Retail Dogma

Retail Math

The Sales Equation

The sales equation for retail & ecommerce businesses is: Sales = Traffic x Conversion x Average Transaction Value (ATV) Sales Equation Example For a business that has received a traffic of 1354 customers and had a conversion rate of 30% and an average transaction value (ATV) or average order value (AOV) of 112$, the formula …

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Retail Math 101

Retail Math 101 In this retail math guide, you will learn the basic concepts and their respective formulas, as well as the practical applications of these concepts. Watch the video on each concept, and then follow the links for in-depth reads, practical examples & best practices. ADVERTISEMENT Attachments Retail Math Formulas Cheat Sheet Retail Benchmarks …

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Units Per Transaction (UPT)

Units per Transaction (UPT), aka Items per Customer (IPC), is a retail KPI used to measure how many items customers add to the shopping basket on average. It is used together with Average Transaction Value (ATV) & conversion to assess the effectiveness of the sales process and the sales team at the store. Units Per …

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Average Transaction Value (ATV)

Average Transaction Value (ATV), aka Average Order Value (AOV) in ecommerce, is a sales KPI used to measure the effectiveness of the sales process and the sales team in the store. The more skilled the sales team on the floor, the higher ATV they can deliver for the business. It is usually combined with other …

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Average Inventory

Average inventory is usually used during the calculations of different inventory metrics that are used to assess the efficiency of inventory management practices at a company. What is Average Inventory? Average Inventory is the average value of inventory that a company holds over a certain period of time. This period could be a month, a …

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Days Sales in Inventory

Days Sales in Inventory (DSI) measures how many days it takes to sell the company’s inventory. It is used together with other metrics like inventory turnover ratio and GMROI to track how efficiently a company manages its inventory. While a low DSI can be positive or negative; ie it could mean that either the company …

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Inventory Turnover

Inventory turnover ratio (IT) measures how many times a company turns its inventory during a certain period of time. It gives an idea about how efficiently a company is managing its inventory. How To Calculate Inventory Turnover? Inventory Turnover Formula: Inventory Turnover (IT) = COGS ÷ Average Inventory To calculate IT you will need the …

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