Sales Velocity

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What Is Sales Velocity?

Sales velocity is the amount of revenue any company generates within a specific time frame. It is one of the most critical KPIs in your business that helps determine sales growth and underlying loopholes in a company. It also tells you about your sales pipeline and upcoming revenue. 

Significance of Sales Velocity in E-commerce Logistics

Sales velocity is a key factor in determining how successful your business is. Many companies include sales velocity because of the following reasons:- 

  • Calculating sales velocity helps you increase revenue and profit
  • It also gives you opportunities to improve your company
  • It enables you to prospect your business and gives you insights
  • It keeps track of your overall performance and presents a comparative study

How Sales Velocity Works 

To calculate your sales velocity, you need the following:-

  • Average order value: The average amount of money spent on each order placed by your customers
  • Total number of website visitors that came to your platform within a specific time frame
  • Conversion rate: Number of audiences who came to your website and became your customer 
  • Length of chosen time frame: Your sales velocity could be monthly, yearly, or quarterly. 

Once you have calculated these KPIs, you’ll have your sales velocity to help you determine your total revenue generated.

Use Case With Sales Velocity

Suppose your B2B sales team has 50 deals in their pipeline with an average size of AU$ 3,000 and an average win rate of 35%. According to your tracking device, your team will take roughly 28 days to convert leads to customers. 

Therefore, your sales velocity would be:-

(50 X AU$ 3,000 X 0.35) / 28 days

52,500 / 28 = AU$ 1,875 per day.
That’s how you can determine your sales velocity and, thereby, your success rate.

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