What types of data need to be analyzed for a trading business? Having had the opportunity to help develop Business Intelligence/Business Analytics systems using IBM Cognos Business Intelligence (IBM Cognos BI), Tableau, Power BI, and Excel for several companies of this type, we are sharing our knowledge and experience with others
Businesses engaged in buying and selling should analyze data in the following main areas:
1. Selling products
– What are the top 10 best-selling products, categorized by brand, category, type, etc.? The specifics depend on each organization's perspective. Once this information is known, sales managers can develop strategies accordingly.
– Which products are highly profitable with high margins? Calculating gross profit by product would be very helpful.
– Which products haven't sold well in the past three months? (Eliminate seasonal products, as some may not sell year-round).
– Which products are unprofitable or have low margins, potentially even resulting in a loss on gross profit? Typically, buy-and-sell businesses have clearly defined purchase costs. Averaging the costs of selling and management by product is highly effective in identifying low-margin products that should be discontinued. Some managers might argue that certain products must be sold due to high competition and low margins. Management should consider developing new strategies that don't rely on price competition to ensure organizational sustainability, or exploring new products with fewer competitors to achieve higher margins.
2. Distribution Channels: Retail Stores or Shops/Sales
Typically, buy-and-sell businesses need a shop and sales team to help sell and distribute their products. These can be collectively referred to as distribution channels, as nowadays there are both online and offline channels. Most companies sell through multiple channels to make it easy for customers to purchase their products.
Online channels include:
– Selling on the company's own website
– Selling through marketplaces such as Lazada, 11Street, etc.
– Selling via Line@
– Selling via Instagram
– etc.
Offline channels include:
– Retail shops
– Catalogs
– Booths
– Sales through sales representatives/distributors
Data analysis typically considers distribution channels, such as
: – Which distribution channel generates the most revenue?
– Which channel has the highest cost of goods sold
? – Which channel yields the highest profit margin?
– Comparing profit/revenue x 100 for each channel to see which channel provides the highest profit margin, in order to focus on that distribution channel.
3. Inventory
– How long have the products been in stock? Categorizing stock into 30-day, 60-day, 90-day, 120-day, and over 120-day periods would be very beneficial. This is especially important for businesses dealing with perishable goods, requiring strategies to manage stock and sell it before it expires.
Data analysis for stock management includes:
– Indicating stock status: which products have more, less, or equal stock levels compared to customer orders or sales projections
. – Identifying which products have been in stock for extended periods, categorized by time period: 30 days, 60 days, 90 days, 120 days, and over 120 days.
If anyone would like to share their knowledge and experiences, please feel free to do so.
Or if you have any questions, R&D BI Co., Ltd. is happy to assist you.
Written by: Nuchanat Rongrong, Managing Director,
Trainer & Consultant, Business Intelligence / Business Analytics.
Collection of Business Analytics
For more information, please contact us at https://demo.rdbi.co.th/contact/,
via our
Line official account: @rdbi,
or email sales@rdbi.co.th.