How to use sell through rate to set buy depth for next season
The short answer
Sell through rate is units sold divided by units received over a period. Calculate it by category, size and color for last season, then set next season's depth from the result. Buy deeper where sell through hit your target at full price, and shallower where stock needed markdowns to clear.
Inventory depth planning from last season's sell through
Why it matters
Buy depth sets your margin before the season starts. Too deep and you discount to clear. Too shallow and you miss sales you could have made at full price. Sell through by category shows how deep to go.
The question to ask
Copy this into Lexi as written.
How to work it out
1. Calculate sell through by category. Divide units sold by units received for last season, split by size and color where the data allows.
2. Separate full-price from markdown sales. Show how much of the sell through happened at full price and how much needed a discount to clear.
3. Set depth against demand. Match next season's buy to the full-price sell through, adjust for any stock-outs that capped sales, and check whether full-price buyers were repeat customers or one-off shoppers, since loyal demand is more reliable.
What the answer looks like
Illustrative output on sample data
Illustrative example: how Lexi answers this for a toy retailer. It compares last holiday season's units received with units sold, split by full price and markdown.
- Building sets: 12,000 received, 9,600 sold, 7,200 at full price. Sell-through 80%, full-price sell-through 60%.
- Plush toys: 5,000 received, 4,600 sold, 4,400 at full price. Core lines sold out by mid-December.
What the data shows
Building sets look healthy at 80%, but a quarter of the units sold needed a markdown. Plush ran out while demand was still there.
What it means
Full-price demand for building sets was closer to 7,200 units than 12,000. Plush lost sales it could have made at full price, mostly to repeat gift buyers.
What to do
Buy building sets shallower, near 7,200 units plus a buffer, and buy plush deeper to cover the weeks it was out of stock.
Lost plush demand is estimated from the sell-out date, so treat it as a floor. Want me to show which customers bought each category at full price?
Frequently asked questions
What is a good sell through rate?
Set the target against your own plan for each category and season length, since a fair figure for a six-week fashion drop sits far above one for a year-round homewares line. Measure full-price sell through on its own as well. A strong overall rate that only arrived after markdowns still means the buy was too deep.
How long should the measurement period be?
Use the length of the selling season, then review at the midpoint to catch problems while you can still act. Short periods swing with promotions and weather, so compare like periods across years and treat early weeks as a direction of travel.
Is sell through the same as stock turn?
No. Sell through measures the share of received stock you sold in a period. Stock turn measures how many times you sell and replace your average inventory in a year. Use sell through for buy depth and stock turn for overall stock health.