WSSI – Weekly Sales, Stock & Intake

Deborah Dowling

Senior Merchandiser & Data Analyst @The WBE

A WSSI is a vital financial tool used by Top Retailers to plan & monitor sales, stock & profit on a weekly basis.  It ensures that the Retailer is managing stock levels effectively to maximise sales & keep costs to a minimum.  The WSSI helps the Retailer to know when to buy more stock & how much to buy. The WSSI is made up of historical data entered (either automatically by a system or manually) up to the current working week & then the Retailer uses this and knowledge of their business to forecast forward data. 

There are 3 main categories:

  • Sales & Margin (Profit)
  • Markdown (Reductions)
  • Stock – which ultimately shows the retailer how much remaining stock there is to buy & when it is needed (or how much it is overstocked by) This is referred to as Open To Buy (OTB)

And 3 Plans to measure against:

  • Actual/Forecasted – Actual is historical data & forecasted is a continually revised estimate of performance as the business learns from trading throughout the season. By regularly re-forecasting this ensures the Retailer makes changes to decisions to optimise performance. Here are some Examples-

Pull forward/push back intake of stock from suppliers

Create a promotion to increase sales

Reduce selected products’ prices to clear through poor sellers & buy better stock instead

Buy more stock to maintain better than anticipated sales

  • Last Year (can also use the previous year) for comparison
  • Budget (to set targets for the year to measure performance against)

Key Measures

  • Stock Cover = £ Stock / £ Weekly Sales

This is the number of weeks it will take to sell through your stock.  The retailer should have a target number that it should aim to achieve on average (it will fluctuate based on key selling periods & large intake quantities).  This should factor in purchase lead times and how much stock is needed to physically fill shelves in store & meet sales demand.  Last Year can be used as a guide. The retailer should know if they were over or understocked last year based on markdown levels & the factors mentioned above.  A sensible number would be between 8 & 25 weeks depending on Retailer’s format

  • OTB = Budget Stock – Total Actual Stock

Divide the OTB value by the average selling price (ASP) to know how many stock units are left to buy

  • £ Margin = £ Sales/ Vat – Cost

Margin %  = ((£ Sales/ Vat) – £ Cost) / (£ Sales/ Vat)

Profit is what will make a business make or break so it is vital to monitor this throughout the season

Tips for budgeting & forecasting

Last Year’s results are a key guide to forecasting the year ahead.  If the previous year’s results are also available then this is another set of criteria to use.  At the end of each financial year (or even more regularly) it is best practise to complete ‘Lessons Learnt’, which can be used to understand why performance was better or worse than expected.  How did this affect sales & stock?

Examples of factors within that are:

Weather– was it unseasonably hot/cold, dry/wet?

Stock– Did a supplier have issues delivering stock on time? Could Christmas ranges have been launched earlier?

Pricing– Did customers buy more of the higher priced products which were launched this year?

Promotions- Was a promotion better than anticipated? Were there overstocks that needed to be heavily reduced?

Competitor Activity – Did a new competitor open in your town or online platform? Did a competitor change their product range or prices?

Product- Were there some products that had very poor sales and in hindsight should not have been stocked?

Knowledge of the business’  forward strategy

Is there a new pricing structure that will affect sales?

Is there a new product category?

Has a stock been resourced to a more reliable supplier?

Will there be new store openings or additional online platforms?

Is there a marketing campaign?

Is Christmas being launched earlier to potentialize earlier missed sales last year?

Is there more confidence that previous poor selling products have been replaced by better ones?

 

Cumulative Performance

How have measures been performing compared with Last Year & Budget so far & what is left to change?

Is this trend expected to continue? Could external factors change? Will you sustain stock levels on best products?

Has the timing of anything changed? For example- A new product launch with anticipated improved sales could have been delayed which could mean poor sales could be turned around once it arrives

Do you plan to take action that could change performance?

*Tip – set up a WSSI at various group levels (e.g. Candles, Vases, Mirrors) that all add up to a total level to better understand performance.  The Retailer will then have a better idea of OTB at product level.  There will also be a better understanding of performance at product level & therefore it will be easier to identify where action should be taken & make the best business decisions.

Below is an abbreviated version of a WSSI.  To see a larger version please see the Sample Reports here. 

The WBE Company can help set up a WSSI for your business.  We can work with you to set budgets & forecast your sales & stock on a regular basis.  Or if you would like more training on how to use this incredibly valuable tool please contact us for more information.

2 thoughts on “WSSI – Weekly Sales, Stock & Intake”

  1. Michelle Fullerton

    I am currently undertaking a task and need to work out the Actual/forecast TY Sales. How do i work this out on WSSI?

    1. Hi Michelle.
      Thanks for your comment.
      The actual sales will be the sales you have actually achieved. So if your business operates Sunday-Saturday then your weekly sales should be inputted up to 10th October 2020. How you get these will depend on how sales are recorded within your business.

      For forecasted sales you can use the examples in the blog above under:
      ‘last year’s results’
      ‘knowledge of the business’ forward strategy’
      ‘cumulative performance’

      Other ways to help forecast future sales could be to work bottom up. This would involve creating a forecast at product level and add up the total of all products sales to work out the category or total sales. Remember these sales should be regularly re-forecasted to reflect more recent trade or trends in the marketplace. To achieve this you can again use the tips the blog.
      If there are new products you can use a ‘like line’, which is the most similar product you’ve sold before. However, this can be time-consuming if you have a lot of products, so if you don’t have the available resources another method is ‘building blocks’.
      Building blocks is where you use last year’s data to build your anticipated sales. You add to it or take away it based on factors that will impact sales. You can estimate the impact by looking at historical outcomes (what % increase/decrease have you had in a similar scenario) or guestimate using the knowledge you have of your business and the market. You could create a customer survey, or use your invaluable intuition
      Here is a very basic scenario:
      You sold one product last year, with sales of £100 per week. This year you are going to launch the same product in a different colour. You guestimate that 40% of people didn’t buy the original product because of it’s colour, but they will buy your new one. Therefore, your sales would be £140 per week and +40% on last year
      The following year you introduce green, but you think this will mostly sell at Christmas. However, when it does it will take away sales from your original 2 colours. There are no other factors in this scenario that could alter sales and you have the same amount of new customers that all make one time purchases. Therefore, sales stay the same as last year, until you launch green in October, and they change:
      year 1
      pink =£100. Total = £100
      year 2
      pink= £100
      blue=£40 Total = £140
      year 3
      pink (declines by £35 per week when green arrives) now =£65
      blue (declines by £15 per week when green arrives) now = £25
      green = £50 Total = £140
      Therefore, October- December will be +40% on last year

      I hope this helps. It takes time to build confidence in forecasting skills. By looking at historical data and regularly reviewing performance, evaluating reasons for performance and the impact of decisions made will help you.
      This year is likely to have changed for most businesses, so you will need to think about the impact of the current situation and have different scenarios for how this could evolve. That way you can best prepare your business and have contingency plans in place.
      I hope that’s helped. Feel free to comment further or you can email information@thewbe.co.uk if you would like some advice that’s more specific to the type of business you work in
      Many Thanks
      Deb

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