Season 3: Episode 42: The Importance of Sell Through Rate

This week on The Seller Community Podcast from List Perfectly, Trish and Doug talk about sell-through rates. Learn about the different types of sell-through rates, why the sell-through rate is important, how to figure it out and track it, and how to use it to grow your business. 

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Sell Through Rates

Doug: What’s up, Trish?

Trish: What’s up, Doug?

Doug: How’s it going?

Trish: Okay, how about you?

Doug: I am doing well, thank you.

Trish: You’re welcome.

Doug: Ladies and gentlemen, Trish came up with this idea that we would do occasional educational resource content for you, and so basically what that means in selling is I ask Trish questions and she answers, right?

Trish: I do think, yeah, but we may be a little bit more than that down the road, I do think that we have a lot of knowledge between us. We know a lot of people we could ask questions to.

Doug: There you go.

Trish: And eBay knowledge, reselling knowledge in general, sometimes it’s hard to get to the point. And so we figured maybe we’d try to serve that market a little.

Doug: And we’ll just have to see how it goes. But today we are talking about a hot topic, sell-through rate.

Trish: Yeah. So sell-through rate. Of course, it’s been a thing forever. First heard it when I first started eBay, I had no idea what the hell that meant or why anyone would care. And now it’s a hill I will die on.

Doug: So what is the sell-through rate for those that don’t know?

Trish: So there are a few different ways we use the sell-through rate. You can use a sell-through rate for a specific item. Like, when you go to buy something, you can look up its specific sell-through rate to decide if it’s a good buy or not.

People use sell-through rate for their stores. What’s your store sell-through rate to see if you have a healthy store? And then you can also do it like for a yearly thing, like what’s your yearly sell-through rate to decide if you’re turning your inventory over fast enough and also if you have the right balance of inventory, things like that.

For me, I think the most important one is when you buy. The rest, if you’re buying well, the rest will work itself out.

Doug: All right. Cause that’s the next question. Why is this important to sellers?

Trish: It’s important to sellers because if you’re going to go in and spend 50 bucks on an item, right? 50 bucks is quite a bit of money, but let’s you think the item could be sold for 250. Is it worth spending 50 bucks on? If the sell-through rate shows you, and we can talk about how you figure it out in a minute, but if the sell-through rate shows you that it should sell in less than 90 days, The question is, can you sit on that 50 bucks for 90 days?

And if you can, great, buy it. If the sell-through rate shows you that it should sell way faster than 90 days, you’ll get your money out of it right away. Great idea. But what if the sell-through rate shows you that it might take a year to sell? Is that worth doing? That’s then how much capital do you have? Things like that.

Doug: So it’s interesting because sell-through rate’s a business thing and it’s Always mentioned and very associated with eBay. Why do you think that is?

Trish: Because eBay is very easy to give the data. This data is not as easy to find on Mercari or Posh or things like that. Because of the nature of what eBay does, eBay has 90 days’ worth of data all the time.

So we can go in and look up anything that has been sold in the last 90 days. Figure out exactly how many of that exact item is on sale right now on eBay. And with those two things, we can figure out what the sell-through rate is. What’s great about eBay is eBay makes that information known to anybody Other places don’t give you that information You can’t go into Mercari and figure out when the last time something sold things like that as easily. And for as long and then not also does eBay give you that 90 days so easily eBay owns Terrapeak Which is a free service that comes with anybody who has a store subscription on eBay. So if you’re just an eBay seller, but you don’t have a store, you can’t get into Terapeak. I could make an argument that everyone who sells on eBay should have a store. If you are going to be doing it even part-time it is worth having.

And so with that, you get the Terapeak subscription and then you can go in and you can look at data for two years. So then you can make really informed decisions. And if you’re somebody who sells art, mid-century modern, if you sell collectibles, electronics, very high-end records, high-end things that are graded, Terapeak then can become integral to what you’re doing because you know where you can invest your money and how fast it should be till you get it back out of that item.

Doug: Yeah. And that data is very important. There are people who will not believe this, but eBay is not BSing the data. 28 years of buyer and seller data across multiple categories. And it’s a lot of data. You can get a lot of data. You should be using that data. And then listeners, I don’t want to imply that I do math at all, so it’s, this sounds mathy, Trish, but how do I figure, let’s say I wanted to figure the sell-through rate, how would I?

Trish: Okay, so to figure out your sell-through rate, I wrote it down so I didn’t want to screw it up. The sell-through rate equals the total number of units sold divided by the total units available for sale. So let’s say 50 units of whatever. Widget number a, okay. So widget a, there’ve been 50 units of them sold and you look up and right now there are a thousand for sale. So 50 were sold in the last 90 days because when you look up on eBay, that’s what you’re looking at 90 days.

And there are 1000 right now on sale. So 50 divided by 1000 equals 0. 05%. It is an extremely low sell-through rate. Okay? You probably knew that just by the numbers I gave you anyway. But now let’s do something that’s closer together.

Let’s say you sold 2,000 pairs of Old Navy jeans in the last 90 days. Okay, 2,000. And there are 10,000 for sale right now, right?

Doug: On eBay, right?

Trish: Oh yeah, on eBay. I’m sorry. We’re talking about eBay.

Doug: The sell-through rate of this item on eBay versus a bunch of other sellers.

Trish: Correct. So 2,000 on eBay have sold in the last 90 days. Okay. Then you look up how many are available for sale right now, there’s 10, 000. So that’s 0. 2. So that’s a 20 percent sell-through rate. Then we get into the nuance of it all, right? Then that’s where time, money, and inventory space become all important.

All those factors. So for me as a high-volume seller, 20 percent in 90 days, if I am spending a low amount of money, and I have a lot of inventory space. Those might be perfectly good sell-through rates for me. So let’s say I can buy it at Dollar Day. Let’s say I’m buying jeans for a dollar.

We’re going to sell for a 25, 20% sell-through rate in 90 days, so that means we have to sit on them for 5 90-day periods, right? So 90 times 5 equals 450, divided by 3 equals… we’ve got to sit on them for a year and a half. Before they would sell, okay?

Potentially. So for me, if I’m spending 99 cents, I’m okay with that. Now I have a big house. I have a big storage area. I have a lot of inventory. If I lived in an apartment and I have to be really careful about what I sell and I have a very small area, then that sell-through rate might not be okay. Even at 99 cents. Does that make sense?

Doug: Yeah, that makes sense. And that’s really extrapolating it out probably further than a lot of people do, but it makes sense.

Trish: When you look at these items, you just need to figure out what you’re trying to achieve. So if you are somebody who’s trying to achieve the most money in the shortest amount of time, then you want to spend more time shopping, right? And finding the best sell-through rate on your items. So when you go, you want to look and you want to find things that have a higher sell-through rate.

Doug: I saw a metric today on sell-through rates that said 80 is really good. Less than 40 you should take a look at what’s going on, but this kind of, like you said, there’s a lot of factors that go into it, but high level, what’s a good sell-through rate?

Trish: For me, 50 percent or more, I think is an easy buy. Let’s just say everything is that money is not a real factor and space isn’t a real factor. Okay. 50 percent or more. I would buy it all day long. Below 50, I would still buy all day long. I would buy that 20 percent for that kind of, for that kind of cost, I would buy.

Below that, we start to think about if it’s worth it or not for me.

Doug: Okay. And again, there are different kinds of sell-through rates, like you could do like your own stores. And if I’m outsourcing and I’m going to, let’s say I’m out at Granny’s Attic Antiques and they’ve got a sale on DVDs. I could look through the sell-through rate, and see.

Trish: Yeah, absolutely. Look at each DVD. Is it worth it? Those are scannable. And there are some things that are much easier to figure out the sell-through rate than others. Things that would have a barcode, are very easy. You can scan it with your eBay app.

Everybody, I hope, knows that eBay has an app. If you do not know that, download it. Once you have the eBay app, in the search bar, there’s a camera. Hit the camera. You can bring it up. You can either take a picture, and it will search for you. Okay? It will actually search for the item on eBay. Or it will let you do the barcode.

Scan the barcode, and it will bring it up. And then from there, you can also look at the solds. You can look at actives or solds.

Doug: Yeah. And eBay does that because they make money when you sell and they want you to sell.

Trish: Exactly. There is a lot in our community that eBay shut off my store. eBay isn’t giving me traffic. eBay isn’t doing this. eBay isn’t doing that. You are completely right. eBay doesn’t make money unless we make money. The only way eBay is successful is when we’re successful. So they give us tools. They give us resources. Use them. And, be looking at this stuff. I know a lot of us got into this business because we liked the thrill of the hunt and we liked sourcing and we like going out or we’re really into the environment and we like the environment or reuse, recycle, that kind of thing.

Whatever it is that got you into this, it’s still a business. And one of the things you need to know in the business is how to look at the numbers.

Doug: Whatever level of seller you are, you have to think of yourself as a business. You’re doing marketing, you’re sourcing, you’re doing customer service, and you should look at your numbers. Earlier when we were talking about extrapolating out the sell-through rate, not everybody’s going to go as deep as you do, you’ve got a lot of room, but like good example, somebody that’s in an apartment is yeah, I can’t do 10 boxes of sneakers for blah, blah, blah.

That’s something that’s going to move. Speaking of this data, and I know we’re most familiar with, everybody’s got some data. Everybody’s got data. All the marketplaces have it. Obviously, we’re most familiar with eBay. So let’s talk about the Seller Hub a little bit. And, keep in mind, I think this is one of those things that, you can get this data everywhere. It’s just easier in some spots but talk about Seller Hub a little bit.

Trish: Sure. If you are not familiar with Seller Hub, you really should start to be. And for people who are brand new to this, you really want to get involved in the eBay community because these are some of the things that are going to become easier and easier to get with and you can ask somebody a question.

So in Seller Hub, you go to your overview, and from there it will open up and those boxes that you see are movable. So if you’re somebody who uses certain things all the time, you can move them to where it’s easiest for you. But up at the very top across the top, there is Overview, Orders, Listings, Marketing, Store Performance, Payment, Research Reports.

If you go to Performance. I like this tab. It gives you your sales for the last 31 days and gives you the last seven. It gives you the last 90 days. And then it gives you where you are for the year. It also gives you your traffic, listing impressions, click-through rate, selling costs, stuff like that, generalized stuff that you guys should be looking at.

But at the very top, there is a report called Download the Listings Quality Report. If you have not done that, I would suggest doing it. It’s not the same as the sell-through rate, but all of these things go together. And you’re gonna start to see some things when you’re looking really at your numbers, and you’re gonna see what you’re doing and what you’re not doing well when I talked about earlier is I mostly think about sell-through rate on the buy Not on the sell.

I don’t worry about how my store is doing as much as maybe I should but I think about how long is it going to take me to get my money back out of this item. And if I can sit on that money for that while what the quality listings report will do is it will show you where you’re excelling and maybe where you can make up some ground.

And it will tell you like, if you have enough photos, if you’re being searchable on Google, which things are not available on Google, because the quality of the listing isn’t up to Google standards and why and it will also rank you against like stores. So you’re going to be up apples to apples. It’s not comparing me and Doug. I’m a full-time, high-volume seller. Doug has a few totes. We are not going to be the same…

We’re not going to be compared against each other. That wouldn’t be fair. So look at this report. It’s going to give you some really interesting things to think about. And it’s also going to show you, the reason I’m bringing it back to the sell-through rate rate is. It’s also going to show you which categories you’re doing the best in.

When you look at those categories, then maybe think, All right, I’m going to buy more in those categories. I’m already doing well. I already have traction with eBay in these categories.

For some reason, I ended up being the 25th-highest used scarf seller on eBay. It does not sound impressive to me, but for me, that was a really interesting thing. Like, how the heck did that happen? I didn’t even know I sold that many scarves. I didn’t even know scarves were being bought and sold.

So for me, I’m like, all right, maybe I need to double down on scarves a little because I’ve already got some momentum and they’re easy to ship and they’re light and there’s all these great things about them. So I’m going to start looking a little bit more, but without that report, I wouldn’t have thought about it.

And now I’m going to go in and look at the sell-through rate of them and see what it is, should I be looking for silk? Should I be looking for vintage? Am I looking for a heavy winter? So the more information. You can get it for yourself, the better seller you will be.

Doug: And, if you are not familiar with eBay Seller Hub, you really should be. Part of it is, it’s cool. And there’s a lot of information there and it’s got links to a lot of resources, but a lot of reporting, a lot of metrics, seller tools, shortcuts. This should really be like your eBay homepage. You should take a look at this regularly. And then, on Poshmark, you’ve got some metrics over there. My Sales, My Posh stats, Closet Insights, Balance, Sales Report, Inventory Report. Mercari has a seller dashboard as well that has Account Stats, Performance Stats, and Your Sales Report action items.

But, familiarize yourself with these dashboards, but frankly, eBay’s Seller Hub is probably the best among them.

Trish: And eBay is my homepage. When I go to eBay, my Seller Hub is what my home page is. I do think that anybody who uses List Perfectly also has analytics in there. They also have some of this stuff and it will continue to grow as List Perfectly is rolling out new things that will get even more robust. My hope is eventually that List Perfectly will be able to combine Etsy, Poshmark, Mercari, and eBay so we have a true sense of reality, so I would say to you, use the platform that you Make the most money on.

If you’re somebody who makes the most money on Etsy, don’t disregard eBay, but look at their homepage, look at their sell-through rate, and see what you’re doing there. Because of course, all of these people, all of these platforms rather, can have a different audience, a little bit.

eBay is the big dog, eBay does have the most eyes, eBay does have the most listings, and eBay does have the most data. And so I would never discount eBay in any of these calculations.

Doug: And some of this stuff with your sell-through rate is going to apply to your business across the board But it could definitely vary by marketplace.

But let’s go back to high level like high level, what are some big tips for improving the sell-through rate?

Trish: Okay, for me, where you make your money is when you buy a product. You make your money on the buy. You cannot spend yourself out of bad buys, okay? When you buy, that is the most important thing. That’s where all of your focus should be, is, how long will this take to sell? Is this worth it?

What, how much money am I spending? Can I sit on that money for how long it’s going to take to sell? Okay. So for me, you have to decide what that figure is. You have to decide there becomes for me under the $2 sell-through rate is less important to me. Because of the volume game, there are benefits to having some things just go live in your store.

The algorithm likes it. You get a bump. To me, eBay is a machine that you just need to keep giving it gas. If I can have some very low-cost items that are easy to ship, and easy to list I am less worried about the sell-through rate. Now, do I want to buy something with a zero sell-through rate? Of course not, okay? I will worry about the sell-through rate less when it’s under two bucks. When I spend more than two bucks, then I am more worried about what the sell-through rate is. But again, all those things go into it. How much money is it worth? What can I sell it for?

How long am I going to have to sit on it? Things like that. So high level, I think you need to decide what kind of store you’re going to be. Are you going to be a volume store? Are you going to have a high ASP average selling price? So if this item averagely sells for 50 bucks, you’re figuring the sell-through rate on that 50 bucks, you’re figuring out how long that 50 bucks, will take for you to make the 50, and if you are into it for 30 that’s only a 20%, 20 bucks. Like, how long is that worth sitting on for a year and a half? I would say no.

Doug: Yeah. Interesting. My wife would say, listen to Trish, all that stuff stacked up out there, all that crap that she keeps threatening to call one 800 junk. I’m like, no, we can make some money on that.

Trish: Here’s the thing. If you already own it, that is a different discussion than if you’re going out and buying it. If you already own it, people, you need to list it. Do not worry about the sell-through rate. Do not worry about anything. List it. List it. List it. It will do a lot of things for you. It will give velocity to your store. It will add more listings to your store. It will give you more stuff to work with. And then what I do when things have been sitting too long, of course, you put them on sale, you put them on a bigger sale, you put them on a bigger sale, and then I run an auction and I will do an auction on items and all they have to pay is like a dollar plus shipping. Put some shipping on it. Maybe make a dollar or two off of the shipping to cover your cost. Just get it moving. I would much rather sell an item for two or three bucks with somebody paying the shipping than re-donating it. Because even if you make no money, it helps your store.

Doug: That’s an excellent point. Especially if it’s been sitting there for God knows how long. Yeah. That’s mostly in my case.

Trish: It’s my case. I sold something last week that I had for three years.

Doug: All right, I got you beat on those here. Any other tips related to the sell-through rate or any other advice?

Trish: I think you really want to know your numbers. Take a good look at them. Be honest with yourself. And if what you’re buying right now is not serving you, think about what you need to do differently. Decide, do you need a higher ASP? Maybe your ASP is too high. And so it takes longer to sell. So you need to come down a little. It’s not always about going up. Think about your sell-through rate. Think about how fast things are selling in your store. How long it will take you to turn over your store?

Let me just say this. Used clothing, one of the lowest turnovers. It takes a long time. Used clothing is a long-term game. So you are going to very rarely find something used that’s going to sell, immediately. It’s just not the way it works. So maybe used clothing isn’t for you. Maybe you want to go into something else. All of these things can be known by looking at the numbers.

Doug: And, again, definitely see what numbers are there, what’s available in your marketplace, your preferred marketplace. Definitely look at Seller Hub. It’s even just interesting, cool info, but something that you’re going to latch onto. And that’s the thing with these numbers, these metrics are going to help you improve your business.

Trish: Absolutely. And you can’t be afraid of just saying to yourself, that was a bad buy. It’s totally gonna happen. And if it is, just get your money out, or at least some of your money back out. Sell it, make it, don’t sit on something for four years thinking you can get your money out and leave it up. If it’s not gonna sell, if the numbers show you it’s not gonna sell. Put it on sale and get it out.

Doug: There you go. Yeah. And I don’t want to shock you, Trish, but I still learn and make mistakes.

Trish: It’s amazing, Doug. Amazing.

Doug: I’ve made some mistakes. And that’s the thing is, but that’s the thing, it’s gonna happen. Everybody still makes mistakes and you absolutely just learn from ’em. Nothing’s really the end of the world. You’re not going to break the internet.

Trish: And as long as you’re careful, and if you’re somebody like me, you make your money on the buy. You make your money on the buy. You make your money on the buy. Do your research on the buy.

Doug: So great tips. And yeah, so we’ll do more of this stuff…

Trish: And please let us know what you would like to talk about stuff. If you have some weird minutiae, you want to talk about it. Let’s talk about it.

Doug: We enjoy talking about this and we want to help you out.

Trish: Just like eBay. We’re only successful when you’re successful.

Doug: All right. Cool. Thanks, Trish. This was fun. And I will see you next time.

Trish: Thanks, Dougie.


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