Estimating Sales: Product Vendors

April 13, 2006

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Product vendors may be an excellent source of sales data. If your new business is one that will have high inventory levels, product or warehouse facilities may be a potential source of sales data.

For example, assume you plan to open a grocery store. You would purchase the majority of your product from a primary grocery distributor. Usually a distributor of any significant size will have access to other grocery stores' sales in your trade area. This could be your starting point for your sales potential.

You will have to make adjustments to the sales figure based, for example, on site selection, competition, and marketing.

Warning

Be careful when dealing with product vendors to determine sales potential. Some may just tell you what you want to hear in order to get your business. Back up their forecasts with other sources.