The formula
Stock-to-Sales Ratio = Beginning-of-Month Inventory ÷ Sales for the Month
Use a consistent basis — both numbers at retail, or both at cost. If you began March owning $80,000 of inventory (at retail) and sold $20,000 that month, your stock-to-sales ratio was 4.0: you carried four times the month’s sales in opening stock.
Rearrange it to plan inventory
Buyers usually run the formula backwards. You start from a sales plan and a target ratio, and solve for the inventory you should own:
Planned BOM Inventory = Planned Sales × Target Stock-to-Sales Ratio
If you plan $25,000 in April sales and your target ratio for April is 3.5, you should own about $87,500 in inventory on April 1. That target is the spine of the month’s buying plan.
How it feeds open-to-buy
Open-to-buy is simply the gap between the inventory you’re planned to own and the inventory you already own or have on order. The stock-to-sales ratio sets the “planned to own” side. Once it’s set for each month, your remaining open-to-buy falls out automatically — and overspending against it becomes visible immediately rather than at the end of the season. See what open-to-buy is for the full picture.
It’s the inverse of turnover
A high stock-to-sales ratio means you’re carrying a lot of inventory relative to sales — which is slow turns. A low ratio means lean inventory and fast turns. Where weeks of supply looks at a single SKU’s runway, the stock-to-sales ratio works at the category-and-month planning level, which is why it lives inside merchandise plans.
Healthy ranges
- Seasonal categories: the ratio climbs heading into a selling peak (you build stock ahead of demand) and falls sharply as the season sells down.
- Core, year-round goods: a steadier ratio that mirrors a steady turn target.
- Promotional months: a lower ratio can be appropriate when you expect to sell through quickly.
As always, the right number is the one your category’s turn target and lead times justify — not a borrowed benchmark.
Stock-to-sales in Vendee Pro
Vendee Pro’s Open-to-Buy planning lets you set monthly budgets by category and location across a rolling horizon and watch on-order and remaining OTB move in real time as purchase orders flow through — turning the stock-to-sales target into a live spending guardrail rather than a spreadsheet you reconcile after the fact. Reports →
Frequently asked questions
What is the stock-to-sales ratio?
It compares the inventory you hold at the start of a month to the sales you make during that month. A ratio of 4 means you carried four times the month’s sales in beginning inventory.
How do you calculate the stock-to-sales ratio?
Divide beginning-of-month inventory by sales for the month, using the same basis (both at retail or both at cost). Rearranged, planned beginning inventory equals planned sales multiplied by the target ratio.
How does it relate to open-to-buy?
It sets the beginning-of-month inventory target in an open-to-buy plan. Once you know planned sales and the target ratio, you know the inventory you should own at month start, which determines how much OTB budget remains.
What is a good stock-to-sales ratio?
It varies by category and season and is the inverse cousin of turnover — lower ratios mean faster turns. Seasonal categories run higher entering a peak and lower as they sell down.
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