Retail math formulas for apparel planning
Retail math is the small set of formulas planners use to turn sales, stock, cost, and margin into decisions — sell-through, gross margin, markdown, GMROI, inventory turnover, weeks of supply, open-to-buy, and more. This library gives each formula in plain terms with a worked example and, where one exists, a calculator to run the numbers.
Use it as a reference while building plans, or jump straight to the matching calculator on each card.
Sell-through %
sell-through % = units sold ÷ units received × 100
The share of what you took in that has actually sold. A read on how well demand is keeping up with stock.
Example: Sold 320 of 500 received → 320 ÷ 500 × 100 = 64% sell-through.
Sell-through calculator →Gross margin %
gross margin % = (net sales − COGS) ÷ net sales × 100
The portion of sales left after the cost of goods sold — the headline profitability of what you sell.
Example: Sales £100k, COGS £55k → (100 − 55) ÷ 100 × 100 = 45% gross margin.
Markdown %
markdown % = markdown value ÷ net sales × 100
How much of your sales value was given up to price reductions. Rising markdown signals over-buying or weak sell-through.
Example: Markdowns £12k on net sales of £80k → 12 ÷ 80 × 100 = 15% markdown.
Markdown calculator →GMROI
GMROI = gross margin £ ÷ average inventory cost
Gross margin return on inventory investment — the margin earned for every unit of cost tied up in stock.
Example: Gross margin £450k, average inventory cost £300k → 450 ÷ 300 = 1.5 GMROI.
GMROI calculator →Inventory turnover
inventory turnover = COGS ÷ average inventory (at cost)
How many times stock sells through and is replaced over a period. Higher turnover means capital is working harder.
Example: COGS £600k, average inventory £150k → 600 ÷ 150 = 4 turns.
Inventory turnover calculator →Average inventory
average inventory = (opening stock + closing stock) ÷ 2
A simple mean of stock across a period, used as the denominator for turnover and GMROI.
Example: Opening £180k, closing £120k → (180 + 120) ÷ 2 = £150k average inventory.
Weeks of supply
weeks of supply = stock on hand ÷ average weekly sales
How many weeks the current stock would last at the recent rate of sale — the core cover metric on a WSSI.
Example: Stock 2,400 units, selling 300 per week → 2,400 ÷ 300 = 8 weeks of supply.
Weeks of supply calculator →Stock-to-sales ratio
stock-to-sales ratio = beginning-of-period stock ÷ sales for the period
The ratio of stock held to sales, used to set planned stock levels for a period.
Example: Beginning stock £200k, monthly sales £50k → 200 ÷ 50 = 4.0 stock-to-sales ratio.
Open-to-buy
OTB = planned sales + planned closing stock + planned markdowns − opening stock − on-order
The amount you can still receive in a period without exceeding plan — the buying guardrail.
Example: Planned sales £120k + closing £90k + markdowns £10k − opening £80k − on-order £60k = £80k OTB.
Open-to-buy calculator →Fill rate
fill rate = units shipped ÷ units ordered × 100
The share of an order a supplier actually delivered — a measure of supply reliability against the buy plan.
Example: Shipped 940 of 1,000 ordered → 940 ÷ 1,000 × 100 = 94% fill rate.
On-time delivery %
on-time delivery % = deliveries on or before due date ÷ total deliveries × 100
The share of deliveries that landed when planned. Late intake changes cover and pushes back the plan.
Example: 85 of 100 POs landed on time → 85 ÷ 100 × 100 = 85% on-time delivery.
Average unit retail (AUR)
AUR = net sales ÷ units sold
The average price each unit actually sold for, after markdowns — a read on realised pricing.
Example: Net sales £45k on 1,500 units → 45,000 ÷ 1,500 = £30 AUR.
Average unit cost (AUC)
AUC = total cost of goods ÷ units
The average landed cost per unit, used to derive margin and value inventory.
Example: Cost £18k for 1,200 units → 18,000 ÷ 1,200 = £15 AUC.
Frequently asked questions
- What is the most important retail math formula for apparel planners?
- There is no single one, but sell-through %, weeks of supply, gross margin %, and open-to-buy do most of the day-to-day work. Sell-through and weeks of supply tell you how stock is moving; margin and OTB keep buying inside the financial plan.
- How is GMROI different from gross margin %?
- Gross margin % measures profitability as a share of sales. GMROI measures the gross margin earned per unit of inventory cost, so it rewards selling margin quickly off a lean stock position. Two products can share the same margin % but very different GMROI if one turns far faster than the other.
- What is the open-to-buy formula?
- Open-to-buy = planned sales + planned closing stock + planned markdowns − opening stock − stock on order. It returns the budget left to receive in a period without exceeding the inventory plan, in value or units.
- Are these formulas different for apparel than for general retail?
- The formulas are the same, but apparel adds layers — sizing, colour options, and seasonality — that make the inputs more granular. A size curve, for example, sits underneath the buy quantities these formulas roll up, which is why apparel teams pair retail math with size-level planning.
- Sell-through %, weeks of supply, gross margin %, and open-to-buy do most of the day-to-day planning work.
- GMROI and inventory turnover show how hard inventory cost is working, not just margin as a share of sales.
- Each formula here comes with a worked example so the inputs and outputs are unambiguous.
- Free calculators run sell-through, GMROI, markdown, turnover, weeks of supply, OTB, and more.
- In apparel, size curves sit underneath the buy quantities these formulas roll up, so pair retail math with size-level planning.
Use the free calculators to run any of these formulas, or see connected planning in RetailNorthstar — from line plan to production, one workflow across merchandising, design, buying, sourcing, and operations.
Run any formula instantly with the free calculators.