Sales volume may not seem like the most exciting concept. Still, it can tell you a lot about your business, particularly your areas of strength and weakness. Many people view it as equally important as revenue, if not more.
If you’re interested in increasing your company’s sales volume, you first need to understand product volume and how it is measured. Below, you’ll learn the value of sales volume and how to incorporate the formula for sales volume into your organization.
What is sales volume?
Simply put, the sales volume definition is how many units you’ve sold over any accounting period, such as a year, quarter or month. You can calculate annual sales volume or narrow it down to a product category or specific product.
Note that the sales volume metric is different than total sales as it focuses on the number of units sold rather than monetary profit.
Why is sales volume important?
Calculating sales volume may not seem as relevant as the amount of money you’ve earned, but this is far from the case. Volume is one of the pivotal indicators of overall business health.
Understanding volume helps you track your marketing campaign’s performance, evaluate your sales division’s components, and learn more about product positioning.
You’ll get a clear picture of which products are selling the best, which need additional promotional attention, and which should be eliminated from your catalog entirely.
How to calculate sales volume
Figuring out how to calculate sales volume is easy enough to understand. The power of the sales volume formula is less about calculating for a particular period and more about how your numbers compare to previous accounting periods.
Sales volume formula
The unit sales formula involves multiplying the number of items you sell by a particular period. The chances are your sales dashboard already does this automatically.
For example, if you sell 1,000 units of a product in one year and want to find out your volume for that year, the formula you use would be 1000 x Y1 = 1000.
See, easy.
Unit sales formula example
Let’s delve into an example to see exactly what you can do by utilizing this super simple formula.
For example, you are selling health and wellness supplements and want to determine how many Vitamin C complexes you sold. You look at your dashboard and see that you sell 300 packages per month.
If you want to know your annual volume, the formula you would use would be 300 x 12 = 3,600 per year. This number can be used to calculate your total sales. Just take your volume and multiply it by the cost of the complex.
You’re selling these complexes for $20, so the total sales for the year would be: 3,600 x $20 = $72,000.
This same figure can be used to calculate the overall percentage of units sold within your company. This formula is:
(Units of Individual Products Sold x 100) / Total Units of All Products Sold = Total Sales Volume Percentage
As you can see, sales volume can help you accomplish a great deal by providing you with more insights into the inner workings of your brand. For example, suppose you discover that your Vitamin C complexes make up 54% of your company’s total sales. In that case, you will undoubtedly double down on your promotional efforts since it’s your flagship product.
And this only scratches the surface of how these figures work together.
How to increase sales volume
Growing sales volume is the priority of every company. Increasing volume means your business is growing. However, this is easier said than done.
To help you grow an individual product, category and entire organization, here are some clever tips you can implement right now.
Know the unique selling points of your product
What’s the critical quality or differentiator that separates your product from the competition?
Ask yourself questions such as:
- How does my product differ from the competition?
- What does my product provide that other similar products don’t?
- If given 60 seconds to promote my product, what is the main feature I would highlight?
The answers to these questions can better guide you in presenting your product to customers. Ask several people throughout your product development and marketing teams to gain more perspective.
Put the benefits first
Successful products are there to solve a problem and improve upon something. Your customers want to know what they get from buying a particular product. Anything else is just a bonus.
Identify how you can elevate the quality of your product. Reconsider how you promote your company’s wares by putting the benefits first. Be as specific as possible about what someone gets from their money.
Qualify your prospects
A surprising number of companies aren’t selling to the right people. Sluggish or declining sales volume indicates your sales process needs refreshing, which could involve retargeting your products.
Focus on the people who are the perfect fit for your product and are most likely to push the button on making a purchase. Trying to market to anyone else is wasting your time.
During the qualification process, ask specific, insightful questions to determine if someone is the right match. There’s a reason why big business invests millions of dollars every year in finding out who their customers are and what they want through focus groups.
Understand pain points
Successful sales are built on addressing pain points. These are the problems customers have that your product aims to solve. You are the solution.
Don’t assume that the pain points are apparent. Many customers aren’t even sure what their pain points are.
For example, if someone finds generating marketing analytics from their existing dashboard awkward and time-consuming, they may assume that’s just how it is. Selling a faster, more streamlined alternative to this problem may involve opening their eyes to what’s possible.
Moreover, if you’re cold-calling prospects, don’t expect all your contacts to tell you what their problems are immediately. It can take multiple contact points to get them to open up.
Work closely with your marketing team
Successful selling in any industry is a collaborative approach between the decision-makers within your company and the marketing team. There’s always a serious risk of isolating different teams, curtailing their effectiveness.
Avoid getting into the habit of constraining your marketing agents with strict, senseless guidelines. Let them spread their wings and provide input because they’re the people in the trenches.
Sales and marketing teams must achieve alignment to place the right leads in your pipeline. Your teams should be aware of any specific goals relating to volume and why those goals exist.
Empower your teams with information, and they’ll be better able to create content relevant to the products you’re attempting to push.
Up your sales velocity
Sales velocity is the time it takes for you to move prospects through the pipeline. If one of your agents has spent weeks trying to convince someone to buy, it better be a big fish, or they’re losing productivity.
Concentrate on selling faster and discarding prospects that don’t appear to be going anywhere. Time is money in any endeavor, so make this clear to your agents.
Grow your sales with Crunchbase
Sales volume is a powerful metric for measuring your business’s health. These figures can help you access additional insights that tell you more about your organization.
To make the most of volume, you need to have a plan for how to increase it and reorient your products to suit those goals. Work with your sales and marketing teams to develop strategies that increase volume and drive revenue.
Crunchbase powers businesses with all-in-one business and prospecting solutions. Spend less time searching and more time selling with sales intelligence tools that have a tangible impact on your sales volume.
