What Is Sell-Through Rate?
Sell-through rate tells you what percentage of stock you've sold in a given period. Essential for managing inventory and avoiding markdowns.
Key Takeaways
- Sell-through rate = Units Sold ÷ (Units Sold + Units Remaining) × 100.
- High sell-through rate means you're selling efficiently; low means excess stock.
- Target sell-through rates vary — fashion aims for 80%+ in season; staples can carry lower.
The formula
Sell-through rate is units sold divided by total units available (sold plus remaining), expressed as a percentage. If you received 500 units of a product and sold 350, your sell-through rate is 70%. The remaining 30% represents capital tied up in unsold inventory.
Why it matters
Unsold inventory is frozen cash. It also incurs ongoing storage costs (warehouse fees, Amazon FBA long-term storage fees), risks obsolescence or damage, and eventually requires markdowns that erode margin. A high sell-through rate means you're ordering the right quantities and selling efficiently.
What a good sell-through rate looks like
For seasonal or fashion products, 80–85% sell-through by end of season is considered healthy. For evergreen or replenishable products, 60–70% sell-through at any point in time is normal — you expect ongoing replenishment. The benchmark depends on your category and replenishment lead time.
Using sell-through to inform buying
Track sell-through by product and by season. Fast sellers with consistently high sell-through are candidates for deeper buying and safety stock. Slow sellers with low sell-through should be reordered in smaller quantities — or replaced entirely. Over time, this discipline significantly improves your inventory productivity.