It is interesting how you can always discover new ways to look at data and Salesdata is no exception. We are adding new features regularly so it is always a danger that existing features get overlooked or forgotten.
Okay before we go down the rabbit hole of “Megatechnics” thinking, my point is really simple. Don’t forget what you already can do with SalesData reports!
Here is a data point that we have provided for sometime. What is it good for? %Sell Through tells you about the velocity of sales. We provide it for the weekly timeframe and it is a simple -perhaps even elegant algorithm: sales/on hand. What that gives you is a number that tells you speed of sales. For example if a retailer has sold 1 book in the week and they have 5 on hand then their %Sell Through is 1/5 *100 = %20. That means if sales keep up at this rate you will have 5 weeks of stock. But you can look at our little red or green icon in the percent change column signaling sales increasing or decreasing and figure out what to do next.
What if the %Sell Through is something like %400? In this example that could mean that you sold 44 units and have 11 on hand: 44/11 *100 = %400. Hey unless you know something I don’t (special order perhaps, event?) you should reorder that book!
So % Sell Through is a really good way to see a books performance in a weekly period. What if you want to know about a longer time frame? Enter that radical retail calculation…
In an earlier post the eminent Michael Tamblyn noted that the grocery channel lives and dies by the stock turn so why doesn’t the book industry use that philosophy more earnestly then discount/margin to make a buck? And to that end salesdata gives an item level stock turn which means stock turns for every book in the marketplace.
Because the stock turn formula is (Average OH/Average Units Sold)/Number of weeks in report]*52 to annualize the number, in order to see stock turn in salesdata you need to change your timeframe to include at least 2 weeks (but the more weeks the better). By improving stock turns on a per book basis you are really addressing the earning power of inventory. In what is surely by now a classic of bookselling The Mathematics of Bookselling by Leonard Shatzkin engages in the most compelling argument for shifting buying habits from a discount oriented approach to a stock turn approach. There is just more money to be made in them thar stock turns!
Why should publishers care about these two numbers? Quite simply it is all about the supply chain and supply chain efficiences. If you have a peer to peer relationship with your retailers then you have access to %Sell Through and Stock Turn analysis. Then you have a view of your books performance, imminent stock outs in various places and you might even be able to help your fellow book loving retailer by selling for a healthy stock turn that will keep the right number of your books in the supply chain making the most amount of hard cash that they can so that bookseller will be able to live to buy another day.