Forecasting Buying Trends Based on Past Sales:
5 Questions to Help You Get Started.
FEATURED COMMENTARY
By Chris Malta Home EBiz Product Sourcing Expert
Do you underestimate the power of tracking your sales? According to Lisa Suttora,
founder of WhatDoISell.com, online retailers can learn a lot from those figures.
Says Suttora, When it comes to figuring out what inventory to sell in the upcoming
season, you need to start by looking at your sales from seasons past the numbers
tell the story. As your e-business moves forward, tracking this data helps you
avoid repeating mistakes and enables you to make well-informed product sourcing
decisions.
History Lessons As you look at your sales history, there are five specific questions
you should be asking, to gain a proper perspective on your sourcing position:
1. What patterns did I see in my business during the previous season? Identify the
defining characteristics of your best-selling items. If your eStore sells clocks,
were your best-sellers vintage? Were they modern? Feature-heavy? Brand- name? But
don’t stop yet you’re only half-way there.
Once you’ve determined which items were your fastest movers, go a step further and
look at the consumer trends that drove those product sales (e.g. technology-enhanced
products, earth-friendly living, etc.) If the trends behind those sales are still
growing, then you know those items will continue to sell well. If, however, they’re
on their way out, you don’t want to drag down your profits with products and trends
on the decline.
2. Has my customer base changed over the year? If you detect a shift in the
demographics of your buyer base (e.g. an upsurge in the percentage of female
buyers), you need to discover the cause. This is where your customer feedback
becomes important whether it’s paying attention to customer emails or sending out
surveys. To figure out how to keep your customers coming back, you need to find out
who they are and why they’re buying.
3. Am I up-to-date with my current suppliers? Many sellers operate out of
distributor catalogs that are two quarters old in retail, that’s a lifetime. Your
suppliers spend a great deal of time and money doing research to keep ahead of
consumer buying trends. You need to leverage their research by implementing the
results into your product selection and sourcing. That means getting their catalogs
as soon as they come out, signing up for their newsletters, and reading their
emails. These items all contain a great deal of information on where the market is
heading.
4. Have I integrated any of the products that my current suppliers have introduced
into the marketplace in the last year? It’s easy to get stuck in a product sourcing
rut, and simply re-order the same products again and again. But if you want to
maximize your selling potential, you have to continually test-market new products,
and expand your line and your customer base.
5. What trending research methods do I currently employ? It’s important to study the
trending information that’s coming out of the retail industry you sell in, whether
you’re attending trade shows, visiting trade association web sites, or reading
consumer magazines and industry publications. This is how you learn which trends are
rising and which trends are on their way out, so you can move your eBiz into the
future.
Examine Your Sourcing Strategy Documenting your monthly and seasonal sales records
allows you to look back and spot patterns in what products sell best, and when.
Explains Suttora, Truly successful e-tailers track and study their product sales.
If you’ll implement these practices into your own business strategy, you’ll quickly
recognize whether you’re on the right product sourcing path, or whether you need to
shift your sourcing in a new, better direction.
Here is our latest recommendation that can help you grow your eBiz!
ECMTA – eCommerce Merchant Trade Association
Join ECMTA and have access to tools and information that YOU need to excel in
ecommerce. You should join if your business does any of the following:
. Advertises with keywords on Google, Yahoo! or Microsoft
. Processes credit cards, PayPal payments or uses Google Checkout
. Sells on eBay, Amazon, Overstock or your own website
. Ships packages with the Post Office, FedEx or UPS
. Uses software to ship orders or insure valuable items
. Blogs or issues press releases to promote their business
. Sends emails or newsletters to customers or uses online chat for customer service
. Promotes its products with an affiliate program
. Manages a website that collects personal information or uses an SSL to encrypt data
. Outsources fulfillment or product sourcing to third-party professionals
ECMTA partners provide:
. Office & Packaging Supplies
. Supply Chain Management (SCM)
. Customer Retention Management (CRM)
. Logistics & Fulfillment
. Payroll & Human Resources
. Website Coding & Graphics
. Website Hosting & Monitoring
. Email, Live Chat, VOIP & Contact Management
The Internet is constantly changing and it is extremely important to stay
informed about these changes; ECMTA has the tools to help you do that.
The Merchants Discussion Forum, newsletters, webinars and networking events
help you stay updated on what the industry experts are saying and doing.
Learn more Join ECMTA today.
