It's hard to know an accurate number of sales that you will make through your eCommerce business. Being able to make this forecast is crucial for the success of your business in the short and long term. Without an idea of how much stock you'll need of any particular item, you run the risk of sitting on a lot of product that you don't need or having to turn business away. With so much competition in the world of eCommerce, you often will only have one shot to obtain and keep a satisfied and loyal customer. With this overwhelming need for accurate predictive information, how can this be addressed to help your business? The following are some suggestions for predicting your sales forecast.
Think About Your Marketing Campaigns
Planning your marketing for a specific period of time is a good idea. Marketing dollars are designed to generate more than they cost. Planning your marketing campaigns strategically can help with your sales predictions as well. If you are pushing a particular product or category of products, you should make sure you are stocking the items that will be addressed through the marketing push. You can also take advantage of your analytics from past campaigns. How successful were they when you pushed those products before? Did the marketing efforts yield positive results? You can then have at least a blueprint for what stock needs to be increased. The worst-case scenario is that you are marketing a product that is unavailable. The bottom line: Sync your marketing calendar with your available inventory.
What is Your Sales History?
Before you do anything else, perhaps it's best to look at history to be your guide. Year-over-year sales figures can show you what you sold at the same time a year before. While this information has to be used with other sources of data (such as projected marketing efforts,) it is a very effective way to forecast what sales your eCommerce business can expect. Sales history from previous months and shorter time frames can also help you to determine if you're seeing a change in sales, and consequently need to increase your stock. Make sure you are looking at which products are selling better than others to determine what you will need more of at any given time. But if all things are equal, your sales history can be one of the best predictors you use. The bottom line: You should absolutely utilize the past to guide your future.
Know Your Customer Acquisition Cost
The customer acquisition cost (CAC) is the calculation of how much it actually costs to convince a customer to buy a product from your business. This metric can be linked back to forecasting your sales because you'll have a much better idea of how many sales your advertising and marketing budget will generate. Taking the time to calculate this figure will take even more guesswork out of determining your sales. It also helps you to prepare your marketing budget more realistically. When you understand the actual cost to bring about a sale, the blueprint for scaling your business becomes much clearer. There are ways to reduce the CAC, but that's a completely separate topic. The bottom line is that instead of throwing your advertising budget and "hoping" for big returns, you can more accurately pinpoint the actual return you can expect from that budget. This reduces stagnant inventory and ultimately is more profitable.
Prepare for the Holidays
Online retail doesn't always have the same confines as traditional physical retail establishments, but there are absolute cross-overs that apply to retail across the board. Different holiday seasons will result in a need for additional inventory. The months of November and December are huge holiday shopping months, so make sure you plan accordingly. Other holidays may be big for you as well depending upon what you sell. October is huge because of Halloween, so if you sell party supplies, costumes, or candy, you should stock-up. When you know what you're selling, look at the holidays that may be applicable and make sure you plan for your inventory needs. The bottom line: Not all holidays impact your business, so make sure you know which ones.
Being Organized is Crucial
When you sell a lot of different items, especially in a high volume, you have to be organized. Fortunately, tools like Inventory Planner can take the guesswork away when it comes to tracking and planning your inventory. Inventory Planner will free-up more time so you can focus on marketing your business to drive more sales. In this age of automation, you can work smarter instead of harder by letting Inventory Planner manage all your inventory forecasting needs. Small businesses have been able to scale faster and large businesses have improved profitability through improved inventory management. The bottom line: Easy inventory control and planning is all at your fingertips with Inventory Planner. Start your free trial today!