What is sales velocity, and how do I calculate it?
The short answer: Sales velocity is volume over time, like cases per week at one account or cases per account per month in a market. Divide the cases sold by the length of the period. It's only useful if you're clear about which cases you're counting and which accounts.
At one account
An account buys 8 cases over a 4-week period: 8 ÷ 4 = 2 cases per week.
Calendar months aren't exactly four weeks, so for close comparisons use days. For a 31-day month: 8 ÷ 31 × 7 = about 1.8 cases per week.
Across a market
A market does 120 cases across 30 buying accounts in 4 weeks: 120 ÷ 30 ÷ 4 = 1 case per account per week.
Decide what counts as a "buying account" and keep that definition every month. The simplest is any account that ordered during the period. Change the definition and the number changes even if nothing else did.
Watch the average
An average can hide a lot. One bar doing 40 cases and twenty accounts doing one each looks fine on paper, but it's a very different business than twenty accounts doing three each. Look at the accounts underneath before you celebrate or panic.
Depletion velocity vs. shelf velocity
Depletion velocity is how fast accounts are buying from your distributor. It isn't how fast bottles leave the shelf. An account can order on a steady cycle and still be sitting on stock. Shelf velocity takes retail scan data.
Use it to ask better questions
Which accounts are speeding up? Which products are moving faster in some markets than others? Is a market growing because accounts are reordering, or just because you opened new ones?
Want the long version? Read Reorder Velocity: Measuring Account Health Between Monthly Reports in Field Notes.