7 minute read

How to Forecast Holiday Sales

Start getting ready for a busy holiday season now by estimating the number of sales you can expect.

Avatar image for Abby Feuer by Abby Feuer
Title image for the article
Want to open your own Etsy shop? Create your shop today!

As a small-business owner, you are constantly learning from experience. With every sale or conversation about your products, you’re building up a storehouse of historical information to draw upon in the future. The more tidbits you absorb, the better your predictions — or forecasts — become. Pillow designer and maker Suzi Dia of The Pillow Studio in Montclair, New Jersey has seen her ability to forecast improve over time. "Over two years, I’ve noticed that even though there are some fabrics that are consistently favorites, customers tend to purchase these fabrics in colors based on the season,” Suzi says. “Lighter, airy pastels are popular in the spring and summer while the darker, deeper reds, oranges and browns start to get more orders this time of year."

Those pieces of information can help you forecast roughly how many sales you’ll make during a given period of time, which can be especially helpful as you prepare for the holidays – typically the busiest time of year for many Etsy sellers. With the holidays quickly approaching, forecasting your sales is an important step in getting ahead on production, managing your time and evaluating success. If you’ve been selling on Etsy for at least a few months, you can forecast holiday sales by exploring how your orders have increased or decreased over time. If you’re new to Etsy, you can conduct research to reach the same end. Creating these estimates doesn’t require heavy analysis or Excel skills (unless you’re into that, like me!). The key is finding the right mix of intuition, stats and research for you and your business. The tips below will help you get started.

Crunch the Numbers

Calculating your expected growth during the holiday months is step one in your forecast. If you have at least a year's worth of historical data for your shop, decide whether you’ll look at your growth in orders or revenue. Then, calculate your growth rate by comparing this number per month last year to the same month this year.

growth-rate
growth-rate-example

Repeat this calculation for as many months as possible; you could even look back an additional year. If you’ve experienced more recent success, consider calculating your growth rate from month to month in the current year, comparing, for example, your sales in April to those in May. This won’t take seasonality into account, but it will help you best use the information you have.

After reviewing these numbers, determine the growth rate that you’ll use in your holiday sales forecast. You could go with an overall average growth rate, a rate that you saw repeatedly during the busiest months, or some other combination. Just make sure your choice accounts for holiday-specific plans. Have you added items to your shop that will be popular gifts? Do you have any big marketing plans? Will you be selling through channels other than Etsy? This is where your intuition comes in.

Now that you’ve settled on a growth rate, forecast away! Multiply that rate by your revenue or orders in October, November and December of last year to determine your expectations for this year. You can do one calculation for the quarter or break it down monthly or even weekly. If you offer lots of different items, you could break your forecast down further to make plans per item in your product line.

Sales Forecast = (100% + Growth Rate) X Number of Sales

For example, if you made 30 sales last October and your selected growth rate is 33%  percent, you can expect to make 40 sales this October.

If you’re new to this process or to Etsy, the best approach is to learn from others. When she first started out, Suzi looked at the average annual sales of shops selling similar items at similar price points to estimate how many pillows she could expect to sell. She then created a formula that took into account the cost and amount of fabric, supplies and fabrication time to ensure that her pricing allowed her to maintain a viable business. To get more specific information, join an Etsy Team and ask other sellers what kind of holiday sales they've experienced in past years.

Try Different Approaches

There is more than one way to collect information to forecast your sales. Lauren Falkowski, founder of Lolafalk in Brooklyn, New York makes note of product trends as she handcrafts each item. Then, checks those hunches against the stats in her shop. “I don't necessarily have a hard data-driven approach, more like high-level speculation that's come with observation over the years,” she says. “I've gotten to know what moves throughout the year based on the season.”

In contrast, when filing her taxes each quarter, Suzi tracks the hard numbers, calculating her revenue to inform the quarter ahead. “I take a gauge of my revenue for the past month and quarter and look at how it compares to the same season last year,” she says. “I then take into account my personal goals and add social media marketing plans on top.” In doing this exercise last year, Suzi discovered that her holiday rush tends to happen a bit earlier in the season, in September and October, when people are getting their homes ready for the holidays.

Prepare Accordingly

Before holiday orders start pouring in, Suzi stocks up on supplies based on her predictions. “Because my pillows are all made to order, it is almost impossible for me to make products in anticipation of my expected sales," she says. "Instead, I use my sales forecast to determine which fabrics will be most popular and then I try to stock up on those materials so that I’m able to make the pillows as quickly as possible when orders come in.”

Lauren uses her holiday forecast to get a head start on production of her colorful leather goods. “I want to set myself up so that I can continue to sell both ready-to-ship and customer color orders as close to the holiday sales deadline as possible,” she says. “I’m starting to make larger quantities of the basic colors now so that I can be free to do custom work when things get busy.”

Learn As You Go

Continue to learn and grow by referring to your forecast throughout the season. If you’re lagging behind your prediction, read 10 Holiday Marketing Tips for Etsy Sellers and try a new tactic for promoting your shop. If you’re accelerating past your estimate, take a step back to determine if you need help, a more streamlined process or additional supplies. Read Getting Help From Your Community When You Need It for more advice on prioritizing tasks and finding help. Once the holiday rush is behind you, review your numbers and jot down your thoughts and suggested changes for next year.

Avatar image for Abby Feuer Words by Abby Feuer

Abby Feuer is a manager on Etsy’s Seller Development Team. She got her MBA from Berkeley and when she’s not nerding out on business topics like pricing, she can be found riding her bike, teaching yoga, dreaming about having a dog and creating out-of-this-world breakfast sandwiches.

Connect with the community

Looking for a place to share questions and spark new conversations?

Join the conversation in the Forums and get inspired

See more

Latest articles

The Ultimate Guide to Pricing

The Ultimate Guide to Pricing

Get the smartest, most up-to-date guidance on developing your pricing strategy to reach new customers, increase profits, and grow your business.

How to Craft a Killer About Section

How to Craft a Killer About Section

Telling the story behind your business can create a connection with customers – and boost your visibility. Learn how Etsy sellers are doing just that.

The Essentials of Online Advertising

The Essentials of Online Advertising

Advertising is one way to help shoppers discover your products. Get to know the basics of online advertising to accelerate your marketing efforts.

Tools for Growing Your Business—and How to Fit Them Into Your Pricing Strategy

Tools for Growing Your Business—and How to Fit Them Into Your Pricing Strategy

Learn how discounts, advertising, and sales events can help support the goals you have for your shop while protecting your bottom line.