I received a question from a blog reader, Paul, on a recent Q&A post which I had initially planned to answer in the upcoming Questions and Answers #37. However as it turned out to be a more substantial answer, I’ve instead decided to give it a dedicated post.
Here is Paul’s original comment, so you can see what questions he had:
I was only just thinking today, I need to start planning for Christmas, and that I feel a few related questions needed asking, and there you go and mention it in this week’s Q&A!
My first question you already answered: When do you start planning for Christmas? (Now it seems! Or earlier…) I am currently doing the same, but I can feel September/October becoming a very busy period.
Second: I know this is a very open “length of string” question, but how much do you think your sales increase during this period? Yes, it depends on the type of product I guess. It’s my first year, so I don’t have previous years to look back on, and I’m fumbling in the dark really. I have two accounts, one selling gift packing and boxes which will obviously have a big increase, and the 2nd selling men’s shaving products, and the gift set side of this should find an increase too.
Ultimately, I’m not in a position where I’ll have Christmas excess stock hanging around as it sells all year round anyway, so my current strategy is pretty much to order as much as I can afford, taking into account cashflow, in readiness. It’s a bit of a dumb strategy but I don’t have much else to go on.
Finally, when do you see orders pick up in retail? October/November/December? I originally thought I had loads of time, but now realise December probably isn’t the best point to be aiming for, as many people will have purchased something before, especially taking into account delivery time scales.
Feel free to put this as a Q&A for next time, although I’d love some brief thoughts if you had some time.
Firstly, while some products are of course more seasonal than others, sales do pick up for nearly every niche before Christmas.
When exactly does this increase start?
Well there is no specific date where suddenly there is a huge jump in sales… it is actually a much more gradual and sustained increase which starts from late August/early September.
Summer is generally a very quiet period for a lot of eBay sellers (I’ve touched upon this topic in the past: http://andrewminalto.com/ebay-sales-going-down/) and as summer comes to an end sales will start to build up again before reaching their peak a little before Christmas.
Of course it goes without saying that this doesn’t apply to all products, as many will peak at other times of the year.
Usually you yourself are the best person to judge and predict seasonal sales, based on what has happened in past years, but if you’re a new seller and don’t have any first hand historical data to go by (as in Paul’s case) then you’ll have to rely on some third party tools to get this information.
One option for this is to use Google Trends, as in the above screenshots.
You simply head to this page, enter your search term (in this case a product) and set your search filters (date and location – make sure you set it to the country you sell in!).
You’ll then be presented with a graph showing the level of interest in that product over a certain period of time. Of course this is based on search queries and not hard sales data, so it only shows the general trend (hence the name!) and should be treated as a guide.
I actually recommend using Google Trends BEFORE you start selling any products as it’s a great way to quickly and easily get an overall picture of a product’s seasonality.
But as I always say, it is best to base your business decisions on as accurate data as you can, and in this case that means cold hard numbers… for that we turn to our old friend – TERAPEAK!
Using Terapeak you can get exact sales data for any product on eBay for up to 12 months. So what I like to do if I need to predict sales growth for a new product line or a new niche is to get the sales data for every month in the past year.
I’ll collect all this data from Terapeak and write it down in a spreadsheet so that I can easily analyse the results. You can also create some simple graphics in one or two clicks on Excel to make the data more visual and easy to read at a glance.
So once I’ve done this I will have a very good guide for the demand of that product over the year, which I can then apply to my own sales.
Say for example my sales for a certain product are:
- June – £1,000
- July – £750
- August – £1,100
And I now want to predict my sales figures for September – December, so I simply go to my spreadsheet and see what my results are like compared to the overall trend.
Let’s say last year’s overall sales were something like this:
- June – £100,000
- July – £70,000
- August – £95,000
- September – £115,000
- October – £145,000
- November – £170,000
- December – £195,000
Based on these numbers I can see that my results for June-August were largely as expected, based on the overall sales data, with some positive growth in July and August (where I outperformed in comparison to June).
I can then make some predictions for September – December, using the percentage increases as a guide.
For example, August to September saw a 21% increase in overall sales, which for me means roughly £1350. Then there was a 26% increase for September to October, which means roughly £1700 for me. Etc., etc.!
Of course it is not an exact science, and I will have to make adjustments as the months go by, but this is probably the most accurate way to gauge and predict demand for a product – as your decisions are based on real sales data (thanks to Terapeak!).
If you really don’t want to put in the work by collecting and organising the data, an easier option is to simply go to eBay Product Research and set the date range for October 01st to December 31st and then switch to Trends View to see how the total sales changed for the last 3 months of the previous year.
This won’t give you as accurate a result, but it is still a very good indicator and requires less work on your part!
One very important point to remember though – some items won’t have enough sales data for you to base your decisions on. For example if it’s a new, trendy item or if it’s something related to a big movie or game that has only come out this year, then last year’s data won’t really be relevant.
So please always take this into consideration when doing your research.
Whichever method you use, it’s then time to place your orders so that you’re ready for the Christmas sales boost. If you buy from China using sea freight then you need to be very organised as it can take months before you get your goods in hand, ready to sell.
The key is really to find the right balance – you don’t want to under order and have to turn away sales (it hurts me just writing that!) but at the same time you have to be cautious as you equally don’t want to be left with over-stock that you can’t shift.
This does depend a lot on the specific item, as if it’s something that sells reasonably well year round (as in Paul’s case) you can be a little more risky.
The holiday season is a huge opportunity for online sellers, and if you’re well prepared and ready for it, you’ll reap the biggest rewards.
I hope you found this post useful in gearing up for Christmas (and I hope all of your questions were answered Paul!).
Also, for some further tips and tricks to make the most out of Christmas, take a look at this post from last year: Turbocharge Your Christmas Sales
Otherwise, until next time!
All the best,