A first order tests whether you can deliver. A second order tests whether the thing sells — and the retailer answers that with numbers you did not supply, from a system you cannot log into. Between the two purchase orders sit four arithmetic questions: what sold, when to reorder, what the last delivery cost you in deductions, and what the category review will do with your facings.
The retail-readiness page covers the delivery itself: OTIF, MABD, chargebacks and the planogram. This page is the one after it. It assumes the pallet arrived and nobody was fined, and it works through what actually decides whether a reorder is raised — including the two figures most brands never compute and then meet at the worst possible moment: weeks of cover, and the cash gap between the deposit and the retailer's payment.
What actually changes between the first order and the second
The first purchase order is a procurement decision. The second is a merchandising decision, taken by a different person against a different measure. The buyer who approved the listing is judged on margin and on sales per metre of shelf, not on how straightforward you were to work with. Once your pallet is received, your SKU stops being a new line and becomes a row in a category report, sitting beside an incumbent with three years of history and an own-label alternative that the retailer's own team is being encouraged to grow.
Three things follow, and all three are uncomfortable. The evidence is already in their system rather than in your marketing: sell-through, weeks of cover, days out of stock, markdowns and returns. The comparison is against the same weeks last period rather than against your promise, which means a good story about a bad number does not survive the meeting. And the decision happens on a calendar — category reviews run on a cycle, usually tied to a season or a financial period — so a reorder raised outside that cycle is a favour, while one raised inside it is a plan.
The distinction that matters operationally is the one supply-chain literature draws between cycle stock, safety stock and in-transit inventory [Chopra & Meindl, 2016]. A brand that has only ever thought about the first order tends to hold one number and call it stock. The retailer reads three, and the one that decides your facings is not the one you have been watching.
Sell-through: the only number the second order is decided on
Sell-through is units sold divided by units received, over the same window. It is not units shipped to the retailer — that is sell-in, and the two diverge the moment the retailer loads a distribution centre that serves forty stores. Sell-in can look excellent for a quarter after a listing; sell-through is what the shelf actually did, and it is what the buyer will quote back to you.
The arithmetic is trivial and that is the point. On a 600-unit first order measured over 12 weeks, 360 units sold is 60% sell-through, 30 units a week, and 240 units left. Nothing in that sentence required a data platform, which is why there is no excuse for arriving at a review without it.
The percentage is not the problem. What the retailer sees is how many weeks of shelf are still ahead of it.
The same 600-unit order, three velocities
At 40% sell-through the same order is 18 weeks of stock — six times the cover of a device selling at 80%.
What makes sell-through useful rather than decorative is that it converts directly into a date. The percentage is a description of the past; weeks of cover is a forecast of how long the shelf stays credible, and the second number is the one that changes a buyer's behaviour.
Weeks of cover: turning a percentage into a deadline
Weeks of cover is units on hand divided by average weekly sales — written as cover-weeks on most merchandising reports, which is the same division under a shorter name. It is the same information as sell-through, expressed as time, and time is what a category manager can act on. Eight weeks of cover on a chain that takes eleven weeks to replenish is a stockout with a schedule; twenty-two weeks of cover on the same product is a markdown waiting for a date.
The number that matters is not cover on its own but cover against your own replenishment lead time. Below the lead time, you are already late and the choice is air freight or a gap on the shelf. Above it by a wide margin, the retailer reads slow stock — and slow stock loses facings to a faster neighbour at the review, because shelf space is the one resource the buyer controls outright. The defensible band sits just above your lead time, which on a sea-freight chain from China is a narrow target and one of the honest arguments for consolidating a first and second order into one shipment.
One caution about the measurement window. If the first eight weeks included the listing promotion and the second four did not, a 12-week average describes neither. Split the window, and use the post-promotion rate to decide the reorder: the promotion bought trial, not velocity, and velocity is what buys the third order.
The reorder point is a property of your freight, not your sales
A reorder point is the quantity that has to be left in stock when you release the next order: the weekly rate multiplied by the lead time in weeks, plus whatever safety stock you have decided to carry. It is not a hunch about when the shelf looks empty, and it is not a number you can borrow from another brand, because it is built entirely out of your own lead time.
The reorder point is not a preference. It is your sales rate multiplied by the time it takes you to restock.
What has to be left on the shelf when you press go
Same product, same sales rate: moving from sea to air takes 192 units off the reorder point.
Read that figure the other way round and it becomes a purchasing argument. The same device, selling at the same rate, needs 321 units in stock at the trigger on a sea-freight chain and 129 on air. The difference is not a discount you can negotiate; it is cash you do not have to tie up, and it is the reason a brand with a short runway sometimes pays more per unit for a faster route and is right to. The comparison is not unit cost against unit cost — it is unit cost against the working capital and the stockout risk the slower route imposes.
Safety stock sits on top and has to be a decision rather than a habit. Size it against the variability you can actually observe — how often the ocean leg slips, how often a carton count comes up short — not against a round number. A safety stock of two weeks is neither cautious nor reckless; it is either enough for your observed variation or it is not, and you only find out by counting the misses.
The second order inherits the first order's deduction file
Chargebacks feel like a first-order problem because that is when they are novel. They are actually a repeat-order problem, because the checks that prevented them are the first thing to lapse once the process seems to work. On the first order somebody verified the ship notice by hand and photographed the pallet. On the second, the order is three times the size, the same percentage failure applies, and nobody photographs anything.
A chargeback is not a one-off penalty. It is a recurring line in the unit cost, and it grows with the order.
What a 3% deduction costs at three order sizes
The same rate: $120 on a first order, $900 on a reorder. The percentage does not change; the decision it funds does.
The cost is arithmetic and it scales with the order, which is the opposite of what a supplier expects from a repeat customer. Two disciplines keep it down, and neither is expensive. The first is that the four causes — a missing or mismatched advance ship notice, an unreadable pallet label, a carton count that disagrees with the purchase order, and a missed receiving window — are the same four every time, so they can be checked by a fixed list rather than by attention. The second is that the remittance advice is reconciled against the purchase order and the receipt the week it arrives, because a deduction disputed inside the window is a claim and one discovered a quarter later is a write-off.
It is worth saying plainly what this costs in the unit economics: a 3% deduction on a repeat order is the same order of magnitude as the volume discount that made the bigger order attractive. A brand that negotiates two points off the unit price and loses three points to deductions has bought a spreadsheet, not a margin.
What the category review actually looks at
A category review is the meeting where facings are reassigned. It is not a performance appraisal of your brand; it is a comparison of every SKU competing for the same bay, and it is decided on ratios rather than totals. Two carry most of the weight. Inventory turnover is the cost of goods sold divided by average inventory at cost — how many times the shelf's stock is replaced in a year. Gross margin return on inventory investment is gross margin per unit times units sold, divided by the average inventory at cost — the margin each currency unit of inventory earns.
Worked, because the ratios are usually quoted and rarely computed: a device with $6 of gross margin per unit selling 1,200 units a year generates $7,200 of gross margin, and an average inventory of 200 units at $8.50 costs $1,700 to hold. That is a GMROI of 4.2. The same device with 400 units of average inventory — twice the cover, same sales — is 2.1, and it loses the bay to a rival at 3.0 even though it outsells it. This is the mechanism behind the advice in the previous section: cover that is too generous is not prudence, it is a lower ratio.
None of that is negotiable in the meeting, and the preparation is therefore done in the four weeks before it. One number on the retailer's side decides whether a reorder is funded at all: open-to-buy, the budget left in the period once what is already on order and on hand is counted. A buyer who wants your SKU and has no open-to-buy will not place the order this quarter, and no amount of sell-through arithmetic changes that. The table below is the split between what the review examines and what you can actually put in front of it.
| What the review examines | Where the number comes from | What you can do about it before the meeting |
|---|---|---|
| Sales per facing | Their POS data, divided by the facings in the planogram | Confirm the facing count in writing; a bay that holds six of your packs at five facings is a different ratio |
| Weeks of cover | Their inventory position against their own forecast | Arrive with your own calculation and the measurement window you used — the argument moves to the inputs |
| Days out of stock | Their receipt and shelf-availability data | Give the replenishment lead time in writing; a stockout attributed to your delivery is a supply argument you can win with dates |
| Markdown and returns | Their promotions and their returns ledger | Separate listing-promotion sales from base sales, or the base velocity looks worse than it is |
| Compliance and deductions | Their vendor scorecard | Bring the reconciled deduction file: a resolved deduction should not still be scoring against you |
The one thing a first-time brand cannot supply is history, and that is what the review is actually buying. A SKU with one delivery has one data point; the incumbent has twelve. The honest way to answer that is not a longer presentation but a narrower ask: fewer facings, a defined trial period, and a velocity commitment you can meet. It also helps to arrive with the catalogue specification index open, because the technical questions in a category review are usually about the shelf rather than the device.
The cash gap that ends more reorders than demand does
Every figure on this page so far has been about whether the product sells. This one is about whether you can afford the answer. A retail order is paid for months before it is paid back, and the gap widens exactly when the order grows — which is when a brand is least able to absorb it.
Demand decides whether there is a second order. The cash gap decides whether you can fund it.
A hundred and five days of your cash in the loop
From purchase order to cash: 105 days, with the first payment out of your account on day zero.
Read the days rather than the totals. The deposit leaves on day zero, the balance on day 45, and the retailer pays on day 105, thirty days after a receipt that itself arrived seventy-five days after the order. For three and a half months the goods are paid for, in transit, then on a shelf, then sold — and none of that money is yours yet. A second order twice the size of the first doubles the amount committed during that window while the return date stays where it was.
This is the honest argument against trading a bigger minimum for a better unit price, and it is the argument the vendor will not make for you. The discount is real; so is the financing cost of the extra run, and on a 105-day cycle a 15% unit-price improvement can be entirely consumed by holding twice the stock for three extra months. Model the cash first, then the price — and if the numbers are close, take the smaller run and place the repeat order sooner, because a repeat is the cheapest order you will ever place.
What we can and cannot tell you
We can measure a device, and we publish every field the factory declares in the specification index — the same records the figures on this site are computed from. We can show the arithmetic of sell-through, cover, reorder points and cash cycles, and we can review a pack drawing against a planogram template. What we cannot do is see your retailer's category report, model your cost of capital, or tell you what a specific buyer will decide: those belong to your account, and a page that guessed them would be inventing the most consequential number in your business.
If the question is still the first delivery, start with retail readiness. If it is which manufacturing route a reorder commits you to, OEM and private label sets out what each one costs to change. If it is what the bench can evidence about your device for a retail listing, for brands and distributors answers that, and the startup guide covers the sequence before any of this.
This page is published by the SirenPicks independent review desk, which tests devices and takes no payment for a placement, a ranking or a score. No rate card, threshold or category benchmark is quoted here: the mechanics are documented and the numbers are yours to substitute.
Sources cited
- Chopra, S. & Meindl, P., Supply Chain Management: Strategy, Planning, and Operation, Pearson, 2016 — cycle stock, safety stock and in-transit inventory, and the service-level logic behind a reorder point.
- Simchi-Levi, D., Kaminsky, P. & Simchi-Levi, E., Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies, McGraw-Hill, 2000 — the four conditions of a perfect order, which is the same test the retail side scores.
- Silver, E. A., Pyke, D. F. & Thomas, D. J., Inventory and Production Management in Supply Chains, CRC Press, 2016 — reorder points, safety stock and the treatment of variability in lead time.
- Christopher, M., Logistics and Supply Chain Management, FT Prentice Hall, 2011 — lead time as the binding constraint on responsiveness rather than a cost to be trimmed.
- Fisher, M. L., “What Is the Right Supply Chain for Your Product?”, Harvard Business Review, March–April 1997 — why a functional product and an innovative one need different replenishment logic.
- Wikipedia, 《Planogram》 — the shelf drawing that assigns the facings a category review then argues about.
No industry average appears on this page. Every figure is arithmetic on assumptions printed in its own caption, and the sources above support the concepts rather than any specific number.