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What is Sales Analysis?

Table of Contents

  • What is a Sale
  • What is a Sales Analysis?
  • Importance of Sales analysis
    • Opportunities to Expand your Reach
    • Customer Analysis
    • Product Mix Analysis
    • Decision Making
  • Types of Sales Analysis
    • Descriptive Analysis
    • Predictive Analysis
    • Product Analysis
  • Sales Analysis Examples and Templates
  • Template.Net
    • Sampletemplates.Net
  • How to Create Your Sales Analysis Report
    • What You Want to Track
    • How Frequently You Need Sales Analysis
    • Set the Important Variable
    • Tabular and Graphically Representation
    • Analyze Your Results

What is a Sale

A sale is an activity that generates profit or revenue for every business which consequently covers all the costs and expenses. Sale is very important for every organization. However, there are many ways to achieve the sale, easy and difficult both, they vary from business to business.

What is a Sales Analysis?

As the name implies sales analysis means analyzing the company’s sales over time. Different companies create sales analysis reports at different times; it might be on a daily basis, weekly basis, monthly basis, quarterly basis or annual basis. The purpose of sale analysis is to check the company’s performance and how it can be improved.

Importance of Sales analysis

Opportunities to Expand your Reach

By analyzing the sales data helps us to see the opportunities that we have missed or couldn’t claim it in the past and how we can achieve it in the future. It also helps us to make better decisions like which product to keep (continue) and which to discontinue. Or rearrange market activities, change in the manufacturing process, inventory management and which scheme or offer to be launched or not.

Customer Analysis

It would be absolutely right if we say that sales analysis equals to customer analysis because it tells us the buying and shopping of our targeted customer and how he reacts to our product or service.

Product Mix Analysis

Whenever a company plans to launch a new product; it is actually based on the sales analysis which tells us market trends and customer’s buying pattern. Sale analysis also tells the timing of the product to be launched, seasonally or off seasonal, holidays or festivals, because customer’s buying pattern changes depending upon the timing and situation.

Decision Making

All the top management decisions are based on the sales analysis, for instance, if a product isn’t selling then the company will decide to discontinue the product. Back in 2005-2006, Nokia button pad phones were at their peak but the management of Nokia ignored sales analysis reports and growth of upcoming touchpad phones at the time. What happened? 10 years later, Samsung captured the whole market of touchpad phones which were once belonged to Nokia’s button pad phones. Why? Nokia’s management refused to make a decision based on the sales analysis report.

Types of Sales Analysis

Different companies use different types of sales analysis depending upon their requirements. Here are some such as;

Descriptive Analysis

It describes the product, link or channel of distribution isn’t selling well and how it could be improved, or it should discontinue.

Predictive Analysis

As the name implies, it foretells the future sales based on the current and past sales analysis reports and timing.

Product Analysis

The sale of different products is different at different times of the year. For instance, winter’s clothes are only sold in the winter, but not in summer. Summer clothes are only sold in the summer, not in the winter.

Sales Analysis Examples and Templates

The purpose of sales analysis is to get the exact results of profit by sales. Now, the question is how to present your data into some understandable format, here’s a link to some templates;

Template.Net

Template.net is a good place where you can find sales analysis templates in different formats like Word, PDF, and excel. These sales templates can help you to collect and analyze sales data.

Sampletemplates.Net

This website is another good example of marketing and sales templates. It is not possible to set targets for the upcoming period without a detailed analysis. This is a place where you can find desired templates to analyze your sales reports, revenue, loss or any other expense incurred.

How to Create Your Sales Analysis Report

Sales analysis report can help you to discover very valuable information; it could be whether to change the product, price or even launch some new product or service.

The difference between the financial statement and sales analysis report is that the financial statement only provides you sales records and numbers. Sales analysis report, on the other hand, also provides you the new opportunities to grow your business and how it can be improved along with the financial statement.

What You Want to Track

Sales analysis report provides you an opportunity to dig deeper through the surface of certain product, service or department. If you’re planning to create a sales analysis report, then your objectives must be outlined, such as;

  • Repetitive sales to your targeted customers at one location
  • Newly acquired customer in a given time period
  • Frequently mentioning the purchases during the campaign.

How Frequently You Need Sales Analysis

Your company must decide how often they want to track their sales whether it is daily, weekly, monthly, quarterly, and so on because it gives you an overview of your previous sale. There must be more than one sales analysis reports with multiple variables.

How frequently your sales analysis reports should be; it depends on the nature and category of sale. As Gandy explains it that you want more frequent reports during the period of marketing promotions and in the season rather than in an ordinary typical month.

Set the Important Variable

You must know your key variables and how they are going to provide you the necessary data to achieve your objectives. Gandy suggests that one should drill down from top to bottom for more detailed variables like;

  • Location
  • Date
  • Amount of sale

If you want to be more precise about your product line, service, and customer trends; then add some more detailed variables such as;

  • Product number
  • Gross margins of the product
  • Category of the product
  • Customer data like phone number, email address, and name
  • Metrics for your sale campaign

Collect all the data (sales) from the sales point to customer management and put it into a spreadsheet.

Tabular and Graphically Representation

Once you have your required sales data in an excel spreadsheet. Now convert it into line graph or bar chart, it’s all automatic, just select the option and excel will the rest. This graphical representation will tell you that which of your sales variables are decreasing, growing, and maintaining a steady level. You can also compare your sales performance in a certain time period like a holiday, off-seasons, festivals, and etc. To check your sale performance from the historical perspective, you can track certain incrementing variables over the life of your product, service or business.

Analyze Your Results

Once your data is present in charts and graphs; then the final step is to analyze your sales report and look for market emerging patterns and trends and asks questions like;

  • What mix (product & service) is bought by the customers collectively?
  • When certain items of a mix (product or service) are being sold mostly?
  • Does the buyer follow any seasonal trends? Or any pattern emerges?
  • Repetitive customers and first-time customers are buying the same items of certain or different products?

Most importantly, notice the changes in your sales over a period of time. If some product or service isn’t performing, find out why and how it could be improved.

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Ahsan Ali Shaw

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