Sell-through rate is a metric that measures how much of a brand’s product a dealer has sold to end customers compared to how much they have received from the brand or distributor. If a dealer receives 100 units in a month and sells 75 to customers, their sell-through rate is 75 percent.
Sell-through rate matters for dealer networks because it distinguishes between demand pull (customers actually buying the product) and channel fill (stock sitting in the dealer’s inventory). A brand that tracks only sell-in data (what it ships to dealers) can appear to have strong distribution while its products are actually sitting unsold in dealer stockrooms.
Low sell-through rates are a leading indicator of problems. They may indicate that pricing is not competitive with alternatives in the dealer’s showroom, that the dealer is not actively recommending the brand, that there is a mismatch between the products stocked and what local customers are looking for, or that brand awareness in the area is insufficient to drive pull demand.
Monitoring sell-through by location and comparing against network averages identifies dealers who are taking stock but not converting it to customer sales. These locations may be carrying the brand for cosmetic reasons while recommending alternatives at the counter, a form of passive demand leakage that is easy to miss if sell-in data is the only metric tracked.
See how Locus Intelligence manages this across your dealer network in 30 days.