Agent Jessica Faust of Bookends Literary Agency explains the situation of sell-through in greater detail. You can read the entire post here. Here's some of the highlights:
"So a publisher will print books based on orders from stores. If stores order 20,000 copies, most publishers will print something around 22,000 to 25,000 copies of your book. They’ll ship 20,000 copies, which is your initial ship number. Within the next six months or so they’ll start to see returns. If 10,000 copies are returned, your sell-through is 50%. If 5,000 copies are returned, your sell-through is 75%, and if 15,000 copies are returned, your sell-through is 25%."
"One of the reasons sell-through is so important is that it affects the numbers for your next book. Let’s go back to our 20,000 copy order and pretend your sell-through was 50%. That means that your next book is likely to only get orders of 10,000 copies. If things are going well you’ll likely sell all 10,000 copies, have gone back to press on the first book and eventually go back to press on the second. Each time you go back to press the orders on your next book, as well as the sell-through, should increase. However, if your second book also has a sell-through of only 50%, that means the orders on your third book are going to be around 5,000 copies. If you haven’t noticed, you’re going in the wrong direction in that case."