August 10, 2017, 7:55 am

How to Conduct an Ecommerce Sales Forecast

by: The Financial Blogger    Category: Business
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If you’re hosting an outdoor event, you keep your eyes glued to the weather forecast leading up to the big day. You hope for sunny skies, of course, but you also need to plan for inclement weather. Looking ahead allows you to prepare and adjust so no outcome will be a total surprise.

The same principle applies to running an online store. Creating an ecommerce sales forecast helps maintain the right inventory volume and keep the books balanced. Unfortunately, no TV meteorologist can deliver these predictions. You must make your own.

Here’s how to conduct an ecommerce sales forecast.

Examine Past Data

The best way to predict the future is to learn from the past. Although you may be less-than-eager to delve into numbers from your past (especially those first few months), it’s a useful starting point for charting future growth. Look at how your ecommerce company’s sales have grown month over month. What if that pattern continues? Where will you be in six months? A year?

Besides hard sales figures, Orderhive suggests you also look at:

  • Average number of items in cart
  • Average number of visitors to your website
  • Average cost of each product
  • Total gross sales

Plugging these numbers month-over-month into a spreadsheet can help you see emerging trends before they happen and respond accordingly. Pro tip: If your store uses a cloud-based ecommerce platform like Shopify, it may have a built-in tool to help you aggregate and analyze this data without having to create your own separate report (and update it monthly).

Season Matters

Every industry has a natural ebb and flow. It’s important to determine where your store fits into that. The last thing you want to do is hit busy season and run out of product just as the crowds are clamoring for your merchandise! Telling customers items are on backorder and will take an extra two to three weeks to ship is a surefire way to encourage cart abandonment.

Part of any accurate sales forecast will include what people are searching for, as well as when and how this relates to their actual buying habits. Determining keyword-based search frequencies by month can help you prepare your inventory. People often shop in advance, so make note of what items they’re searching in your store and be sure to order enough to satisfy the seasonal demand.

You’ll also want to pay attention to anomalies. Maybe next winter is supposed to be the snowiest of the century. In that case, you’ll want to promote your line of winter wear earlier and more aggressively than usual because there’s snow (and sales) in the forecast. It’s all about balancing your inventory with your customers’ needs based on what their search inquiries reveal they want and what your past numbers tell you.

When in Doubt…Flash Sale

Let’s say your sales forecast is slightly optimistic and you’re left with surplus stock. While it’s not ideal, it’s still better than running out of merchandise halfway through your busiest week of the year. Hosting a flash sale is a good way to square up your inventory. Over half (56 percent) of businesses have higher click-to-open rates for flash-sale campaigns than regular ones.

Hosting a short, exclusive sale is a good way to buck routine and bolster your sales figures. Of course, you can only get away with this a few times a year before it becomes the new normal. A better strategy is to use flash sales sparingly and depend on accurate ecommerce sales forecasting that takes all the aforementioned factors into account.

The best way to figure out how to conduct an ecommerce sales forecast is to actually do it. Relying on past data, customer search queries and seasonal trends is the best place to start.

 

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