Why Reviewing Sales Data is Key to Success for Makers in Business
As a maker in business, it’s easy to get caught up in the day-to-day of doing. Amidst the excitement of the creative process, it’s essential to take a step back and look at the numbers. Reviewing your sales data regularly is crucial for making informed decisions that can help optimise your business and set you up for long-term success.
Whether you’ve had a stellar year or faced some challenges, your sales data will offer you those “ah ha!” moments, where you understand what’s working, what isn’t, and how you can improve your approach.
Let’s look further into my favourite topic; how reviewing your sales data can help you make more strategic decisions about inventory, pricing, and marketing.
1. Identify Trends and Best-Sellers
One of the first things you’ll want to look for when reviewing your sales data is identifying trends. What products are flying off the shelves? Which ones are barely being touched? By tracking your sales over time, you can start to pinpointing patterns that will help you understand your customers’ preferences.
For example, perhaps your eco-friendly leather handbags have become your best-sellers, while your vegan collection hasn’t performed as well. Armed with this knowledge, you can adjust your inventory to focus on what’s popular, while potentially reconsidering or improving the underperforming items.
Where to find this information: If you’re selling through an online platform such as Etsy, Shopify, or your own website, most of these platforms offer built-in analytics that will provide you with detailed reports on your sales performance.
You can typically view which products have sold the most, your revenue over time, and even break down sales by specific time periods (monthly, quarterly, etc.). If you’re selling at markets, tracking your sales manually or using a point-of-sale system can help you gather the data you need.
2. Optimise Your Inventory Management
Once you have a clear understanding of your best-sellers and slower-moving items, you can make more informed decisions about your inventory. If you’ve noticed that a particular product is consistently selling well, it might be time to increase production or invest in outsourcing some elements of production to help you scale. On the other hand, if certain items aren’t moving, it might be time to reassess whether they’re still relevant to your customers or if it’s time to phase them out.
By aligning your inventory with demand, you avoid overstocking on items that won’t sell and ensure that your best products are always available for customers. This will not only save you time and money, but it can also improve cash flow by reducing the risk of unsold stock.
Members of MGTH can watch
Maker Session: Demystifying Data — Watch here
3. Pricing Strategies Based on Data
Pricing can be a tricky aspect of running a creative business. You want to make sure you’re charging enough to cover your costs and make a profit, but you also want your products to remain competitive. By reviewing your sales data, you can assess whether your pricing strategy is working or if adjustments are needed.
For example, if you see that your high-end products are selling well, you may decide that your pricing is spot on. But if you find that your mid-range products aren’t selling as much, perhaps you need to reassess your price point or add value to the product in another way (e.g. adding a special feature or packaging). Sales data helps you see if your pricing aligns with your customers’ expectations and willingness to pay.
Related video: Setting up tiered pricing to optimise sales
Watch our most (un)popular Maker Session — Product Pricing for Makers
4. Refining Your Marketing Strategies
Sales data can also provide valuable insights into which marketing strategies are working and which are falling flat. Perhaps you’ve noticed that sales spike after a social media campaign or email newsletter, but decline after a market event. This type of information allows you to fine-tune your marketing efforts and ensure you invest your time and money in the most effective strategies.
For example, if you’ve seen that Instagram posts featuring behind-the-scenes content generate the most engagement, you can shift your marketing strategy to focus more on those types of posts. Similarly, if you find that your sales are strongest around certain times of year, you can plan targeted promotions in advance to take full advantage of those peak periods.
Members, get back to basics with Social Media for Makers — Watch now
5. Data-Driven Decisions = Better Business Decisions
While it’s tempting to make decisions based on intuition alone, using data to support your decision making process is much more effective in optimising your business. Data helps you take the guesswork out of your decision-making process, making your choices more objective and grounded in facts.
For example, instead of launching a new product just because it’s something you’ve always wanted to create, sales data can help you understand if there’s a genuine demand for it. Maybe your customers are more interested in minimalist jewellery than the ornate pieces you’ve been thinking about. By making decisions based on data rather than gut feeling, you’ll be able to allocate your time and resources more efficiently and increase the likelihood of success.
6. Where to Start?
If you’re new to tracking sales data, it’s best to start small. Begin by reviewing your sales for the past three to six months to get a sense of your trends. If you sell through an online platform, start by familiarising yourself with the reports available to you. If you sell in person, consider using a POS system like Square to help you collect and analyse your data.
Once you’ve reviewed your data, ask yourself: What products are performing well? Are there any trends in customer purchasing behaviour? Are there areas where you could improve your offerings, pricing, or marketing?
As a small creative business owner, your sales data is an invaluable tool that can guide your decision-making process and help you optimise your business for success. By identifying trends, optimising inventory, adjusting your pricing strategy, and refining your marketing, you’ll set yourself up for greater profitability and growth in the coming months.
Take some time to review your sales data – it’s not just numbers; it’s the foundation for making smarter, more informed decisions that will take your business to the next level.
