Learn more about the metrics and key productivity indicators displayed on WorkstandIQ dashboards.
Sales Terms
Revenue
- The income generated from sales transactions before the cost of goods and other expenses are considered.
Profit Margin
- A product’s sale price minus its cost.
- This number will be different for each product and is usually expressed as a percentage.
- If a product costs $60, but you sold it for $100, you made $40, or a 40% margin.
Gross Profit Margin
- Profit margin averaged across all the products sold.
Conversion Rate
- The percentage of visitors who buy something at your store.
- If 2,000 people visit your store in a week, but 400 buy, your conversion rate is 20%.
Average Transaction Value (ATV)
- The average amount your customers are spending per transaction, and is expressed as a dollar amount.
Units Per Transaction (UPT)
- The average number of items your customers are buying per transaction, and is expressed as a quantity.
Inventory Terms
Inventory Management
- The system a retailer uses to make sure the right inventory is in the right place, at the right time, and in the right quantity.
- As a part of this, the retailer is making sure that ordering, shipping, handling, and related costs are kept under control.
Cost of Goods Sold (COGS)
- The direct cost, in dollars, of a product or products in a retailer's inventory.
Average Inventory at Cost
- The average amount of inventory on hand over the course of a year, calculated in dollars
Procurement
- The process of sourcing, negotiating, and strategically selecting goods for your retail shop.
Purchase Order
- A document used to communicate a purchase to an employer. It can be used to approve, track, and process purchases as well.
- A purchase order usually indicates types, quantities, and agreed prices for products or services, as well as delivery dates.
Turns
- The number of times a product completes a cycle of moving from warehouse to sales floor to checkout in a year.
Markdowns
- Unlike a promotional sale, a markdown is a permanent price reduction due to a product’s inability to be sold at its original price to move the inventory and make room for new products.
Dead Stock
- Sometimes called dusty inventory, dead stock is merchandise that has never been sold or has been in stock for a while.
- This could be because a particular item is just seasonal, but other times it’s because the product simply isn’t in demand.
Shrinkage
- The difference between the amount of stock that a retailer has on the books and the actual stock available.
- Its inventory loss is due to employee theft, shoplifting, administrative error, vendor fraud, or damage.
Lot Size
- Also called order quantity, this is the quantity of an item you order for delivery on a specific date.
Inventory Turnover
- The average number of times that inventory on hand is sold or used during a specific time period.
- Generally, a high stock turn is good — it means you’re selling a lot without stocking too much.
- To calculate it, divide the cost of goods sold by the average inventory.
Quantity on Hand (QOH)
- The amount of physical inventory that a retailer has in possession.
Quantity on Order (QOO)
- The amount of inventory in open purchase orders or manufacturing orders.
Quantity Discount
- An incentive offered to a buyer to purchase a certain quantity for a decreased cost per unit.
Carrying Cost
- Also known as holding cost is primarily the cost associated with inventory investment and storage.