5 Important Tricks to Maximize Sales Velocity in eCommerce Business in 2023
In our everyday life, we get hundreds of notifications on our mobile phones through the various applications we have downloaded. They are loaded with new offers, flash sales, newly launched products and much more. Businesses are spending millions on such promotional activities through the help of campaigning and CRM tools. The ultimate goal of them is to create sales opportunities.
These sales opportunities help immensely to boost the presence of a company to their existing customers and also to new customers but the following question arises – Are those people continuing to buy products now or at any time in the future? This should be an important question that every eCommerce retailer should ask themselves. They should find out the rate of an increase or decrease in sales within a certain time frame. This captivating process is called sales velocity in eCommerce.
- What is Sales Velocity in eCommerce?
- Why is it Necessary for Businesses to Track Sales Velocity in eCommerce?
- 4 Important Factors That Impact Sales Velocity in eCommerce
- 5 Tricks for an eCommerce Business to Achieve High-Velocity Sales
- Conclusion: How Does Sales Velocity in eCommerce Help a Growing Business and How Can WareIQ Assist in 2023?
- Sales Velocity in eCommerce – FAQs
What is Sales Velocity in eCommerce?
Sales velocity in eCommerce is a term used to describe the measurement of revenue an eCommerce business earns within a given time period. It is a useful practice for brands to forecast their actual revenue generation in order to know the running cost & profit/loss of their business for the specified time period and how it is going to perform in the future.
WareIQ, an eCommerce fulfillment company, empowers online brands with a superior-tech platform to compete with Amazon like service levels by bringing their average delivery timelines from 5-10 days to 1-2 days.
Sales Velocity Formula
To calculate the sales velocity of an eCommerce business, you first need to bifurcate the business into segments such as small, medium and large. As every company has its unique definition of what constitutes each segment, the seller should divide them accordingly.
After determining the market segments, apply the sales velocity formula for each one of them.
Sales Velocity = (Total number of Opportunities x Deal Value x Win Rate) / Length of Sales Cycle(a time period)
Why is it Necessary for Businesses to Track Sales Velocity in eCommerce?
The capacity of a business to thrive and develop is largely determined by sales velocity in eCommerce. The quicker prospects move through your pipeline, the better your chances are of maintaining high velocity sales. As a result, high velocity sales reflect that a business is generating a lot of income in a short amount of time.
Tracking sales velocity in eCommerce over time helps a seller to compare their company’s performance to that of other companies, the efficacy of particular departments or areas and evaluate how changes in sales processes affect an organization, for better or worse.
Understanding sales velocity in eCommerce can also assist companies in better forecasting and determining how to optimize the sales process for faster and more high velocity sales.
4 Important Factors That Impact Sales Velocity in eCommerce
The four factors that impact sales velocity in eCommerce are and help to high velocity sales:
- Number of Opportunities(Qualified Leads)
- Average Deal Value
- Win/Conversion Rate
- Duration of Sales Cycle
Number of Opportunities(Qualified Leads)
A certain quantity of opportunities is always in your pipeline. Check to see if they’re legitimate opportunities. Your bottom line will suffer if your pipeline is full of junk leads with only a few that have a possibility of converting.
Average Deal Value
In every transaction, the most important resource for both parties involved is time. Make sure you’re getting the most out of it. For both your prospect and yourself, incorporating offers or add-ons will improve the calibre of leads while also raising your average deal value and high velocity sales.
It is a lot more relevant for companies offering software as a service or businesses that use the subscription model, where customer lifetime value is the most important factor for the business.
Your average win rate is determined by the number of high-quality leads you generate. To find the win rate, divide the number of sales achieved by the total number of sales opportunities that came across.
It can later be subcategorized into SQL and MQL.
- SQL or Sales Qualified Leads are the leads that are converted into sales whereas,
- MQL or Marketing Qualified Leads are the leads that may get converted into sales in the future.
Duration of Sales Cycle
This is the only aspect of sales velocity in eCommerce that you should avoid increasing. Shortening your average sales cycle and closing more quality deals faster can be accomplished by creating a more efficient sales process, revising your sales playbook and occasionally adding manpower to your sales force.
5 Tricks for an eCommerce Business to Achieve High-Velocity Sales
Once an eCommerce company’s sales velocity has been precisely determined, it can be improved by increasing the number of opportunities, average deal size and win rate or shortening the sales cycle. Here are five tricks you can use in 2023 to achieve high-velocity sales.
Increase the Number of Qualified Leads
Sales velocity in eCommerce can be increased by increasing sales opportunities and sales opportunities can be increased by converting leads into qualified leads.
A lead is a potential customer who has shown interest in a business by reaching out and interacting with it through inquiries through calls and emails and attending a seminar or exhibition by the business, etc. Leads are then turned into sales after the business takes care to qualify them within time. Conversely, an opportunity is a qualified lead. It means that the business has dealt with the lead and then converted it into a sale.
A pipeline full of leads isn’t always a positive thing as it might cause problems if the leads aren’t thoroughly qualified. Concentrate your efforts on those who are a good fit for your solution.
Focus on lead quality rather than quantity to improve the number of good chances in your pipeline. It’s preferable to have a smaller number of high-quality leads than a large number of low-quality leads. Also, keep your expectations in check. Keep doing what’s working for your company. If the solution is best suited for small firms, don’t approach an eCommerce giant expecting to make a quick sale. There will always be opportunities to extend your consumer base but it is critical to keep your expectations realistic.
Elevate the Average Deal Size
A product is sold once its value matches or surpasses the price. Many times, a customer is willing to buy a product but they may not have enough money and sometimes the customer has money but they don’t find that the value of the product matches the pricing so a seller needs to match that value and persuade the customer. Boosting average deal size can be explained as accurately as connecting value and pricing.
When selling, one of your major concerns should be to focus on the customer’s needs and pain points. Make each customer’s presentation unique and deliver your solution in a way that demonstrates how it can satisfy their needs and alleviate their problems. Customers should regard you as a consultant who can assist them in finding a valued solution rather than a salesperson seeking to meet given targets.
Also, make sure you’re using your time wisely. Don’t rush anyone through the process but give bigger opportunities with larger clients more time and consideration. You’ll be able to devote more time to the deals that will have a bigger impact if you finish your smaller deals faster.
Now it’s time to start building and nurturing relationships. Building strong, mutually beneficial relationships with consumers will increase the average deal size significantly. CRM software makes this simple, allowing users to maintain customer connections and provide additional value to both buyers and sellers.
Customers may leave your sales pipeline for a variety of reasons. Identifying why your consumers are or aren’t buying is critical for optimizing your conversion rate, whether it’s due to a rival or their lack of enthusiasm to address a problem.
Ensure that you undertake a thorough sales discovery at the onset of your relationship with the consumer. Recognize why the customer is looking for a solution and position your company as the answer. Match each of their requirements to a feature of your solution. Remember to emphasize the risks of not jumping at the opportunity as well as the advantages of fixing the problem.
Keep in mind that your sales process and the buyer’s journey are similar but not identical. Be patient with customers as they go through the process of making a purchase decision.
Analyze your sales process to figure out where the customers are getting out of the deal. The problem might be that you need different lead qualification standards or that your representatives need more value demonstration practice. Find areas of struggle in your sales process, identify the problem and take action to resolve it.
Reduce the Duration of the Sales Cycle
Every transaction is unique and the amount of time you spend selling to each consumer will vary. Smaller and less established organizations can make faster judgments since they have fewer requirements and stakeholders to persuade. Understanding the size of a company and its desire to solve a problem will help you determine how soon you can sell to them.
When a customer contacts you, don’t be slow to answer. Reach out as soon as a lead has been qualified. If you’re further along in the sales process and they’re contacting you with concerns, make it a point to get them the information they need as soon as possible.
Another strategy to shorten your sales cycle is to have ready-to-distribute material. Customers should have access to blogs, case studies, tutorials and product overviews. By avoiding any back-and-forth with queries and responses, you will save time.
If you notice that your sales funnel is sluggish, it’s usually because of this. Trust your instincts and respond as quickly as possible.
Accelerate Growth with High Velocity Sales
A full pipeline does not always imply a productive pipeline. Keep a close eye on sales velocity and the four major factors that influence it. Be careful to measure it on a regular basis and keep track of any changes.
Conclusion: How Does Sales Velocity in eCommerce Help a Growing Business and How Can WareIQ Assist in 2023?
Sales velocity in eCommerce is a helpful tool used by businesses to calculate their sales with respect to different timeframes and scrutinize the reoccurring problems faced by potential buyers. Creating a sale is not the most difficult part but mitigating customer difficulties through easy product delivery, branded packaging, calculating MOQ, etc. should be the real concern.
In the process, most eCommerce companies get directly involved and waste their time and resources which reflects a failure in terms of sales velocity numbers (data). Comparatively, a lot of eCommerce companies are taking the help of 3PL fulfillment companies.
WareIQ is one of the trustworthy fulfillment companies that promises to be a vital resource to their partners.
In terms of the four factors that result in high velocity sales, here is how WareIQ can help with each one:
Number of Opportunities(Qualified Leads)
Our custom and highly advanced AI and ML-based WMS software have the following features:
- Deals immediately with your qualified leads
- Answers queries of confused buyers which persuades them to make a deal
- Reduces the frequency of RTOs
Average Deal Value
A company looks for lifelong loyal buyers to increase sales velocity in eCommerce. Companies can do this by convincing users that they are getting the best deal possible We make this possible by providing the following:
- Hassle-free fulfillment
- Personalized customer experiences
- Branded shipping
- Enabling high discounts
Conversion rates are enhanced by increasing sales through different techniques, such as selling on multiple channels and running flash sales and campaigns. Here’s how WareIQ can help:
- Through our integrations with multiple platforms, sellers can keep track of all their data, across channels, in one place.
- We solve problems that buyers may face in real-time through our tracking pages, customer support etc.
- We entice customers by providing same-day and next-day delivery at lower shipping costs.
Duration of Sales Cycle
In the eCommerce market, delivery timing plays an important role in a sale. Customers are willing to pay more to get their delivery as soon as possible. WareIQ helps businesses by providing the following:
- Multiple warehouses in prime locations minimize the delivery time and ultimately, the sales cycle time.
- We give retailers access to more than 20 of the fastest courier services in the country and smartly allocate orders to the most relevant and cheapest option.
- We take care of order fulfillment, from the moment an order is confirmed till the time it is successfully delivered to the customer.
- We offer fulfillment 24/7 which reduces time for retailers as well as their customers.
- Pan India Fulfillment & Darkstore Network: Plug-and-play fulfillment infrastructure with no minimums, which is compliant with Amazon Seller Flex, Flipkart Assured, Myntra and other marketplaces
- Inventory & Network Planning Excellence: Best-in-class AI models for sales forecasting, product segmentation, and inventory management to reduce inventory by 40% and increase revenue by 10%.
- Vertically Integrated Fulfillment Tech Stack: Our Fulfillment Tech Solution supports integrations with 20+ top marketplaces & D2C platforms, and prominent national, regional and hyperlocal couriers, enhancing reach by covering deliveries for 27,000+ pin codes
- Supply Chain Productivity Applications: Integrate a host of supply chain productivity apps with a single-click to your existing CRMs, ERPs & accounting software to manage your logistics workflows from one command center. Use Apps like RTO Shield to get 100% RTO protection, Branded Tracking to turn your order tracking page into a profitable marketing channel, and many more.
Trusted by 300+ top Indian brands, we are helping them accelerate online sales and expedite their growth through a synergistic combination of advanced technology, robust fulfillment infrastructure & seller enablement services!WareIQ is backed by leading global investors including Y Combinator, Funders Club, Flexport, Pioneer Fund, Soma Capital, and Emles Venture Partner.