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Playing with Numbers to Analyze Your Sales

by Millie.
(Portland, Oregon USA)

With the aid of a simple spreadsheet and grade school math you can produce some really interesting facts about your sales and your income. You can do some sales forecasting too.

My friend and associate set up a couple spread sheets for me so I could visually see where I was at from year to year with regard to # of units sold (in my case stones), # of orders received, and total income received.

These figures were divided as follows:

# of units or pieces divided by total sales = average income of each unit;

# of sales or orders divided by total sales = average income of each order;

Interestingly I found from 2009 to 2010 that the average unit dropped by 6 dollars – but the average order increased by 15 dollars.

This gives you the ability to recognize visually what worked and what didn’t work in your marketing strategy.

Where you have big peaks you know what helped your sales. For example, a year ago I had a huge peak one month when Rena featured my site. (Thanks again Rena!)

Other ways you can use a spreadsheet is to trace your visitor volume. Using visitor volumes to divide your sales figures can give you a picture of when your marketing efforts worked or paid off. This also gives you a picture of what didn’t work.

For example, when I purchased AdWords my volume went up, sales didn’t improve but my bounce rate went through the roof. The clicking in and clicking out doesn’t pay the bills.

When I purchased less expensive ads on target market sites, volume increased, bounce rate dropped dramatically, page views increased enormously and my sales went up.

Some tracking sites can give you an enormous amount of information but often times the data will disappear and show only a few months.

If you record the information from those trackers you can form these numerical pictures for years; you will start to see patterns. The patterns will offer you insight into when to increase product, when to advertise, where to advertise, etc.

If you record chronologically and record your dates it is helpful.

I might mention also that as I list each order that comes in and I include a name and address, email address with the numbers. This spread sheet is also a data base that can be used in mail merge programs, snail mail and e-mail as well.

If a customer has additional orders I don’t record the address or email, this gives me the ability to spot returning customers and how much they purchased without the extensive reports from the QuickBooks program I use for bookkeeping.

Knowing how many potential buyers have to see your product before you make a sale helps enormously in evaluating your potential business in the future.

You will see a historical fact that will develop from your numbers, such as for every 20 people that look at your product one will buy. (100 views = 5 sales; 1000 views = 50 sales.)

The trick in this system is to record the information consistently and timely so it doesn’t become a burden. Good record keeping has many advantages and helps you make good business decisions.

I hope you all have a Great and Prosperous 2011!

Millie \o/
Overstocked with Rocks!

Comments:

Something for the Future
by: Patricia C Vener

I expect this will be very useful when I have more than a dozen sales per year. :/

In all seriousness, though, this does seem logical and well set up. Thanks for sharing your process.

Great ideas
by: Terri

I use Google Analytics. I plugged in my etsy address and they do all the work. I can see graphs and numbers on how people found me, cities they live in, items they are clicking on and how many times, visitor trending and loyalty. I highly recommend it if you have a shop with a URL.

Spreadsheet info
by: Lisa W.

This is a great article that cn really help us to analyze sales and point us in the direction of our greatest profitability. I would love to hear more about the spreadsheet you are using. Can you tip us off as to the categories you have set it up with? What headings do you use across the top and down the sides? I love would try one similar to yours, and then tweak it for my own needs.

You have some great ideas I know I should look into more. I really haven’t paid attention to bounce rate, etc. The terrible truth is, I don'[ feel like it! But that’s not going to get my work sold, is it? So thanks SO much for pushing me in the right direction. Sometimes we all need a nudge!

Q and A
by: Millie

Hi Lisa, I’m happy you see the potential. Often times when things are a bit slow I use this spreadsheet to motivate me to work harder too.

Across the top, First (name); Last, Address, City, State, Zip, Email, Count*, Total Order ($’s)

(*In my case orders come with several stones)

Then at the end of each month, I leave a space or two between the between each month; Total Stones for each month; Total of all orders each month; Total number of orders; Average Sale (total dollars divided by total # of stones or pieces); Last column is Average Order ( Total $’s divided by number of sales).

You can also number your rows, but I just count them to get the number of sales each month.

At the end of the year you just total your totals, and use the same formula to get the big picture. Year after year you will see patterns form regarding your sales numbers; how your business is growing, or not.

The next step would be to record the number of visitors each month. Using the same simple formula by month (number of sales or units by number of visitors) will tell you quickly how many visits it will take on average to make a sale. I use Google Analytics to get visitor information however; it only gives me 3 month segments.

I have a long background in sales, one of the first things I was taught is that it normally takes more than one contact to make a sale and I guess you could say that I need to draw conclusions about my efforts paying off.

Simply stated without visitors there are no sales. So maybe that is why we here that there aren’t enough sales; working full time on creating beautiful jewelry doesn’t leave enough time for marketing strategies. If you have a marketing strategy you need a way to analyze it.

If I make a change in my strategy; what effect will it have on my bottom line? In other words I like to have some predictability and see progress in my work, or I need to make changes. Using a spreadsheet just makes it so simple and quick to make my analysis.

Strategy?
by: Patricia C Vener

I’m only being partly facetious. I know I have a strategy – sort of. But it’s very limited. I will say, though, that working facebook has gotten me more peer contact which is nice. For a long time I have been (and still am) stuck on locating my target audience. I know I can’t get very far until I know where they are and how to reach them.

Your posts here have the potential to be just what I need when I get more and repeat collectors.

I wish someone in my family had some marketing skills!

Maybe
by: Millie

Maybe you need to take the bull by the horns, learn as much as you can about marketing and then . . . . you will be the “one” in the family with marketing skills! Whoohoo \o/