Ecommerce
How to Forecast Your Ecommerce Business Sales
- Written by Jana Gentry Smith
Forecasting sales isn't about wildly predicting your share of the expected 8.3% ecommerce sales growth in 2025. Sure, it can feel like you're wrestling with a quantum physics problem. But with the right roadmap and toolkit, it becomes less cryptic and more crucial.
Think of sales forecasting as your business's crystal ball. It gives you a glimpse into the future to help you steer pivotal decisions on inventory, staffing, cash flow, and marketing budget.
And yeah, it'd be great if someone could demystify ecommerce sales forecasting, saving you from hours of number-crunching mayhem.
You’re in luck.
This guide lifts the fog on sales forecasting, giving you the insight needed to run a successful ecommerce business.
6 steps to guide you through forecasting ecommerce business sales
Sales forecasting is all about peering into your business's future by predicting how much you'll sell.
You’ll play detective and use the clues to predict your sales trajectory for the coming weeks, months, or even years.
Also, accurate forecasts prevent an overstocked or empty inventory, guide hiring decisions, deliver data to streamline your warehouse layout and warehouse management processes, and help you budget wisely.
Ultimately, effective sales forecasting can save you money and help your business stay ahead of the curve.
Adjusting and updating your forecast as new data comes in is essential. Think of it as a continuous process, not a one-time thing.
To make forecasting part of your routine, here are six straightforward steps to navigate your store’s ecommerce sales forecasting process.
Step 1: Decide what mix of data you'll consider
First, decide which data types you will use in your forecasting.
Will you use qualitative data, like expert opinions and market research? Or will you lean more on quantitative data, like hard numbers from past sales or industry benchmarks?
Maybe you'll also mix in some predictive analytics, using algorithms and machine learning to predict future trends.
Sales forecasts are better when you blend quantitative and qualitative data.
Quantitative data, like past sales, gives you hard numbers and patterns. Qualitative data, like customer feedback, offers insights into why those patterns exist.
Together, they provide a fuller picture, making your sales forecasts more reliable and comprehensive. Since It’s your sales forecast, you get to choose the mix that works best for your business.
Further reading: Best Alternatives to Managing Warehouse Stock in Excel
Step 2: Gather historical sales and market research data
Begin by looking inward. Take a peek at your business’s past sales data so you can spot trends for your products. Be on the lookout for the following:
Sales performance: How have you done in the past?
Customer demographics: Who's buying your products?
Purchase history: What are they buying and when?
Marketing campaign outcomes: What worked and what didn't?
Seasonal fluctuations: How can holidays, back-to-school, and even the weather cause sales to spike or dip?
Your CRM and sales data offer a wealth of insights. Also, any odd data points you notice might be telling you something important about shifts in demand.
Weaving all this historical data and market research into your forecasting models can help you plan how to adjust inventory, marketing, and operations to meet demand.
Step 3: Scope out what’s going on outside your ecommerce walls
You’re keenly aware that you’re not the only ecommerce business out there.
For this reason, you want to keep an eye on the economic landscape, sniff out industry trends, track your competitors, and stay in tune with market demand.
Here's where you can find this info:
Market research reports: Dig into studies and surveys.
Industry publications: Stay updated with news and trends.
Government data: Access to sites like the U.S. Bureau of Economic Analysis (BEA) and Federal Reserve Economic Data (FRED) can be a goldmine for economic indicators.
Competitor analysis: Track competitors' product launches, promotions, and inventory levels to predict changes in the market dynamics.
Then, conduct competitive benchmarking to identify areas where you can differentiate your products or services.
Step 4: Use demand forecasting models
Apply demand forecasting models to predict ecommerce sales and use past data to gauge future trends. Here's how:
Moving averages: Looks at past sales over a certain period to identify trends
Exponential smoothing: Like moving averages, but gives more weight to recent sales
Regression analysis: Checks how factors like promotions or seasons affect sales.
Don't stress about the math—there's software to handle that. Your task is to study past sales. You can try different models to find the one that best predicts your store's future sales.
Step 5: Seek customer feedback
Now, use empathy to understand your customers' hearts and minds. After all, isn’t your goal to make them happy?
Understanding your buyers' habits and preferences is like having a cheat sheet for their future buying decisions. One that you need to make accurate sales forecasts.
Here's how you can get these insights:
Surveys: Ask them directly, and you shall receive
Focus groups: A little face-to-face (or Zoom-to-Zoom) conversation reveals a lot
Social media monitoring: Keep an ear to the digital ground
Once you've gathered their thoughts (and yours), it's time for analysis. Review and update your forecasts often based on what you find.
Step 6: Tailor your forecasting strategy to your marketplaces
Sales forecasting for multi-channel stores and Amazon requires unique considerations. Here are some of the differences:
For example, this Amazon-specific data may influence your sales forecast:
Winning the Buy Box: Usually leads to more sales
Prime eligibility: Customers are more likely to buy from you over competitors
Search rank data: The higher the rank, the more likely customers will see and buy your items
Review performance: Positive ratings and feedback from buyers show which products sell best
Pricing intelligence: Customers buy your competitively-priced items over others
Advertising impact: Paid ads drive more traffic and sales for your promoted items
Plus, supply chain and inventory factors like stock levels, lead times, and storage limitations impact how many units you can sell during a period.
Keeping an eye on your metrics and regularly updating your forecasts can help maintain strong Amazon sales.
Forecasting multi-channel sales is complex since data from each channel is combined.
Each channel—Amazon, eBay, TikTok Shop, Walmart, and Shopify—has specific demand patterns and customer behaviors.
These channels can also interact. For example, a promotion on one channel might affect sales on another.
Despite these challenges, tools like Veeqo can simplify the process. It integrates with many stores and carriers while also managing your warehouse and inventory.
Along with that, it helps with demand forecasting and delivering consolidated forecasts.
In both scenarios, whether Amazon-only or multi-channel, you can tailor your forecasting strategy to the marketplace's specifics to manage your inventory, make more sales, and keep your customers happy.
Choose tools that can make ecommerce sales forecasting easier
Cracking the sales forecasting code for your ecommerce business shouldn’t feel like quantum physics.
Start with choosing the right data and analyzing past sales.
Then, scope out the competition and use demand forecasting models. Each of these steps helps sharpen your view of your business's future.
The right tools save time, improve accuracy, and provide insights that would be difficult to get otherwise.
One popular software designed to help Amazon sellers increase their profits is sellerboard. It offers the following features to help you get the most from your ecommerce store:
Profit analysis
Inventory planning
Marketing planning
Demand forecasting
Historical data analysis
Inventory management
Sales projections for new products.
Plus, it lets you explore 'what-if' scenarios and provides comprehensive reporting and analytics. Other, similar tools, include InventoryLab and Helium10.
Veeqo isn't a profit tool like sellerboard. But it does help multi-channel ecommerce sellers with inventory forecasting and sales.
Here’s how it will make running your ecommerce business easier:
Profitability reports
Fine-tuned product demand predictions
Inventory quantity and valuation reports
Integrations with over 50 stores and carriers
Omnichannel sales revenue per SKU and by product categories
The best part? It’s free.
Whether you're selling on Amazon or across many channels, forecasting isn't a one-and-done task. It's an ongoing process that, when followed, can help you manage your inventory, boost sales, and keep your customers happy.
Veeqo’s robust set of tools for demand forecasting and sales reporting can help boost your sales and bottom line.
Further reading: Toy retailer eChapps saves $15,000 a year with Veeqo
With a clear view of your top-selling products and best-performing marketplaces, you can make smarter decisions about product investments. When you bundle all this with shipping, inventory, and warehouse management into one super convenient software package, you can’t miss.
Want your ecommerce business sales forecasting to help you prepare for and amp up future sales? Create your free Veeqo account today.
