Fill Rate: Why It’s A Metric That Deserves Your Attention
It’s always important having metrics in place that allow you to measure the success of your company. On the wholesale side, fill rate is one of those metrics that allow you to do just that. As shown above, for wholesalers, knowing your fill rate is very important.
So, what does fill rate represent? Generally speaking, fill rate is the percentage of your orders that ship in full, among the first shipments, shipped on time as a percentage of all your orders. It measures just how accurate you serviced your customers. Fill rate is an important pillar in your order management process.
All things considered, your fill rate is a key metric that has a big impact on your relationship with all your retailers. After all, the goal is always 100 percent success. With a high fill rate, retailers are likely to choose you over your competition. Correspondingly, a high fill rate will lead to more trust for your company and new opportunities for your business.
Fill rate is only one important metric you can use to measure wholesale sales success. Other key metrics wholesalers know is
- Inventory Turn
- Order To Cash
- Order Throughput Time
- Visit To Order Time
Essentially, fill rate is all about getting your customers what they want.
How To Understand Fill Rate
As we inch closer to 2019, the leverage wholesalers can have over their competition is huge. Wholesalers that have real-time inventory data and understand how to analyze it will always have a big advantage over wholesalers that don’t.
Automation and order management software can give you the real-time results you need to make immediate decisions. You are able to see when stock is out or low. To see if orders will go out on time or if they will be delayed. It can influence a decision between your company and a retailer. Overall, real-time inventory results are important to making the right decisions.
Your relationship with your retailers are extremely important. With your expectations and your retailers expectations, often common ground must be found. Start by always striving to ensure there’s enough product in stock and on shelves. But what happens when a product isn’t available? A shipment is delayed? You need open communications with your retailers and the right expectations need to be made.
Additional Sales Cycles
You already know retailers don’t want another sales cycle. If products don’t ship, retailers don’t want the hassle of waiting or having to re-order. The wholesaler needs to fix the order right away.
This is another reason having the right order management system in place is needed.
Offering Alternative Products
There may come a time when demand exceeds all expectations and your retailer needs new product. What would happen if you didn’t have that product? Rather than losing out on an order, it’s smart to have alternate products that can ship when needed.
Keeping Shelves Full
It’s no secret, retailers want their shelves stocked and product turning. There’s a lot of planning that goes on behind the scenes for retailers. If you’re not meeting their goals, you can lose that retailer or they may not place an order with you the next time around.
Again, you want open communications with your retailers, you want to meet expectations and you want to assist with planning.
You want to make sure your team knows exactly how much inventory is available at any given moment. What you don’t want is reps selling inventory that you don’t have. In short, your whole team needs to be on the same page.
Your sales team, sales representatives, they need access to real-time results so they can make proper decisions.
What’s The Best Fill Rate?
Your company aims for 100 percent of course. In brief, you can rely on your retailers for feedback on your execution. You likely have a good idea of how you’ve been doing up to this point anyway.
With that said, it’s your responsibility to audit and analyze your your fill rate. It should be a priority.
As for industry averages, the companies that provide the top fill rates are often at 98 percent or higher. Average fill rate should be around 94-95 percent.
Once you know what your fill rate is, you can begin making decisions to improve it.
How To Improve Fill Rate
One of the best ways to improve your fill rate is by giving your team access to real-time data. This is what we’ve seen improve performance time and time again.
Automation, inventory software, sales order management software, these tools give you the ability to have real-time access to the data you need to make important decisions. Data is no good if you don’t have someone to analyze it and make appropriate decisions.
In any event, you need to power your team and reps with the right tools so they can perform at a high level time and time again.
This is why having one central platform to perform all of your fulfillment, ordering and shipping is so important.