Sales growth Rate Factor

Sales growth Rate Factor

There are two important factors for sales growth rate i.e. Sales price & sales volume.

1.    Sales Price

If sales price is decreasing, it will probably have negative impact on the sales growth. For example 10,000 @ 10 per unit = 100,000 (last year) & 11,000 @ 9 per unit = 99,000 (this year). Example clearly shows that despite an increase in sales volume due to cut in sales price; the total sales growth is negative.

2.    Sales Volume

Sales volume is another important factor for sales growth. An increase in sales volume would normally result in sales growth (except in deflation), similarly an decrease in volume would squeeze the total sales (except in inflation).

It is therefore important to remember that both sales price & sales volume has fundamental role in the sales growth , and organization would love to increase both sales volume & sale price ( both has direct relationship with Sales growth).