Retail

Stock to Sales Ratio

What is the Stock to Sales Ratio?

he ratio of stock available for sale, versus the stock that has been sold. 

The stock to sales ratio will help you keep your inventory at optimum levels. If you have too much inventory, you are tying up capital that could be better spent elsewhere. Conversely, if you have too little stock, you may run out, which is the number one thing not to do for retailers.

How to Compute the Stock to Sales Ratio? 

To get your stocks to sale ratio, simply divide the units available on a time period by the units sold on the same time period.

Stock to Sales Ratio = Units available ÷ Units sold

Retail

Shrinkage

What is Shrinkage?

The shrinkage refers to the percentage of inventory that is listed in records but is not physically in the actual inventory.

This KPI, when excessive, may mean that you have a problem with inventory damage, theft, miscounting, or supplier fraud (when a supplier bills for more products than it sends), and that a thorough investigation should be performed.

How Do You Calculate The Shrinkage?

To calculate the shrinkage percentage, subtract the cost of recorded inventory in a time period by the cost of physical inventory in the same time period. Multiply the result by 100 to convert it to its percentage.

Shrinkage = (Cost of Recorded Inventory – Cost of Physical Inventory) ÷ Cost of Recorded Inventory x 100

Retail

Repeat Customer Rate

What is Repeat Customer Rate?

The repeat customer rate pertains to the measure how many of your customers come back for a repeat purchase in a certain time frame.

How Do You Calculate The Repeat Customer Rate?

To calculate your repeat customer rate, simply divide your repeat customers in a time period by your total number of paying customers in the same time period. Multiply the result by 100 to convert it to its percentage.

Repeat Customer Rate = (Repeat Customers / Total # of Paying Customers) x100

Rate of Return

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Retail

Rate of Return

Customer Service       Jun 08, 2020 

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What is The Rate of Return?

 

The percentage of shipped items that are returned to you. This KPI tells you how much of your inventory is being returned to you, allowing you to identify any patterns of issues (defective or malfunctioning products, inferior quality products, etc.)

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How to Calculate The Rate of Return?

 

To calculate the rate of return, get the number of items returned on a specific time period then divide it by the total number of items shipped in the same time period. Multiply the result by 100 to get its percentage.

Rate of Returns = (# of Items Returned ÷ Total # of Items Shipped) x 100

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Importer & Exporter

Back Order Rate

What is The Backorder Rate?

This is the rate at which incoming orders come for out-of-stock items. It usually indicates a failure to accurately forecast sales and plan ahead. Backorder rates can spike with seasonal demand, rise and fall with consumer trends, or slowly creep up if forecasts consistently underestimate sales. All are bad, as backorders break the first rule of inventory.

How to Calculate The Backorder Rate?

To calculate the backorder rate, divide the number of undeliverable orders by the total number of orders and multiply the result by 100. If your customers typically order items with multiple delivery schedules, use lines in place of orders.

Back Order Rate = (# of Undeliverable Orders ÷ Total # of Orders Placed) x 100