Retail and Ecommerce Math Essentials - Orkiv

GUIDE TO EVERY RETAIL/ECOMMERCE MATH

ESSENTIAL EVER

[email protected] Powered By Orkiv.com 401-300-4653

So you want to know your numbers better? You can be sure you’ll find the right definitions, formulas, and

examples of them here.

Retail MathFor world-class retail technologies that improve purchase frequency through smarter software, check out Orkiv.com, our Epic Commerce

system, and Proximo local conversion platform.

SELL THROUGH (ST%)Period Sales/(Period Sales + Inventory at End of Period)Sales = 1000 EOH= 9000ST%= 1000/(1000+9000)= .10 or 10%Benchmarks for sell through vary greatly by category and retailer. For example, a 20% weekly sell through on a junior’sdenim jean may be considered average, whereas 5% weekly sell through may be considered very high for a luxury comforterset.

WEEKS OF SUPPLY (WOS)Inventory/Average Weekly SalesOH= 9000 Last 5 Weeks of Sales = 4500 AV= 4500/5=900WOS= 9000/900 = 10 weeksExample: 8 WOS is high for Wal-Mart, Anything below 24 at Bed Bath and Beyond is considered lightly covered.

Average Unit Retail (AUR) or Out the Door (OTD)Sales $ for Period/Sales Units for PeriodSales $ = $10,000 Sales Units = 657AUR= $15.22

Gross Profit Dollars and Percent (GP$, GP%)GP$ = Sales $ - Cost of Goods Sold $ (Cost $ = Sales Units x Cost)GP% = GP$/Sales $Margins also vary widely between product categories and retailers. For instance, price clubs usually accept margins between11 - 20%, while department stores expect well over 40%.

Markdown Dollars and Percent (MD$, MD%)MD$ = Ticketed Price Sales - Actual Sales $MD%= MD$/Actual Sales $

Does a 25% off Promotion = 25% Markdown?Ticketed Price: $14.99 Promotion: 25% offWhat was the Markdown %?Out the Door (AUR) = $14.99 x .75 = $11.24Markdown $= $14.99 - $11.24 = $3.75Markdown % = $3.75/$11.24 = 33.3%No. As you can see, when you sell something at 25% off, you’re really taking a 33.3% markdown!

Average Weekly Units/Store and Average Weekly $/StoreAv Weekly Units/Store = Av Unit Sales/# StoresLast 6 weeks sales = 4500 # Stores = 500Av Weekly Units= 4500/6 = 750Av Weekly Units/Store = 750/500 = 1.5Av Weekly $/StoreAv Weekly $/Store = Av $ Sales/# StoresLast 6 weeks sales $ = $45,000 # Stores = 500Av Weekly $ = $45,000/6Av Weekly $/Store = $7,500/500 = $15

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Retail MathFor a comprehensive resource guide to retail and supply side planning, download our Retail Primer ebook:http://www.enhancedretailsolutions.com/product/enhanced-retail-solutions-retail-primer/

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Date post:	10-Jan-2017
Category:	Retail
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