Posted in Marketing and Strategy Terms, Total Reads: 186
Definition: Sales Per Point of Distribution (SPPD)
Sales per Point of Distribution is a method to measure the shelf velocity of a product. Shelf Velocity is the time period (i.e. hours, days or weeks) for which a product stays in the shelf of a store before being sold to the consumer. It signifies how fast the product is moving in a store when distributed in the market.
It is used to compare products with different distribution levels but within the same market. For ex- If you own a FMCG company and want to measure the sales of one of your product say soap and compare it with your competitors. You distribute 10000 soaps in a month at a super market while one of your competitors distribute 25000 soaps. Here, SPPD is used to find whose product is sold faster (As no. of soaps sold can be more for the competitor)
At the same time, it cannot be used to compare products across market. For Ex- If your distribution area is two states say Maharashtra and Andhra Pradesh then you will compare SPPD separately for Maharashtra and Andhra Pradesh with its competitors in the respective markets. Comparing SSPD of these two market will not give any logical interpretation.
Mathematically, it is calculated by dividing sales in terms of unit, volume or currency from some measures of distribution like ACV Distribution (to take into account different store size).