Definition
Sales velocity is a term describing the rate at which dollars or units pass through in a given time (basically, sales divided by distribution) and measures how well a brand sells when it is available.
Two major sales velocity measures are sales per point of distribution (SPPD) and sales per million (sales per $MM).[1]
Construction
Sales per point of distribution ($) = Sales ($) ÷ % ACV distribution
Sales per million ($) = Sales ($) ÷ [% ACV distribution x (Market ACV ÷ 1,000,000)]
References
- ^ CPG Data Tip Sheet. Velocity: How Well Your Product REALLY Sells.