What is Average Unit Retail?
Average Unit Retail (AUR) is the average dollar amount spent for a particular type of item, calculated by dividing the total sales in dollars by the number of items sold. This is a metric that retailers can use to compare sales across different departments or categories.
As a supplier, having a good understanding of the Average Unit Retail for your item is especially important when determining your pricing strategy for Walmart and other retail partners.
How to calculate AUR
AUR is the Average Unit Retail calculated for a given item over a select period of time.
To calculate AUR, you simply take the total revenue (or net sales) divided by the number of units sold.
Example: $500 in net sales / 50 units sold = $10 AUR (each unit sold averaged $10 per sale).
Why AUR is important
It’s very important for suppliers to know an item’s AUR for the different retailers carrying their item. Retailers will be doing the same comparison.
As some retailers are every-day-low-priced whereas others play “high/low” with retail price, understanding your retailer’s strategy is vital. It helps you better understand if they’re happy with where their AUR is compared to their competition.
AUR is an important metric to understand, although the retailer is in sole control of retail price.
Some businesses make a common error in calculating their AUR. When trying to determine their Average Unit Retail, they also include their on-hand inventory. This calculation can be incorrect because of markdowns. A shirt in your existing inventory may be priced at $30, but the actual sale could be discounted, affecting the AUR.
Ensure your AUR calculation is using the Net Sales after markdowns divided by your total units sold.