Posted on April 12, 2016 by admin
In order to run a successful e-commerce business, you need to be able to generate sales, both now and in the future. An important factor in being able to secure a promising and profitable future for your business is building a credible sales forecast.
Without some method of sales forecasting, you will not be able to accurately manage all of the financial obligations involved with the operation of your business over the long term. Although you cannot predict the future, you can implement a method of credible sales forecasting, which can ensure that you have sufficient cash flow, manageable expenses, adequate inventory, etc., so that your business operates smoothly.
When it comes to building a credible sales forecast, there are a number of factors that can be considered, such as average number of visitors, total gross sales, average number and type of shopping cart items purchased, average product costs and average abandonment rates.
There are two main types of methods that businesses will choose from for building their sales forecast: Qualitative and Quantitative.
Those who choose to use a qualitative method of sales forecasting rely heavily on sales past experiences and hunches on future sales predictions, while a quantitative sales forecasting method uses a scientific approach, relying on business revenue data gathered over a period of time and other factors that can be gathered and compared to other competitors in the same industry, etc.
Whichever method you end up choosing will only help you gain a better understanding of what areas within your business operations may need adjusting. By building a credible sales forecast, you will ensure that you are removing barriers which may be preventing you from running your business efficiently. Some examples of barriers could be that inventory costs are too high, inventory management time is poor, the shopping cart process is confusing, etc.
Once you have established and implemented your chosen method of sales forecasting, remember that this is an ongoing process and not something to be left untouched a year down the road. Ensure that you continue tracking and recording valuable data on a regular basis, so that you can continue building credible sales forecasts which will boost business performance year after year.