Using Sales Data to make Business Decisions

by Sara Tams of sarah + abraham

calculating

Last month I talked a little bit about keeping track of my sales and hours to help me forecast future sales and plan my time accordingly. This month I’d like to talk a little more about the data that I keep track of and how it has helped me with business decisions.

Since starting sarah + abraham in 2007 I’ve used a spreadsheet to keep track of the following information for each of my sales:

  • Date
  • Order Number
  • Buyer Name
  • Item(s) Purchased
  • Price
  • Sales Tax
  • Shipping Charge
  • Actual Shipping Cost
  • Referral Source

Keeping track of this information in a way that can be searched, sorted, and measured has helped me tremendously in measuring my success and making decisions.

For example, shortly after opening my Etsy shop in 2007 I began offering a free gift with purchase for customers who told me how they found my shop (ex. Etsy search, Internet search, a friend, etc.)  When I launched my website I added that question to the checkout process. Not everyone answers it, but most people do. Over the years I’ve been able to see how much my repeat business is growing (yea!), how rarely customers are finding me through Internet searches (boo!), and how much my sales originating from Etsy are shrinking (still not enough to close my Etsy shop).

referral sources

I’ve been surprised to see how many sales were the result of magazine features (ex. only four sales came from being featured in Mary Engelbreit’s Home Companion, but 3.5% of my 2009 sales came from a couple of Real Simple features).

It’s been nice to see that a steady percentage of sales are coming from blog referrals even though I haven’t actively sought out any blog features since 2008.

Also, I’ve been really frustrated with international shipping lately and the expense of reliable tracking for shipments outside of North America. At the end of 2009 and again at the end of this year I was considering not offering international shipping anymore. But each time I took a look at what percentage of my sales came from international orders (12% in 2010) and decided that for now the hassle and frustration is worth it.

I also really like offering flat rate shipping to encourage customers to add more items to each order, so it’s nice to be able to keep track of what I’m charging for shipping and what I’m spending on shipping to make sure that my rates are what they should be.

As I mentioned in a previous post, I’m no longer blogging about business topics on my sarah + abraham blog, but I enjoy sharing advice here at OMHG, so if there are any topics that you’d like me to write about in the future, please leave a comment here to let me know!

7 comments

  1. Nice post – I love data – it can reveal so much about your business.

    It’s also a great way of up-selling/cross-selling – by looking at trends in the purchasing habits of a customer, you can see what other products they may be interested in, and make them offers they’ll love!

  2. Lucy MacDonald says:

    I love business topics! I would love to learn more about the printing process. Do you recommend to print in house or outsource? How do you manage your inventory?
    Thank you for sharing.

  3. sarah says:

    Hi Sara,

    Thanks for this post (and all others)! I really appreciate your transparency and willingness to share what works for you, your family and your business. I *love* data and sometimes feel that I get caught up in the behind the scenes stuff of analyzing my business and it takes too much time away from other things. For each order/customer do you add to your spreadsheet AND keep track of orders in quickbooks? Also, I’d love it if you could share how you track the progress of your orders (ie proof sent, payment recieved, proof approved, item shipped, etc). I’ve used a few different methods, but I haven’t found a favorite yet. Thanks!

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