[RetailEdge Moderator]

Here are a couple of questions about the Sell Through Report.

What does a negative sell through mean?

Not much other than your beginning on hand inventory or sales were negative. If it is due to sales, you have received a number of returns. If it is based on a negative on hand, then you either pre-sold some items or your inventory was incorrect to begin with.

What does it mean to have high sell through percentages?

This depends and this is one of the reasons you need to be careful with this report. For example, say you have an end of month inventory quantity for an item of 50, an initial inventory of 100 items, receiving of 50 and and sales of 100. This would be calculated as a sell through of 100% (Sales over Beginning Inventory). Pretty good.

However might run the report for the month where your end of month inventory quantity is 1, receiving is 100, sales is 100 and your beginning inventory quantity is 1. If you run a sell through report now, it will show a sell through percentage of 10,000%.

You sold the same 100 but remember your sell through is based on the beginning inventory quantity so this gives you very different results. This does mean that you are selling a large quantity in comparison to your starting inventory and this can be meaningful.

You also need to be aware of the fact that this report can be significantly skewed by the time and period for which it is run. For instance in the above example, say I started out at the beginning of the month with the 100 and I receive the 50 at the end of the period but my sales don't occur until next week. My sell through in this case will be 0.

Or if it is a new item and I did not have any of the item at the beginning of the period, you receive 50 and then the report will show a sell through of N/A because the Beginning Inventory is 0 and you can't divide by zero. Even if all the items you received for the period were sold.

This report is useful for trending, comparison with other like inventory items and it is critical that you understand how these numbers are generated.