Revenue VS Sell-In: Understanding the Difference

When we talk about sales performance, the terms turnover and sell-in are sometimes confused, even though they do not refer to the exact same thing. Each of these indicators points to a very distinct reality in the sales cycle.

This is what we explain to you in this short article.

Key difference between turnover and Sell-in

Turnover (TO) is the total sales excluding taxes generated by a company over a given period. Turnover can be calculated at a global level, by brand, by product, by channel, etc.

It corresponds to the book value of the invoices issued (sales to customers). For example, a beverage brand invoices €1M excl. tax to its distributors over the year = €1M in turnover.

Sell-in refers to sales from the supplier to its distributor clients (supermarkets, wholesalers, Horeca). It is therefore the "incoming" flow into the store (what the retailers buy from the supplier). Sell-in is what directly generates the supplier's turnover. For example, if your brand sells 5,000 cases of product to Carrefour, that is sell-in and it feeds your turnover.

➡ To make it clear:

• Turnover is a global and accounting indicator = book value of invoiced sales.

• Sell-in is the operational component that feeds it. It is the sales flow to distribution = volume and value of products delivered to distributors

And what about sell-out?

Sell-out is the outgoing flow from stores to final consumers. Out of the 5,000 cases sold to Carrefour, a portion is actually sold to customers and goes through the checkout.

An industrial manufacturer's turnover corresponds to its sell-in sales (since it invoices the distributors), but a strong sell-in does not necessarily guarantee a good sell-out (the risk is overstocking, breakage, or delisting if the products do not rotate).

If the sell-out is low, distributors can reduce their orders, which brings a risk of a decline in future turnover.