Driven by Data

Quick! What were your top three best sellers for last year?

graphs and charts

When the names of the products sprang to your mind, where did you get this information? Was it a gut “This product is SUPER popular! I’m always selling it and I can’t keep it in stock!” or was it from hard data and metrics? If it wasn’t from hard data and metrics, you could be leaving money on the table. A business best practice that a wise mentor once shared with me is that he makes all decisions on sales and production based on the previous year’s sales.  He doesn’t base decisions on his gut. He doesn’t make decisions based on what he likes. Rather, he uses data to figure out what the customer wants and likes.

Quick! How many times have you decided to keep a product because you love it, or your Mom loves it or your Aunt Edna loves it? But really, the sales weren’t there to support it?

We’ve all been guilty of that. I kept Fresh Baked Bread fragrance oil (yes, it really was as delicious as the name makes it sound) for two years longer than the sales reports said to keep it because I loved it so very much. Unfortunately, the numbers did win out though and Fresh Baked Bread is a thing of the past. It simply wasn’t a good business decision to keep that fragrance but I overrode the cold, hard facts because I convinced myself that others would see the genius in Fresh Baked Bread if only given a chance.

At the end of your sales year, run your sales reports for everything you sold – each individual item, families of items, fragrances or however you organize your items. After you have your reports, it’s time to evaluate the numbers and make changes for the upcoming year. By now, you should have a handle on your taxes from last year, have your plan for this year for sales outlets and shows so it’s a perfect time to review your sales data for last year.

Things to do with your data:

(1) Predict sales for each month so you can accurately plan your production. Wouldn’t it be great if you didn’t run out of your best seller at the same summer craft show every year? You can staff for manufacturing properly and make sure that your materials are there for your seasonal items with your sales data.

(2) Plan promotions and discounts for slower moving items to give them a fighting chance to stay in your line up. This is where you let your gut have its say. If there’s an item that’s just on the edge – soooooooo close to making it – it’s okay to give it another year and fiercely promote it. If you believe in the product, give it a chance! After all, the first lotion bars in a deodorant tube to be introduced 15 years ago? They took a while to catch on but now there a staple in many home crafters lines.

(3) Discontinue items. This is the hardest one for me to do but by keeping items that don’t sell well, you’re taking up the space for a new item that might sell great! Remember, items that are made but are not selling are the same as cash sitting there, staring at you. It’s better to make the hard cut to make way for new items than it is to keep a relationship with an item that isn’t producing the results you need it to.

If you’re not keeping track of your sales and your data, make 2012 the year that you start! Just think of how much more effective you can make your business in 2013 when you’re armed with reliable sales numbers.

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25 Comments

  1. says

    Funny thing you mention Fresh Baked Bread scent – it was the basis for my doughnut soaps! No one carries it anymore :( Any ways, your article has great info for small businesses like myself. Thank you for all of the great soaping and business info on your site!

    • Anne-Marie says

      (sigh) I LOVED that fragrance – LOVED it. But I couldn’t get anyone else to. Maybe I’ll have to do a fast buy one of these days for pre-sold amounts so that way, we can all get our bread fix =)

      • says

        I ADORED fresh baked bread FO!! It was one of the 1st oils I bought from you and no one could understand how weird I was..lol I would stand holding my soap and smelling it in deep breaths..it reminded me of my grandmothers kitchen. Sigh, it will be missed.

        • says

          You should do a Soap Queen TV episode using the Baked Bread FO, then it would pique peoples’ interest and they would buy it and love it! I managed to find some at Save on Scents, but that was a while back and I’m not sure if they still have it. I prefer to get my fragrances from Bramble Berry–they’re always such good quality and are often delightful, unique blends!

          • Anne-Marie says

            Aw, thanks for the love! One of these days, I might bring it back and do an entire blog series just to humor myself and my team (we were all fans). =)

  2. Linda says

    Another great article, Anne-Marie! I have the same problem with the Energy & Oatmeal, Milk & Honey fragrance. I like them, but, alas, no one else seems to…Guess I’ll just have to keep them all for myself! LOL

    • says

      Oh that’s interesting! That’s our number one bestseller so it’s selling well for lots of other soapers. If you’re not quite ready to give up on that fragrance, maybe try a new design or something and see if that helps? Then, you’ll have more data to make your decision and not look back!

      • Linda says

        Tried that already. It must just be my area. I’m still going to make it in small batches just for myself because I like it. Who knows, maybe someone will request it next year! LOL

  3. says

    Thank you, great post! Can you recommend a program to track sales? I’ve been looking at Quickbooks…need something to integrate online and b&m store tracking/analytics.

    • says

      We use Quickbooks Enterprise, which is basically the same version that you have access to. For orders that don’t automatically transfer from our website, we hand input those (it’s worth it for the reporting and accounting needs).

      We export all the sales data to Excel sheets, move and rename columns as necessary and make it useful for us that way.

      We also use Quickbooks as our Accounting system and inventory system so that helps to have it all in one place.

  4. says

    Hi Anne-Marie!

    Great article. I would also love your recommendation for a sales tracking program. I use QB as well, but I’m not sure it’s as comprehensive as I would like it to be.

    Thanks so much!
    ~Shell

    • says

      I have been doing a basic excel sheet for keeping track. I have one for fragrances and one for sizes. So for example if I sell a Large energy and a small energy, I add “2” to the energy space, 1 in large and 1 in small. It is kind of basic right now but it works for me. :)

    • says

      We use Quickbooks Enterprise, which is basically Quickbooks on steroids but the small business version has the same things ours does, I think.

      We actually put almost all of our items in as “kits” so that when we use it up, the system pulls from our inventory. Example: rebatch soap. We entered each ingredient into the “kit” and when we sell rebatch soap, our system thinks “Oh, they sold .3 oz. Coconut, .3 oz. Palm, .5 oz. Olive Oil, .1 oz. lye, 10 oz. water”. This makes it easier for us to track raw materials versus retail product sales.

      For one of our websites, we hand input each of the sales invoices to get it into QB so we can do reports and accounting and for the Bramble Berry site, we have a ‘linking’ program that downloads all the data so that’s incredibly helpful.

      We’ve had custom solutions (lots of $$$$) that didn’t work as well as Quckbooks Enterprise has for us (go figure).

  5. says

    Thanks for the post. One issue that always gets my knickers in a knot when trying to figure out what to keep and what to let go of in my product line is which criteria to place the most emphasis–profit margin? volume? The most obvious product to keep is the one that costs the least to make,has the highest margin and sells the best, but like most of life’s issues, these don’t always fit so neatly. I have more than one product that is not a huge seller, but is simple to make and has a much higher margin than some of my bread and butter items. Should I dump it because it’s not in my top 50% of sales? Others are simple to make and have a decent margin, but sell for such a low price that I have to sell tons to make any money. I keep it because it snags the customer who wants to buy a small item, and sometimes encourages them to buy more….

    Also, different products (and price points and packaging) hit different markets. One thing that tortures me: having/selling smaller numbers of a variety of products adds up, and quite likely also contributes to the appeal for many of my customers. One-time tourists like having choices, while the loyal repeat customers enjoy having “one more way” to show their support. I agonize between having enough to catch/keep attention and so much that you can’t see the forest for the trees.

    I get that the data allows me to make decisions that are not based on intuition, but how to parse the nuances of the data is a much more daunting task for this non-business major….

    • Anne-Marie says

      That is a fantastic question.

      What we do is the following:

      We break down each item into categories and then discontinue the bottom from each of those categories. This allows us to compare apples to apples.

      At the very least, you’ll give each category the opportunity to have a new winner for each season.

      We carry a lot of products – and so I feel your pain. While we don’t have a Pareto Principle (20% of products sell 80% of the sales) issue, we do carry a lot of products to please a lot of people because every sale counts.

      However, I look at it like this: If I only have space for 2500 products, then by keeping products that are selling badly, I’m taking away the opportunity for a new product to come in and become a best seller.

      You’ll get better year after year – I promise you!

  6. says

    Great article! I’m a numbers guy and I’ve been trying to look at different things that my company provides to determine whether or not to continue services or put more emphasis on other services.

    • Anne-Marie says

      We LOVE numbers and with very rare exception, they always tell the true story.

      I recently had someone SWEAR to me that they were producing a certain amount of product per hour. They wanted to price something on their gut “I know we’re producing that!” and I had them humor me … and by golly, if they weren’t actually producing 25% less product than they said they were.

      Numbers don’t lie …

  7. Anna says

    Hey Anne-Marie! Great article! I absolutely love Bramble Berry! I sell only one product but offer it in many different scents. I have “Seasonal Collections” in which the fragrances are always changing. Each fragrance has limited quantities. I sell out so fast of everything!

  8. says

    This article was absolutely perfect for me today! I am struggling on a few bars I have that some people think are great but I can’t depend on the same people purchasing these each month. By the way, the Oatmeal, Milk, and Honey……I CANNOT keep in stock. I am constantly creating with it and customers are purchasing 10-20 bars at a time!
    Thanks again for the eye opening article! As always! :)

    • says

      Knowing what your customers want and what will help your business grow can be a bit tricky, but we are here to help you out as much as we can! The Oatmeal, Milk, and Honey is one of top-selling fragrances and we love it SO much!
      -Becky with Bramble Berry

  9. nadia says

    Hi AnnMarie! I just want to say thx for all you do! You are truly a blessing. I was layed off a yr ago and decided hey i love making bathing products, just go for it….my gut was butterflying like crazy lol any how, I am seeing great progress with my newly found business and I am happy I took the jump. Single parent and being in control of my business is very empowering. You play such a big role with all the advice and blogs. I am so greatful. Keep up the great work and I also had a scent that you sold that happened to be my #1 seller but now discontinued:((( tropical lemongrass…so sad.

    • Anne-Marie says

      Hi Nadia,

      Oh wow, thank you so much for your wonderful comment and feedback. I am so pleased that you find value in my writing and the blog =) I agree that being in control of your business (especially as a single parent) is key and I love that you have that same attitude. That Tropical Lemongrass was a surplus item BUT I can totally re-order it for you if you ever need (gasp) 25 pounds of it. Just let me know! And than you again for being a reader (and a customer). =)