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.

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