candle, 9 oz | Online | 90 | 52 | 38 | 58% | Steady |
Here, 70% and above is fast and below 40% is slow. The plumeria sells through everywhere, so the next batch should be bigger, and the shop should get more of it. The coconut lime and the diffuser sit at the gift shop, which could mean the wrong shop for them rather than the wrong product; trying them at the market tells which. Online, 38 plumeria jars left from 90 is fine, because the online stock is the reserve, not a shelf that needs clearing. How much to bring to a market next time is in how much inventory for a craft fair.
What a good sell-through rate is
It depends on the product and the period. A market day where most things sell through above 70% was stocked about right; a consignment shop where a product stays below 40% for three months is telling you something. For anything with a date, low sell-through is a cost, not just a slow shelf: food and candles past their best come back as waste. What to do with stock that won't sell is in obsolete inventory examples, and running a consignment shelf is in consignment inventory example.
Sell-through and inventory turnover
| Sell-through | Inventory turnover | |
|---|---|---|
| Measures | The share of what was available that sold | How many times stock is sold and replaced in a year |
| Units | Units, for one product or place | Usually money, for the business |
| For | Deciding what to make and where to send it | Judging how much cash is tied up in stock |
How turnover is worked out, with an example, is in inventory turnover example.
Get the calculator
Download the sell-through calculator. One line for each product at each place you sell it: type what was on hand at the start, what was received and what sold; available, left, sell-through and a verdict of fast, steady or slow fill in, against thresholds you set at the top. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator needs each shop's sales and stock typed in from their reports, each market's count before and after, and the online sales from the store. With a handful of places that's an evening a month; with more, the numbers come in late and in different shapes, and by the time the coconut lime looks slow, the next batch is already poured.
How TaroStack does it
TaroStack records what each customer bought and what's at each site, so sales and stock are in one place.
Sales by product and customer. Every sales order is recorded against its customer, so what each shop bought, and how fast, is a report, and margins are reported by product and by customer.
Stock where it sits. A market stall or a consignment shop can be a site of its own, counted on a phone before and after, so what came back is a number.
Making to what sells. The reorder list in days of cover is worked out from how fast each product actually sells, so the plumeria comes up first and the coconut lime doesn't.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What each shop bought | Type in their reports | Sales orders by customer |
| What came back from the market | Count and type | A count at the market's site |
| Which products sell fastest | Work out sell-through | Days of cover from real sales |
| Margins by product and shop | A separate sheet | Margins by product and customer |
Counting, sales orders and margins are on every plan, from $49 a month; more than one site is on Standard at $99. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.