Analyzing Sales Trends

Written by Jacey Harmon
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There is an old saying, "You won't know where you are going unless you know where you have been." This saying rings true in business and the way to know where you have been is to analyze sales trends. A sale is what creates the cash flow that keeps a business operating. Analyzing sales trends allows a company to accomplish a variety of tasks from increasing efficiency to launching new products.

Analyzing sales trends will create a host of benefits for a company. A company can study past sales during certain time periods to see patterned fluctuations in cash flow. The company can act on these fluctuations by increasing and decreasing the labor force as necessary. A business can also create marketing strategies to create a more level cash flow.

Sales trends will also indicate which products are selling well and which are not. By knowing which product is selling well a company may try to purchase larger blocks in order to negotiate a lower price. By buying more bulk of the product at a lower price the business can increase the profit margin on a particular product. A product that is not selling well can be discontinued to create shelf space for better selling products.

How to Analyze Sales Trends

There are a wide variety of ways for a business to analyze sales trends. A small business with low revenues and small product line can use a simple spreadsheet to study sales. Larger businesses need much more complicated formulas and database applications. There are a host of businesses that specialize in providing software programs and data warehousing that will help larger companies analyze past sales trends. These more complicated systems can analyze a multitude of factors to identify trends that may otherwise go unseen.

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