Let’s continue the journey of listening to the stories that the numbers our Etsy shop tell us. As a review, a ratio is the story that two numbers tell when they are together. So far, we have explored apopularity ratio called the heart-to-sale ratio and a couple of inventory ratios. This week, we will explore a ratio concerning your shop’s sales.
Sales Per Day Ratio:
The Sales Per Day Ratio tells us historically how many sales your shop has made per day that your shop has been open for business.
How to Calculate:
Sales Per Day Ratio = (Total sales you have made) divided by (The # of days your shop has been open)
You can find the number of sales you have made by looking on the right sidebar of your shop’s homepage under other items. You can find how the # of days your shop has been open by first looking at your join date in the info section on the right sidebar of your shop (if you didn’t start selling right away, you’ll have to try to remember when that date was. Or you can go to your Etsy bill to see when you first listed an item). Go to this website and type in your join date as the start date, today’s date as the end date, and then click the “calculate duration” button. The website will then tell you how many days your shop has been open. Find a calculator, and take the first number and divide by the second. The number you calculated is your Sales Per Day ratio.
This number tells you how many sales you make per day. If your number was 3.2, this means that you make about 3 sales per day
Fill your number into these sentences to get your interpretation:
Historically, I have made about _____ sales each day my shop has been open.
During any given day, I will make about _____ sales.
Predicting Your Next Sale:
Sometimes, ratios can attempt to make a forecast or prediction. Let’s try to predict when you will get your next sale.
Next Sale Prediction = (One) divided by (Sales Per Day Ratio from above)
This ratio tells you an estimate of how many days you will have to wait until you receive your next sale. (Note: If it is a decimal, you can multiply that decimal by 24 and find out how many hours until your next sale and replace hours for days in the following interpretation).
Fill this number into the following sentences to get your interpretation:
Based on historical trends, I will get my next sale in about _____ days.
As a rough prediction, I will make a sale in about _____ days.
Variables to Consider:
There are quite a few things that could influence the results of your calculations, including the following:
- You opened your shop a long time before you actually started selling products.
- You have had major rushes on your products and/or extreme sales droughts.
- Your sales are very sporadic.
- Your sales come in clusters, where one customer buys multiple items.
- You may have started or stopped an effective marketing or advertising push.
You can get a more accurate result if you use the date you really got serious about your business. You could also calculate this ratio for only one month at a time to get rid of seasonable variations. There are a host of variables and each shop should interpret their data in light of their shop’s exact circumstances.
How to Use This Information:
These ratios can help us evaluate how your shop is doing and help you set goals. I use this ratio as a daily goal for my shop. Currently, I make about 2 sales per day. If I sell nothing or only one item, I know I am behind my average. If I sell two items in a day, I know I am having an average day. If I sell more than two items, I know I am having a pretty good sales day. (Of course, you need to take into consideration how much profit you make on an item and other variables as well). The prediction ratio can give us an estimate about when to expect our next sale. We can also set goals for how long it takes our shop to get our next sale and compare our actual results to our goal.
Everyone loves getting a sale! It is fun and worthy of a happy dance. Next time you get a sale, remember—there is a numerical story behind that transaction. Until next time, keep crunching numbers!