RPS is KING...

I bet you were thinking about Rock Paper Scissor right? That sounds like a lot of fun but I was actually referring to RPS – Regular Price Selling. When I was a buyer for Bloomingdale’s, my planner and I looked at the RPS report every single week. It was like our “Bible” in determining how we distributed our product buys to each of our store locations every single month. Why is this so important? Before we can dive into why your RPS is so important, let’s go over your sell-thru percentage.

1. Sell-Thru Percentr
Sell-Thru Percent is the percentage of your inventory that you sell-thru each day/week/month..etc. Simple, right? Here is an example. If you sold 10 units last week of a product that you had 500 units in inventory at the beginning of the week, your weekly sell-thru percent is 2%. That’s not good!

To calculate your weekly sell thru %, follow this formula:

Sold Units / Beginning of week inventory = ArnA x 100 = B%

I would say 8-12% (an average of 10% sell thru) is a good percentage to use as a barometer.

If you have an item that is considered “basic”, it can have a lower sell-thru of 5% and still be OK. By basic, I am referring to products that you want to be “in-stock” ALL the time. An example of these styles can be black and white t-shirt styles, basic style jeans, black pumps…etc. You just have to remember that your other “fashion” styles have to turn faster to balance out the sell-thru% for the total department.

On the other side, if you sell 10 units of a product that you only had 50 units of at the beginning of the week, your sell thru is at 20%! That’s a great sell-thru! It also means that you probably missed out on “some” business. As a buyer, I am constantly in a balancing act of “chasing my business” and being “in-stock.” The sell-thru model differs by category of business but this will give you a good idea. As a designer, it will be beneficial to partner with retailers who can share selling reports with you so that you are aware of what’s going on. You can be “on the ball” and can assist them in getting them more inventory when they are selling out (and vice versa) – it’s a win-win partnership!

2. Regular Price Selling (RPS)
So how does this affect your RPS? You want to be monitoring the sell-thru percent (as mentioned above) for your regular price merchandise. Let’s say that you had a high 30% sell thru last week, but if that all came from markdown selling it doesn’t really mean much in terms of growth opportunity. Buyers/Retailers want to grow businesses that they can sell thru at regular price. It’s as simple as that!

Are you monitoring your sell-thru % for your business? Here’s to maximizing missed opportunities and creating new ones!