In order to generate profitable sales, you must know what books are moving, where they are selling and how profitably. To get this information you need thorough analysis. Sales analysis represents a comprehensive assessment of a company's revenue data, used to detect strengths and weaknesses in the your marketing efforts. This analysis should include prior revenue performance to view trends over the years, as well as a comparison of actual to forecast sales data. Once this information is compiled in a useful format, sales analysis will allow you to see which titles are selling, their profit margin, your largest clients and marketing effectiveness. Armed with this knowledge, you can evaluate your company’s current performance, and guide future directions of your publishing program.

Revenue can be classified into many categories. Income figures may be reported in dollars, units, gross margin, product lines, geographic areas, customers, etc. However, in "the real world" you might not be able to obtain all the information needed to track every one of these categories. This is especially true for those publishers that use distributors. Most distributors are pretty poor at providing detailed sales information to their publisher clients. However, in most cases you should be able to track your revenue sources, dollar and unit sales, as well as sales per category. If you can do this, you are in pretty good shape. However, you should categorize your sales data in a way that will provide you with the most relevant and meaningful information.

Annual & Monthly Sales
Annual income is the starting point in sales analysis and the first indication of how a company is faring in the marketplace. Yearly income figures will show if your sales volume is increasing or decreasing over time. By estimating the size of the industry, you can find out if your business is keeping pace with the total market, or if you are actually gaining market share from the competition. Monthly income for the past 12 months will help you determine the business’ seasonality. Knowing your seasonal sales cycles, might aid with strategic decisions on when to publish new titles, or find new markets to offset low revenue periods.

Revenue Sources & Way’s To Track Them
Once you have all the necessary information, put the data in a spreadsheet so you can easily sort and view the different categories. One of the first things you want to find out, is where your money comes from. Break down your income into different revenue sources such as direct sales, trade, subscriptions, schools, libraries, internet, direct mail, gift shops, distributors and special sales.

To get a clear picture of what's selling, list all your titles by descending dollar volume. Calculate the percentage for each title to find out how much your top 5, 10 or 15 titles account for as well as average unit price. Once compiled, you can analyze why some titles are more successful than others, what is the subject matter, who is the author and what the price range is. You may also find out if it possible to follow up a title with a revised edition or turn one book into a series. The ranking of units is similar to dollar income. It tells you which titles have the highest volume and their percentages. Ask yourself "why" and "where" are they selling. How price sensitive are these books, would it be possible to boost the profit margin by slightly increasing the price and still sell a the same quantity of these titles?

Tracking by gross margin determines the effectiveness of your sale and is an important tool in efforts to increase the profit margin. Gross margin analysis reveals the real breadwinners by showing which titles contribute the most to the bottom line. From an economic point of view, these are the kind of titles you want to seek out and publish more of. Often publishers realize that the titles with the highest volume or dollar revenue may not have the best gross margins. Sales of inexpensive titles in large quantities will give you higher dollar and unit sales, but it might cost you on the bottom line.

Examine income by customer. If you rely on a few major clients, your company could be adversely affected by a downturn with a major customers’ business. The more diverse your customer base is, the less vulnerable you are. When performing this analysis, it is often useful to break down revenue according to customer type such as: schools, libraries, bookstores, or individual consumers, to spot your strong market areas as well as sectors that could be improved.

Most publishers have titles that span over several categories. By performing a sales by category analysis you can locate which categories bring in the most revenue, how many titles each one has, and average income per title. When combined with gross margin sales, the report should indicate how profitable each category is, and the average profitability per title in the group. This analysis may reveal that you should publish more of a certain category to maximize your revenue and profit potential.

Marketing Plan and Effectiveness
Maximize your marketing efforts by tracking how much and what percentage of income is derived from your different programs such as: advertising, catalogs, direct mail, telemarketing etc. To view earnings (and related costs) include a breakdown of the corresponding expenses and then run percentages to find out the success rate of your marketing efforts. With this data you will be able to shift your strategy to maximize the effectiveness of your marketing program. It is also a good idea to identify where your titles are selling by territory. Besides showing where your books sell, you will get an indication of the strength of your sales.

Conclusion
You can never have too much knowledge about your titles or your customers. Obtaining as much information as possible by analyzing your reports can help you to uncover potential problems and increase your revenues. Sales tracking lays the foundation for better revenue performance, more accurate forecasting, improved market position, planning and inventory control. It also helps you evaluate the proper product mix and the effectiveness of advertising and promotional activities, as well as your channels of distribution.

Most importantly, find patterns and duplicate the processes that resulted in the best and most profitable results. If some titles or categories are doing better than others, you probably want to publish more of those books. It is equally important to find out why some titles or book series do poorly so you can correct the situation, or maybe decide to drop them. This all goes back to the basics of marketing – You want to spend most of your time and efforts in the areas where you make the most money! However, you can only do this if you know where your money is coming from.