We’ve been researching sales decay for limited shelf life product in order to determine best practice for reporting this – especially in the small business sector in which we play. Our interest is because sales decay, for products with a seven day shelf life like magazines, is something about which there is plenty of talk but little in the way of facts.
The rule of thumb is that you need to have sold 80% of your stock by the end of day three to achieve a sell out and that, in fact, you’ll sell 50% day 1, 20% day 2 and 10% day 3.
In one of our key marketplaces we’ve found people making decisions based on what they think about sales decay as opposed to what they know. In fact, they know nothing.
There is early research indicating that enough of what people think is wrong for there to be value in new research. This early research is allowing us to compare similar businesses in different circumstances and thereby uncover opportunities.
Hence our interest in decay.
It’s surprising to me that that not much effort is being expended by independent software companies in the small business sector in reporting on sales decay.
It seems that by analysing decay trends we might be able to help our clients find new opportunities to slow the decay.