Analyse your sales
As one year comes to an end it can be a good time to analyse your sales and identify new product growth areas to develop for the year ahead. That being said taking time to analyse your sales at any time is beneficial business exercise!
There are a couple of different data analysis calculations you can undertake that delve into your products sales. Some may shed some more interesting insights rather than looking at your best sellers too! I’ve included three of my go to data analysis tricks I use and learnt from my time at notonthehighstreet.com.
You can also listen to this sales analysis information on my podcast Elevate Your Curiosity!
Range review
Completing a range review of all your products can show you what categories and subcategories are bringing in the majority of you sales. It’ll also highlight what areas are growing. This will show what your customers love to buy from you, and in turn means you can develop more products in these categories that they already love!
Divide your products into categories and subcategories. For example:
Category
- Stationery
Subcategories
- Notebooks
- Desk accessories
- Diaries
Category
- Home
Subcategories
- Lighting
- Storage
- Mirrors
Then work out the percentage of sales from each category, and then by the subcategories. Then see how many products are in each category and subcategory.
So if one subcategory has 5 products (and you have a 100 products in total) and is bringing in 30% of your sales, then this subcategory is over indexing and you should develop more products in this area.
The aim with this is to spot categories that are growing and add in new subcategories that compliment them and your customers will love.
This is a simple way to look at a range review, but a great place to start.
Daily rate of sale
Working out your daily rate of sale means you can identify what products are performing well, regardless of the time they’ve been live. For example you may have a best seller has made a lot of money for you business, but if that’s over a five year period then maybe the sales are slowing. In turn you’ll be able to see new products that are already selling well, even if they haven’t been live for long.
Work out your daily rate of sale for each product by dividing the total sales between the number of days it’s been live. This will give you an indication of best sellers that have plateaued or new products that are becoming best sellers.
For example:
- Drop earrings have been live for 912 days (2.5 years) and have made £410,000. The daly rate of sale would be £499.
- Chandelier earrings have been live for 55 days and have made £41,500. The daily rate of sale would be £754.
As you can see the chandelier earrings are currently outperforming the drop earrings, even though they haven’t brought in as much money, they are currently making 51% more.
From this see if you can identify what’s different from the new products that are performing well – is it the style, material, colour, trend or whatever else it may be.
Conversion
Conversion is a great metric to use to see how many shoppers are seeing your product and then go onto to buy it. This means that even if a product has lower sales but if it has lower page views it may mean the conversion is high, as when customers do get to the page they’re more likely to buy.
You work out conversion by dividing the number of checkouts your product has had by the number of page views.
Side note:
Page views can be just page views (the total number of page views a product has had from multiple uses) vs unique page views (if one customer views your product page multiple times during one session, it will just be counted as one unique view, instead of 5 page views).
Decide on what types of page views you’ll use and stick to it so not to confuse data down the line!
That’s three ways to analyse your sales in different ways. If you have any sales analysis that you love to complete it would be great. Or if you’ve got a question then let me know!
