Question on Sales................?

Question

Does asnyone know what is a sales forecast and what are the dangers involved in using sales force estimates to forecast a product's future sales?

Answer 1

A sales forecast is an essential tool for managing a business of any size. It is a month-by-month forecast of the level of sales you expect to achieve. Most businesses draw up a sales forecast once a year.

Armed with this information you can rapidly identify problems and opportunities - and do something about them. It can prepare you for the level of manufacturing necessary to meet sales, and ensure you don't tie up much-needed funds in overstocking your warehouse. It makes you think about your current prices and whether to change them, etc.

A sales force is actually your starting point in collecting information to feed into a sales forecast. However there is a possibility of conflict of interest here. If your sales force knows that sales will fall, would they dare tell you so? The last thing they want is for you to cut the sales force numbers. They may forecast a level of sales which is not achievable, that is why the co. policy must be to hold them to their forecast and at the outset confirm with them that they have submitted achievable figures barring unforeseen circumstances.

Subjects covered at the 1st link:
Introduction
A basis for sales forecasts
Your sales assumptions
Developing your forecast
Avoiding forecasting pitfalls
Creating a sales plan

Subjects covered at the 2nd link:
The Importance of Sales Forecasting
What Information Is Needed to Prepare a Sales Forecast?
How Long and How Often Should One Forecast?
Forecasting Techniques
How Sales Forecasting Applies to a New Business
How to Produce a Sales Forecast You and Your Staff Can Believe In
Benchmarking - Actual Sales vs. Forecast
Who Should Prepare Sales Forecasts?
Software as a Tool for Sales Forecasting
Resources

Answer 2

A sales forecast is basically a best guess for future events based upon certain criteria. You are only estimating how many "widgets" you can sell based upon current information. The down side is that your estimates could be off or outside factors could affect sales, such as a natural disaster, recession, etc., Another factor could be that the product isn't as well received for various reasons, such as price, performance, competition, etc.,