The sell-through rate is the share of a delivery that sold within a set period: units sold ÷ units received × 100. It judges one buying decision, so measure it for one delivery or one season. A shop that receives 120 pairs of shoes and sells 80 by the season's end has a sell-through rate of 66.7%.
Whether 66.7% is good depends on what the shoes cost and what they sell for, not on a benchmark. This guide works one delivery by size and colour in Ugandan shillings. It sets the target from the shop's own margin and names the ArmPOS reports that give the two counts.
How to calculate sell-through rate
Divide the units sold by the units you had to sell, over the same dates, and multiply by 100. Count both in the same unit, and take customer returns off the units sold.
| Your situation | Formula | Example |
|---|---|---|
| One delivery, nothing on the shelf before it | Units sold ÷ units received × 100 | 80 sold of 120 received: 66.7% |
| Some stock left from before the delivery | Units sold ÷ (opening stock + units received) × 100 | 85 sold of 10 + 120: 65.4% |
| Several deliveries in one season | Units sold ÷ (opening stock + every delivery) × 100 | Add each delivery to the bottom line as it lands |
Three mistakes distort the figure more than the choice of formula. The first is mixing cartons and pieces: 96 pieces sold from 10 boxes of 12 is 80%, not 960%. The second is leaving in goods customers brought back, and the third is setting a month of sales against a week of deliveries.
The Corporate Finance Institute sets a month's sales against the same month's receipts. It also warns that the rate "does not reveal the causes" of slow stock, which is why the rest of this guide splits it.
A worked example: one delivery of school shoes, by size and colour
For example, a shoe shop in Kampala, Uganda, buys one style of school shoe for the eight weeks around the start of term. It pays UGX 30,000 a pair and sells at UGX 50,000. These are illustrative figures, not a real shop's.
| Colour and size | Received | Sold | Sell-through rate | Left |
|---|---|---|---|---|
| Black 32 | 15 | 12 | 80% | 3 |
| Black 34 | 20 | 20 | 100%, sold out in week 5 | 0 |
| Black 36 | 20 | 20 | 100%, sold out in week 6 | 0 |
| Black 38 | 15 | 8 | 53.3% | 7 |
| Brown 32 | 10 | 6 | 60% | 4 |
| Brown 34 | 15 | 8 | 53.3% | 7 |
| Brown 36 | 15 | 4 | 26.7% | 11 |
| Brown 38 | 10 | 2 | 20% | 8 |
| All black | 70 | 60 | 85.7% | 10 |
| All brown | 50 | 20 | 40% | 30 |
| The whole delivery | 120 | 80 | 66.7% | 40 |
The whole delivery's 66.7% looks steady, and it hides the two facts that matter. Black 34 and 36 sold out with weeks to go, so parents left without shoes. Brown 36 and 38 sold one pair in four or five.
Each size and colour is its own buying decision, so give each its own rate. The money shows why: at full price the black shoes earned UGX 900,000 more than they cost, while the brown ones are UGX 500,000 short.
What is a good sell-through rate? Set it from your margin
A good sell-through rate is one above your break-even rate: unit cost ÷ full selling price. At that rate, full-price sales have paid for the whole delivery, so each further sale adds its full price to profit.
The shop's shoes cost UGX 30,000 and sell for UGX 50,000, so its break-even rate is 30,000 ÷ 50,000 = 60%. At 66.7%, the delivery is UGX 400,000 ahead before the 40 pairs left are sold at any price.
| Markup on cost | Gross margin | Break-even sell-through rate |
|---|---|---|
| 25% | 20% | 80% |
| 50% | 33.3% | 66.7% |
| 66.7% | 40% | 60% |
| 100% | 50% | 50% |
| 150% | 60% | 40% |
The table shows why one benchmark can't fit every shop. The 80% that many software vendors' guides call good is only break-even for goods with a 25% markup. The Corporate Finance Institute's page sets no general benchmark, so set your own target by product line.
If you know the price the leftovers will clear at, the break-even rate falls: (unit cost − clearance price) ÷ (full price − clearance price). With leftovers clearing at UGX 25,000, the shop breaks even at (30,000 − 25,000) ÷ (50,000 − 25,000) = 20%.
Treat that second figure as a floor, not a target. It counts on every leftover pair selling at the clearance price, and on the wait costing nothing. Set your target above the first formula's rate.
Check it at the season's midpoint
Check the rate halfway through the season, while there is still time to reorder or cut a price. If sales run evenly, the midpoint rate doubled is roughly where the season will end.
| Rate at the midpoint | On pace for, if sales stay even | What to do now |
|---|---|---|
| 50% or more | 100%: it will sell out early | Reorder now, if the supplier can deliver before the season ends |
| 30% to 50% | 60% to 100%: above break-even | Keep the price, and put it where customers see it first |
| Under 30% | Under 60%: below break-even | Mark it down now, while customers are still buying |
The 30% line is half the break-even rate: swap in half of your own. Goods that sell mostly early, such as school shoes, slow down in the second half. For them, doubling the midpoint rate overstates the end, so act at a higher line.
At week 4, the shop had sold 46 of its 120 pairs, or 38.3%. Black 34 and 36 stood at 65% and 60%, on pace to sell out, and they did in weeks 5 and 6. Brown 34, 36 and 38 stood at 26.7%, 13.3% and 10%, on pace for 53%, 27% and 20%.
Black 38 shows why front-loaded goods need a higher line. At 33.3% it looked safe, but it ended at 53.3%, below break-even.
So the shop could have reordered black 34 and 36 at week 4, and cut the price of black 38 and the slow brown sizes then. Demand for school shoes fades once term starts, so a cut made while parents are still buying moves more pairs.
Markdown decisions are worth this care. Zara used to set its markdowns informally, then switched to a sales forecast that feeds a price model. In a controlled test in Belgian and Irish stores, clearance revenue rose by about 6% (Caro and Gallien, 2012).
What to do at each level, and next season's order
At the season's end, the rate tells you what to change in the next order. Read it for each size and colour against your break-even rate.
| Final rate | What it tells you | Next season |
|---|---|---|
| 100%, sold out before the end | Customers wanted more than you bought | Order more, and note how many customers you turned away |
| From break-even to 99% | The buy paid for itself at full price | Keep it, and re-split it by size and colour |
| Below break-even | It lost money at full price | Order fewer, or drop the line |
Split the next order by what sold, not by what you received. The shop sold 80 pairs, so to buy 120 again it multiplies each line's sales by 120 ÷ 80 = 1.5.
| Colour and size | Sold this season | This season's order | Next season's order |
|---|---|---|---|
| Black 32 | 12 | 15 | 18 |
| Black 34 | 20 | 20 | 30 |
| Black 36 | 20 | 20 | 30 |
| Black 38 | 8 | 15 | 12 |
| Brown 32 | 6 | 10 | 9 |
| Brown 34 | 8 | 15 | 12 |
| Brown 36 | 4 | 15 | 6 |
| Brown 38 | 2 | 10 | 3 |
| Total | 80 | 120 | 120 |
The two sizes that sold out sold fewer than customers wanted, so add the pairs you turned away to their lines. Clear this season's 40 leftovers before the new delivery lands: at UGX 25,000 a pair they bring UGX 1,000,000, and the delivery ends UGX 1,400,000 ahead.
Pairs still unsold three months later have become dead stock, which costs money every month it sits on the shelf.
Sell-through rate vs turnover, sell-in and sell-out
Sell-through judges one delivery; inventory turnover judges all your stock over a year. A shop can turn its stock fast overall and still make one bad buy. Only the delivery's own rate shows it: see the inventory turnover ratio.
Sell-in and sell-out describe the same goods from the supplier's side: what it sold to you, and what you sold on. Suppliers watch the gap between the two, as sell-in vs sell-through explains.
Sell-through rate is one of the eight inventory management KPIs, the one that judges a buying decision rather than the whole stock.
How to raise a low sell-through rate
Fix the cause the numbers point to, not the rate itself. Each cause leaves a different mark in the figures.
| Cause | What the numbers show | Fix |
|---|---|---|
| Wrong mix of sizes or colours | Some sizes sold out, others barely moved | Split the next order by what sold |
| Price too high | Every size slow from the first weeks | Mark down at the midpoint, not after the season |
| Customers don't see it | Slow on the back shelf, steady wherever it is on display | Move it near the entrance or the till |
| Bought too much at once | All sizes at about the same low rate | Buy less up front, and reorder the sizes that sell |
| Delivered at the wrong time | Sales start late or stop early | Time the delivery to when customers buy |
Where a product sits and what it is shown with matter as much as its price. Stock on display is still stock you paid for: merchandise inventory shows what it costs you on the shelf.
Bundles and gifts with a purchase can move a slow line, but they hide its real price. Record what the discount cost, so the next order isn't judged on a rate the discount bought.
The deeper fix is buying less and reordering more often, which is how reorder points stop overstocking before it starts.
How to measure sell-through rate in ArmPOS
ArmPOS doesn't show a sell-through figure, but two reports give both counts, and a spreadsheet does the division. These steps follow the Help center guides.
- Give each size and colour its own variant. A variable product keeps its own code and stock for each variant, so each size gets its own rate: Products with variants.
- Read what came in. Reports › Product purchases report lists each line of each purchase: what you bought, from whom, how many and for how much. Set the season's dates and search the product's name: Customer and supplier reports.
- Count only goods received. The report also lists purchases still ordered or pending, which added no stock. Check each Reference's Status in Purchases › All Purchases: Record a purchase from a supplier.
- Read what went out. Reports › Product sales report lists each product line of each sale, with its Qty sold. Use the same dates, then export both reports with EXCEL, where each variant's name is on its line: Sales reports.
- Put both in the same unit. The purchases report counts in the unit you bought in. If you buy by the box of 12 and sell by the piece, multiply the boxes by 12 first: Categories, brands and units.
- Take off returns. In Reports › Stock Report, Reports on the product's row opens its history, with its returns on their own tab: Stock reports.
- Mark down the slow sizes. Each variant has its own Retail Price, so you can lower it for the slow sizes alone. Change it in the Variants part of the product's Edit page: Find, edit and update products.
- Time a markdown on a whole product. On plans with Promotions, a promotion limited to Specific products runs between the dates you set, at the till and on Add sale. Its Usage Report shows what it gave away: Promotions and promo codes.
For the midpoint check, set both reports to the weeks so far. After the season, the Dead Stock Report and the Stock Aging Report show which leftovers are still sitting, and for how long.
Frequently asked questions
Is a higher sell-through rate always better?
No. A rate of 100% reached weeks before the season ends means customers left without buying. Aim above your break-even rate, with a few units left at the end.
What is the difference between sell-through rate and inventory turnover?
Sell-through compares one delivery with its own sales, in units. Turnover compares a year's cost of goods sold with the average stock, in money, across everything you hold.
How often should I calculate sell-through rate?
For seasonal goods, at the midpoint and at the end of each season, or weekly if you can. For lines you restock all year, once a month is enough.
Should sell-through be measured in units or in money?
In units, for a decision about one product. Use money at cost when a delivery mixes cheap and dear items, so a few expensive pieces count for what they cost.
What is a good sell-through rate for clothes and shoes?
One above the break-even rate your cost and price set. At a 100% markup that is 50%; at a 50% markup it is 66.7%.
Work out the break-even rate for your next seasonal order before you place it. Create a free ArmPOS account to get the purchase and sales counts from its reports, size by size.
