Stock Issues & Planning to avoid disappointment
By now we’ve all heard news of stock shortages due to shortages of raw material, parts supply and shipping delays, and I have no doubt that it has affected most businesses in some way or another!
I don’t see these issues fixing themselves for a very long time yet either, so as an industry we all need to start working smarter.
As distributors, I’m sure at some point in time you’ve been asked by your suppliers for forecasts, and I know I have asked many of you for forecasts over the years. Usually this is met with ‘I can’t forecast as I don’t know what projects my customers have’, or ‘I wouldn’t have clue what I need. Forecasting would just be a guess!’.
Well, if you want stock in the coming years you will have to learn how to forecast! Having been based down under for the majority of my consumer electronics career, I had to do forecasts in pretty much every import distribution role I held. From 1993 at JANDS NZ through to 2010 at Synergy Audio Australia and the roles in-between, I had to forecast, so here’s my tips on forecasting to help you, your manufacturers, and also your dealers…
- Run reports on your sales for the last year or 2 if you can.
- Run them by product by month if you can too - This is great for looking at patterns
- Of course the longer the period you can run a report for, the clearer any pattern will be!
- Understand your customers trends, favourite products, needs & pipeline as much as you can. Help them to understand their own patterns and biases too. Often dealers think there is no trend but when you look closely at the sales data, there is nearly always a pattern, or favourite product!
- Ask your customers to create a ‘Best Guess’ forecast for you. Even if you only do this every 3 months, it will help.
- A big ask but the more of these you get, the clearer your picture becomes
- Collate all the data! Numbers of each product sold, numbers within dealer forecasts (Especially pipeline deals)
- Then with your trend by month data, create a trend line and divide all of your sales into this by month.
- I like to give each month a percentage based on the volume of sales, so 8.33% per month if they’re all equal (which they never are), so maybe 8% January, 6.5% February, 8% March etc based on your Trend Line, and it should all add up to 100% of course ;-)
- You now break your yearly total sales down by the trend line percentages and you have a basic forecast!
Now this might all seem like a lot of work but once you’ve done it, its simply a case of putting the annual sales figures in, and our expected growth, and bingo, you have it.
I’ve added a downloadable spreadsheet to the website, so that you can simply fill in your own product model numbers and monthly percentages etc. There is even basic instructions on filling it in.
This will help increase sales! I’ve seen for years and years, and it does help focus you and your teams
Now I expect forecasts from you all ;-)
Apple User file - Master Forecast Calendar year.numbers
Microsoft User file - Master Forecast Calendar year.xlsx