What does sales per point of distribution (SPPD) equalize?

Sales per point of distribution (SPPD) is a metric that provides a standardized way to evaluate the sales performance of products in relation to their distribution levels. By calculating SPPD, you are able to compare how much sales are generated for each distribution point for different items.

This metric is particularly valuable as it accounts for the varying degrees of market presence a product may have; thus, it levels the playing field for comparison. For example, if one product is available in 1,000 stores while another is available in only 500 stores, SPPD allows for an assessment of how well each product performs in its respective distribution footprint.

This helps category managers determine whether an item is performing well given its presence in the market or if it needs adjustments such as promotional efforts or changes in pricing strategy. Comparing sales per point of distribution provides insights into how effectively a product is being marketed and sold through its available channels.