Blog · Board and management reporting · Consumer goods
Merchandising analytics connects SKU sales, gross margin, and inventory movement by store. Use a worked commercial review to distinguish a strong assortment from misplaced stock and to check the figures before acting.
Merchandising analytics compares SKU sales, gross margin, and inventory movement by location so a commercial team can decide what to stock, where to stock it, and which items need review. The useful result is a reconciled comparison of profit and stock movement for the same products and period.
A product with strong revenue can tie up stock in the wrong store. A product with modest revenue can earn an attractive margin but need a different assortment role. You need dollars and units together to distinguish those situations.
Start with a specific decision: an assortment review, a replenishment adjustment, a pricing discussion, or a possible transfer. Select the stores, selling period, and comparable SKU packs before comparing performance.
For a consumer packaged goods brand, distinguish retailer sell-out from the brand's shipments into the retailer. The sell-in against sell-out review owns that comparison. Here the question is what sold to shoppers and what remained in the stores.
Use net sales after discounts and returns. The Census Bureau defines retail sales net of refunds and allowances and excludes sales taxes collected directly for tax agencies. Your commercial review should make its own inclusions explicit and apply them consistently to each location.
Set the cost basis with finance. A retailer's margin on store sales and a brand's margin on shipments have different revenue and cost bases. Do not subtract the brand's production costs from the retailer's selling revenue and call the result either company's gross margin.
The sales file needs SKU, store, date, units, gross merchandise sales, discounts, returns, and net sales. The cost file needs cost of goods sold for those same sales. The inventory files need opening units, receipts, closing units, and separate adjustment reasons.
Use a consistent SKU and pack size across files. Cases received and individual units sold need an approved conversion before reconciliation. Separate transfers from receipts purchased externally, and identify whether returned merchandise reenters sellable stock.
The dollar measure is:
Gross profit = Net sales − Cost of goods sold
Gross margin = Gross profit / Net sales
The IRS explanation of gross profit likewise subtracts returns and allowances from receipts before deducting cost of goods sold. For the detailed cost boundary and weighted-total method, use gross profit margin.
Use the cost of the units sold, not all purchases received. Goods still on the shelf remain inventory under the defined accounting treatment. A large delivery should not by itself make a selling SKU appear unprofitable.
A fictional US packaged-food retailer reviews October 2026. SKU A is a snack pack and SKU B a cereal pack. The following are net unit sales; the example has no returns, transfers, or inventory adjustments. Dollar values use USD, and percentages are rounded to one decimal place.
| SKU | Store | Units sold | Net sales (USD) | COGS (USD) | Gross profit (USD) | Gross margin |
|---|---|---|---|---|---|---|
| A | East | 160 | 800 | 480 | 320 | 40.0% |
| A | West | 60 | 300 | 180 | 120 | 40.0% |
| B | East | 80 | 640 | 400 | 240 | 37.5% |
| B | West | 90 | 720 | 450 | 270 | 37.5% |
| Total | Both | 390 | 2,460 | 1,510 | 950 | 38.6% |
For A at East, 800 − 480 = $320 gross profit, and 320 / 800 = 40.0%. For B at West, 720 − 450 = $270, and 270 / 720 = 37.5%.
Prove the company result two ways. The row profits sum to 320 + 120 + 240 + 270 = $950. Total net sales less total cost also equals 2,460 − 1,510 = $950. Divide the totals for the overall margin: 950 / 2,460 = 38.6% after rounding. Do not average the displayed row percentages.
For this review, available units mean opening stock plus receipts during the month. This is a period stock-movement measure; it does not show which days inventory was available.
Closing units = Opening units + Receipts − Units sold + Net adjustments
Period sell-through = Units sold / (Opening units + Receipts)
| SKU | Store | Opening units | Receipts | Available units | Units sold | Net adjustments | Closing units | Sell-through |
|---|---|---|---|---|---|---|---|---|
| A | East | 100 | 100 | 200 | 160 | 0 | 40 | 80.0% |
| A | West | 80 | 40 | 120 | 60 | 0 | 60 | 50.0% |
| B | East | 100 | 100 | 200 | 80 | 0 | 120 | 40.0% |
| B | West | 60 | 40 | 100 | 90 | 0 | 10 | 90.0% |
| Total | Both | 340 | 280 | 620 | 390 | 0 | 230 | 62.9% |
East's B balance is 100 + 100 − 80 + 0 = 120 units. Its sell-through is 80 / 200 = 40.0%. West's B sells 90 / 100 = 90.0% and ends with 10 units.
The total control is 340 + 280 − 390 = 230 units. The combined sell-through, 390 / 620 = 62.9%, is a control total for this file, not a reason to treat unlike product packs as economically equivalent. Check the closing balances against the stock report and explain every adjustment.
B has the same gross margin in both stores, but very different stock movement. Review allocation and transfer economics before removing B from the assortment. East has more remaining stock while West may need replenishment; receipt dates and stockout records can confirm whether the observed pattern is persistent.
A earns the higher margin, yet that does not justify filling every location with it. West sells a smaller share of its available A stock. Ask whether receipts arrived late, the store sells a different basket, or the pack has a different local role. Use weeks of cover for one SKU and retailer for the separate forward stock question.
The merchandising manager owns assortment and allocation recommendations. Supply planning checks availability and delivery timing. Finance confirms net revenue, cost, and the profit effect of proposed discounts. Store managers explain local exceptions. Record a decision with an owner and review date rather than leaving a weak row unexplained.
Bring a sample of your own SKU sales, cost, receipts, and inventory files, with the period and stock rules stated. Covirage maps the columns, and its tools compute and check the margin and stock comparisons; the external AI model explains the differences with every figure traced to its rows. Create a free Covirage account and set up your business with your own commercial files.
See Covirage for CPG brands for the supporting industry review.
Use item-level sales and returns, the matching cost of goods sold, opening and closing inventory, receipts, and stock adjustments. Each file needs a consistent SKU, location, period, and unit of measure. Keep product and pack-size descriptions available to check mappings.
High sell-through shows that a large share of the defined available stock sold. It can also accompany stockouts or an allocation that was too small. Review availability, margin, replenishment timing, and missed selling days before calling it a success.
Merchandising analytics examines commercial records such as sales, margins, assortment, and stock movement. Visual merchandising concerns how products are presented. Transaction exports can show an observed sales difference, but cannot by themselves establish that a display caused it.
Use retailer sales for a review of shopper demand at the store. Brand shipments measure sales into the retailer and may arrive before products sell through. Keep both measures, label them clearly, and reconcile them through inventory rather than treating them as interchangeable.