Weeks of Supply and Sell-Through Rate: Retail Inventory Metrics Explained
October 29, 2026
Retailers watch two simple inventory ratios to avoid stockouts and overstock. Weeks of supply (or weeks on hand) is the inventory on hand divided by average weekly sales: 1,200 units ÷ 150 units per week = 8 weeks. It tells you how long the stock would last at the current sales rate. Sell-through rate is the percentage of the stock received that has been sold in a period: units sold ÷ (units sold + units on hand) at the end of the period. If you sold 500 units and have 1,200 left, sell-through is 500 ÷ 1,700 = 29.4%.
Both metrics guide purchasing, markdowns, and promotions.
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Weeks of supply: a low value (1 to 2 weeks) risks stockouts, especially with long supplier lead times; a high value (12 or more) ties up cash and risks markdowns or obsolescence. The right level depends on lead time and product type: fast-moving groceries may hold 1 to 3 weeks, apparel 8 to 16 weeks, and seasonal goods have to be planned to end the season near zero. Sell-through: for fashion and seasonal items, a sell-through of 60% to 80% at full price by mid-season is a common goal; low sell-through signals a need for promotion or markdown, while very high sell-through early suggests you may have under-bought and are missing sales.
| Product | On hand | Weekly sales | Weeks of supply | Sell-through (sold vs. total) |
|---|---|---|---|---|
| Item A | 1,200 | 150 | 8.0 | 500 of 1,700 = 29% |
| Item B | 600 | 400 | 1.5 | 400 of 1,000 = 40% |
| Item C | 300 | 20 | 15.0 | 40 of 340 = 12% |
| Item D | 900 | 300 | 3.0 | 1,100 of 2,000 = 55% |
Reorder Decisions
Compare weeks of supply with the lead time. If the supplier takes 3 weeks to deliver and you carry 1.5 weeks (Item B), you will stock out before the next delivery. Reorder when weeks of supply drop to lead time plus a safety buffer, say 3 + 1 = 4 weeks. For Item B, order now enough for lead time plus the review period. For Item C, 15 weeks of supply with weak sales suggests a markdown or bundle to clear stock, and no reorder. Use trend-adjusted sales rather than a simple average if demand is changing.
Seasonality and Planning
Weekly sales averages hide seasonality. Use forecast sales for the coming weeks, not just last week's, when computing weeks of supply: if 150 units a week are expected to rise to 300 in the holiday season, 1,200 units last 5 weeks, not 8. Plan the end-of-season inventory to hit sell-through targets by the end date. Sell-through at 4 and 8 weeks from launch is a strong predictor of final results, and retailers decide on markdown timing using such checkpoints.
Related Measures
Inventory turnover shows how many times inventory is sold in a year (annual COGS ÷ average inventory). Gross margin return on inventory investment (GMROI) shows profit per dollar of inventory. Weeks of supply of 8 corresponds to turnover of 52 ÷ 8 = 6.5 per year. Use these measures with unit sales and margin data to prioritize which products deserve capital.
Frequently Asked Questions
How do I calculate weeks of supply?
Inventory on hand divided by average weekly sales.
What is sell-through rate?
Units sold divided by units received (sold plus on hand), as a percentage.
What is a good sell-through rate?
It depends on the product and period, but 60% to 80% at full price by mid-season is a common target for seasonal goods.
When should I reorder?
When weeks of supply fall to the supplier lead time plus a safety buffer.
How does turnover relate to weeks of supply?
Annual turnover is about 52 divided by weeks of supply.