posted on June 29, 2001 08:52:36 AM new
We've all been discussing sell-thru for weeks now. I have a question though. I've never been in retail sales before. What is the sell-through for a typical retail chain (per week)?
Does Sears sell 15% of its inventory in a week? How about Old Navy?
Then, what about small mom & pop stores? What is a reasonable sell-through for them?
If we are going to discuss the sell through of auctions, we need some standard real-world comparison.
posted on June 29, 2001 10:53:48 AM new
Not sure what the "sell-through" rate is for retail stores, but let me relate this story.
A stock analyst was in a retail store, waiting in line with his merchandise. The store had four lines open, each with four people and all with about the same number of items.
When he finally made it to the register after fifteen minutes and completed his $25 purchase, he did a rough calculation on just what the store was generating revenue-wise.
With $25 per person and four people every fifteen minutes, the store was generating $400 per hour per line.
With four lines open the store was generating $1,600 per hour.
He then estimated what the merchandise cost the store from their wholesalers, the cost of all the employees running around the store, and expenses like lighting and air conditioning, and concluded the company was not doing all that well.
Its much the same with these alternative auction sites. You have items listed, relisted, and then relisted again and again, ad nauseum.
Most of the time there's nobody standing in line at your register. And when a couple people do you're not really doing all that well.
posted on June 29, 2001 03:56:48 PM new
actually the sell Thur in retail varys big time depending on the Size of the store and type of items you sell and the time of year no different then online auction sales.
If you are walmarts you would give anything to sell 15% to 20% of the stock in a given week but in truth they have so much packed in these stores there sell thur is more like 6% to 10% except on a good hoilday period.
If your a mom & pop you have less Stock you pretty much stock things you know are sure sellers and sell through is a bit higher 9% to 12%.
Best type business is service station where you sell gas and do repairs, where your sell thur can run as much as 90% to 140% .
another is food where stores are restocked daily not weekly or seasonaly.
The big difference with Retail and auctions is they are trying to scratch out there little profit from volume of sales not profit on single sales.
Where you as a online auction seller might put up a computer system it might sell for $350 profit to you after all your costs the retail store will have to sell 10 or more of these to see a $350 profit after all the costs.
posted on June 29, 2001 06:26:03 PM new
Sell through rate = turning your inventory?
In my real world business, I turn my inventory every 45 days or so. Some items are bought specifically to fill the orders from customors, and I'll never sell them again...while most of my inventory are stocked items tht have a proven sales history.
Only able to have a good turn rate online on selected items, (usually rare or unique collectibles) other things just sit and sit, no matter which site I list them on.
I have a room full of unsold stuff, thinking about a yard sale, but thats another thread I guess...
posted on June 29, 2001 10:21:52 PM new
Sell-thru rates really don't mean much if you're not comparing apples to apples. If you are the only seller selling applejacks at eBay and applejacks are hot, you might have a sell-through rate of 90-100%. You share the news and suddenly 10 more applejacks sellers come in and start undercutting your prices. Now, maybe a 50% sell-through rate is good but you had to drop your prices.
Very few people are selling the exact same stuff as others so unless you're doing an analysis with people who sell almost similar types of items in pricing, etc, it won't make a difference. Bobby Sue might sell 10% of her stuff because she overprices and can't spell worth a darn in her listings. Josie Jane might sell 80% of her stuff because she's practically giving it away to pay her rent.
What is good is if you're consistently making a profit. What is good is if you're doing your own market research on pricing, dates of close, etc before listing an item. If someone is innovative, does their research on sites and consumer psychology and sells proven profitable products, there isn't one month that they can't be making a substantial profit in buying/reselling. It's an awesome opportunity with so much potential.
In retail, it's no comparison. Mark-ups are significantly higher, overhead is higher and stuff will set on shelves for months if you're in the giftware industry, clothing industry, etc. In online auction you can turn gifts and collectibles around so much more quickly if you know how to write, market, price and list. You can move volume at a lesser margin. Online gifts and collectibles sellers can/have really hurt some of the retail Mom & Pops.
