Sales forecasting is simply a way to organize and analyze data to predict the future trends of your sales. It is highly data-driven and may be difficult for organizations who lack benchmark data. There are several methods of sales forecasting that you can use as an online businessman.
But first things first, you need to collate the right data to analyze. Some figures you should look at and prepare for analysis are:
- The sales numbers per period per product. The easiest period to work with is monthly forecasting. The sales numbers include the amount of products sold, the price at which the products were sold, your sales margin per product, the acquisition cost per product, the total revenue generated per product type and the total profit per product type.
- The number of sales that are returned or cancelled.
- Seasonality – expected spikes and downturns should be monitored strictly
- Economic forecasts can also affect your numbers. Factor in the predicted general growth for your markets’ economies.
- Other factors that affect bottomline, including but not limited to warehousing cost, shipping fees, employee salaries
- Your thresholds – make a smart estimate of sales scenarios being aggressive in one and safe in another. It would be best to have the following figures: optimistic (best case scenario), pessimistic (worst case scenario) and realistic (flat trending).
- Previous sales trends
Next, choose the forecast you want to have. Most businesses
will look for the cashflow where your Revenue – (Capital Expenditure +
Operating Expenditure) = Cashflow. What
you need to do is to get the data from the present back to the last three
months and use trending to get the figures for the next six months. Then,
continue factoring in your seasonality and economic forecasts + your own
targets for growth. Now repeat the process for the three scenarios mentioned
above.
Having this data on-hand will help you set realistic goals for your store and for your sales people.
Happy Selling!
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