Sell-thru analysis is not simply for measuring the 
performance of promotional items. Sell-thru analysis is a 
key ingredient to measuring the accuracy of the forecast for 
an item as well.

Sell-thru is defined as POS sales divided by ships for a 
given time period. Having this in mind, it is easy to see why 
the following situation would be construed as positive: 

Supplier ships 2,500 units of their product to their Retailer 
in a two-week time period. In the same time period, the 
Retailer moves 2,200 units out the door. This equates to an 
88% sell-thru rate in the last two weeks! Sounds great, and 
it is! 

However, it also means that there is nowhere near enough 
product moving to these stores to cover the demand for this 
SKU. It is quite possible that the 300 units that did not sell 
during that time period were all in a handful of stores with 
low demand for this SKU. What this means is that there 
were actually lost sales in most of the stores!

By looking behind the great sell-thru rate, we were able to 
see that a score that would be taken as positive at face 
value was actually a warning bell to an experienced analyst! 
By recognizing this warning sign, we were able to work with 
the Replenishment Manager at the Retailer to increase the 
orders to certain high-demand stores.

Oh by the way, this was an actual scenario by which we 
helped a Client increase their POS by 34% within 6 months 
after making the necessary adjustments!