# Seasonality factor: calculation algorithm. Seasonal demand goods

It's no secret that some goods are betterare sold in summer, others in winter. There are many examples: ice cream, warm clothes and so on. Most people do not pay much attention to these jumps, however, if you have your own business, you need to orient yourself in seasonality. It was for this purpose that this article was written. It will help to understand what the seasonality factor is, teach him how to calculate, so that you can plan your future sales competently.

If you do not think about the seasonality of those or othergoods, the business will constantly suffer losses, and you can not normally plan your activities. So, it's time to find out what the seasonality factor is, what its application is in real life and, naturally, how it can be calculated.

## What it is?

The seasonality factor is a term thatevery marketer should know, since it is used everywhere and plays a very important role in the proper planning of sales. This is a coefficient that demonstrates how much the sales of a particular product increase or decrease depending on the season in which the sale takes place.

Accordingly, if the range of tradingpoints there is a large number of seasonal goods, you must learn how to handle this coefficient, because it will achieve a lot. But how exactly can you use the seasonality factor in real life?

## What is this coefficient for?

This ratio is far from being just a figureOn paper, which can be calculated and put aside. It plays a very important role in real business if you are trading season goods. The scope of this coefficient is extremely broad, but first of all it should be noted that it is used to predict future activities. This means that you will be able to decide for which month you want to order more goods of one type or another, and which one - less, how to position them, to provide more sales, and so on.

Accordingly, with the help of this coefficient, youyou can also plan marketing activities, and together with them the advertising budget, which will be allocated to attract customers' attention to seasonal goods. As you can see, this indicator can play a key role in your activity. If you do not pay attention to it, your advertising budget will in most cases be wasted.

Accordingly, now you know a little theoryabout this coefficient, so it's time to move on to practice, namely to the question of calculating this coefficient. It can be done quite simply, but to get reliable results you will have to do quite a large amount of work. However, this article will guide you step-by-step through all stages of the calculation, so that eventually you can independently know this indicator if you have the necessary financial information.

## Periods of use

Before considering itselfalgorithm of calculation, it is necessary to clarify one important detail. The fact is that this coefficient is universal, that is, it can be used for a wide variety of periods and time periods. This means that you can even calculate the seasonality factor for one week of your activity to clarify which of the days of the week the trade is best and to what extent worse.

Naturally, this has its own characteristics,for example, you will need to order the goods several times a week to determine the efficiency as accurately as possible, as well as take into account some other factors. It is also worth noting that a week is too short a period that can not give you a complete idea of ​​how good or bad things are sold on a particular day of the week.

Thus, it is necessary to focus ontraditional period for this type of settlement. This means that average monthly sales are taken into account in order to calculate the coefficient for each of the months of the year. As a result, you will be able to use the obtained coefficients in order to predict a successful implementation immediately for several months ahead, which is a very useful tool for planning activities.

So, now you understand what is best inas a period of time to choose a month and at the same time to consider all periods in the context of one year to conduct a full comparison. Well, now you have enough information to go from the first to the last step in calculating the seasonality factor.

## Obtaining statistical data

If you want to conduct a full and effectiveplanning sales with this ratio, you will need a fairly extensive statistics. In the range of your store there can be quite a lot of different seasonal products, so you immediately need to understand that the calculation should be done separately for each of them.

So, choose one of the goods and raisestatistics of its sales every month during the year. The deeper in the statistics you can dig, the more accurate you will get the data. Of course, you can use the data of one year, but it will be best to have at hand sales statistics for the last 2-3 years at least. All seasonal demand products must have their own sales statistics, with which you will work in the future to obtain a ratio.

To continue working, you need to calculateaverage sales for each year, summarizing sales for each month, and then dividing them by twelve, that is, by the number of months in a year. Now you are ready to get such a desired coefficient.

## Coefficient for each month

The first step is to obtain a coefficient forevery month of the year. This is quite simple: you need to take the sales figure for each month and divide it by the average sales figure for the year. The number should be in the region of one. If it is less than one, it means that in a particular month the goods were sold worse, if more - accordingly, the goods were sold better than the average for the year.

Strictly speaking, here you have received the coefficientseasonality. You know, in what month your goods are sold better, and in what is worse, and now you can accordingly carry out forecasting of sales and promotions. If you sell windows, you can find out which month it is better to make discounts on plastic windows; if you sell warm clothes - you can understand when to order it in large quantities, and when not to order at all. However, if you want to get the maximum result, the work does not end there.

## Average ratio

Before you start making discounts onplastic windows, ice cream or fur coats, it is worth remembering that in order to get the best result you should have more in-depth statistics for the last few years. If you managed to get such information, you should calculate the coefficients for each of the months in each year, and then calculate the arithmetic mean for each month. The result may differ from the original, and the reason for this is the fact that your data has become more accurate, so the calculations have been able to give a more reliable attitude.

## Expert opinion

Well, the last thing you should not forget isexpert opinion. What is meant by this term? This consideration of all the additional aspects that could affect sales in one of those months that were considered in the calculation. This may be a shortage of goods or its extensive supply; the beginning of the sale of goods, which led to a huge demand for it. It can even be a financial crisis, which was very much felt in one of the calendar periods. Without an expert assessment, your ratio will be too mathematical, divorced from reality. That's why it's recommended to contact marketing specialists to get the best result.

Liked:
0
The installed capacity of consumers and
Price elasticity of demand: formula
Inflation rate
Coefficient of liquidity of the enterprise
Coefficient of solvency. Formula
Revenues. Formula for calculation
How to calculate the economic
Demand formation and sales promotion
Income effect and substitution effect:
Categories
Top Posts