#23 Sales Velocity

Picture this: you’re cruising down a highway on a sunny afternoon, and you glance at your speedometer. It’s telling you how fast you’re going at that moment—essential for avoiding tickets and reaching your destination on time. Well, sales velocity works much the same way for your products. It gives you real-time insight into how quickly items are selling, so you can spot what’s in demand, what’s lagging, and how to keep your business humming along smoothly.

What is Sales Velocity?

In physics, velocity tracks speed and direction—like a car at 55 mph heading east. In retail, sales velocity basically tells you how fast items fly off the shelves.

We often express this as “units sold per day” over a certain period, like the past 7 or 30 days. If you’ve heard the terms “inventory velocity” or “average daily sales,” they’re talking about the same thing.

Here’s the straightforward formula:

Sales Velocity = Items Sold in last X days / X        

Sales Velocity = Items Sold in last X days / X

Example: Let’s say you moved 315 units of “Shine Lip Tint” in the last 7 days.

315 items / 7 days = 45 units per day        

So, your daily sales velocity is 45. That means your Shine Lip Tint is currently selling at a brisk pace of 45 items a day. Think of it like a speedometer reading in your store—if velocity dips too low or surges too high, it’s a signal to adjust your strategy.

Combine that insight with the fact that there are just 300 Shine Lip Tint units left on stock, and it’s clear you need to reorder ASAP before you run dry on a high-demand winner.

Sales Velocity in RetentionX

RetentionX calculates sales velocity automatically for all your products and variants, saving you the hassle of manual math.

By default, it’s based on the past 7 days, but you can customize that timeframe if you need a broader or narrower window.

Why Sales Velocity Matters

1. Spot Your Winners & Losers

Whether you manage a massive catalog or a handful of hero products, monitoring sales velocity helps you separate the standouts from the stragglers. If something’s flying off the shelves, maybe it deserves an extra social ad push. If it’s barely budging, bundle it or try a flash sale.

2. Smarter Inventory Management

Sales velocity is your secret weapon for avoiding both out-of-stocks and overstocking. If a product’s speed is ramping up, you’ll know to reorder before you face empty shelves. If it’s slowing to a crawl, you can hold off on reorders and reduce potential carrying costs.

3. Sharper Demand Forecasting

Keeping an eye on velocity—especially across seasons—allows you to predict future demand patterns. This means you’re not just reacting to sales trends; you’re planning for them.

4. Improved Cash Flow & Profitability

Fast-selling products bring in cash quickly and minimize how long your money is tied up in inventory. That’s vital for paying the bills, investing in new products, and scaling your brand.

5. Fine-Tune Marketing & Promotions

Take your high-velocity items and amplify them. Boost your ad spend or feature them in a special promotion. For the slow sellers, consider pairing them with a popular product or offering a discount to tempt buyers.

Wrapping Up

Sales velocity is the pulse of your store—telling you in near real-time which products are sprinting ahead and which could use a boost. When you align your strategy around these insights—whether it’s marketing more aggressively, adjusting prices, or managing stock levels—you’ll drive higher profits and keep your customers delighted.

If you enjoyed this article and want to implement this mindset for your brand, don't hesitate to book a call with me below.

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That’s it for this edition!

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Cheers,

Alex