All Commodity Volume (ACV)

Posted in Finance, Accounting and Economics Terms, Total Reads: 304
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Definition: All Commodity Volume (ACV)

All Commodity Volume or ACV is a sum of all category sales in a store. ACV is a ratio & hence is measured as a percentage. It is a very important measure in the retail world because it helps to grow your sales & it helps in better placement(distribution). All Commodity Volume helps companies to adopt strategies & to achieve a balance between a “Push” & a “Pull”.

Let us understand ACV with an example-

Your company’s ACV gives you the measure of how effectively you are communicating your brand to your customers & in change how well is that working out for your sales.

ACV is given by:

ACV (%)= 100 * Total Sales of Stores Carrying Brand /  Total Sales of all Outlets

Example:

We have two Stores:

Store A: $ 400 In Total Sales  ( All Products)

Store B: $ 100 In Total Sales (All Products)

Total Value: $ 400 + $ 100 = $ 500

If suppose a ketch up “Maze” is sold only in store A, then  What is the % ACV ??

Store A % ACV – 80% [ 400/500]

Store B % ACV – 20% [100/500]

ACV helps us to answer the following question:

  • Are all retailers carrying my product ?
  • Are the distribution goals being met ?
  • My Store Sales are down. What is really happening in the stores ?
  • Can I identify which retailers are at least selling one of my new products ?

Thus to conclude we can say that % ACV  is the “% of stores selling” but with stores weighted based on their size & we get more credit for being there in large stores than in smaller ones.

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