Sell in vs sell out: a fundamental KPI of logistics efficiency and demand
Gilles Dallest
Sell in? Sell out? … What about it?
Sell In and Sell Out are two concepts associated with the sale of the product, from the moment it leaves the factory until it reaches the final consumer.
What is sell in?
The sell in is the figure of sales or units sold of a brand or reference by a manufacturer or a wholesaler to a distributor or point of sale.
This concept is associated with “deliveries” over a period that can be made centrally (to the distributor’s logistics platforms) or directly to the point of sale. This later model of direct delivery to the point of sale began to disappear at the end of the 90s in favor of a centralization of deliveries.
The centralization of the sell in allowed significant cost savings and an improvement in efficiency for the logistics chain at the cost of a loss of visibility of sales by point of sale for manufacturers.
Some of today them maintain this model of direct delivery to store such as Danone or the Bimbo group in some countries.
To recover the visibility of the sale at the point-of-sale level, manufacturers can count for example on sell out data per store provided by distributors.
What is sell out?
The sell out is the number of sales or units of a brand or reference sold to the final shoppers/consumers at the points of sale. It is what “comes out” of the stores hence the term “sell out”.
These sales can be aggregated centrally (a distribution panel is based on sell out sales) but they are mostly interesting to analyze at point-of-sale level.
For a manufacturer delivering their products on the logistics platforms of distributors, having access to sell out data at store level is the only way to achieve visibility of sales at the finest level and understand the “moment of truth” or shopper/product meeting.
Sharing this information is the responsibility of distributors and depends a lot on the policy of each of them, as well as the commercial culture of each country. However, collaborations in this regard are developing between manufacturers and distributors with the aim of developing markets.
Sell in vs. sell out: a fundamental KPI of logistics efficiency and demand
Within the fundamental KPIs of a Business Intelligence tool, it is very interesting to be able to compare the sell in and sell out data. Subtracting the quantities sold to the shopper (sell out) from the quantities delivered to the distributor (sell in) allows to calculate the “stock in trade“, that is, the level of products available in the distributor’s network of stores and / or warehouses.
For the demand planning teams of the manufacturers, this information allows to adjust the sales forecasts and production plans of the factories, especially in terms of promotions, and thus improve the efficiency of the logistics chain and the response to consumer demand by reducing the risks of out of stocks.
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