---
title: "Seven New Concepts About 'Sales Volume'"
description: "The physical manifestation of sales volume is the transfer of products. Tracking product movement can provide new insights into sales volume and reveal new ways to increase it. In most companies, salespeople talk about 'sales volume' constantly, and companies often use it as a yardstick for 'marketing heroes.' However, the sales volume everyone talks about daily is actually 'gross sales volume,' a numerical symbol that does not represent the true market situation."
author: "郭旭"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2015-01-09"
language: "en"
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---

# Seven New Concepts About 'Sales Volume'

> The physical manifestation of sales volume is the transfer of products. Tracking product movement can provide new insights into sales volume and reveal new ways to increase it. In most companies, salespeople talk about 'sales volume' constantly, and companies often use it as a yardstick for 'marketing heroes.' However, the sales volume everyone talks about daily is actually 'gross sales volume,' a numerical symbol that does not represent the true market situation.

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The physical manifestation of sales volume is the transfer of products. Tracking product movement can not only provide new insights into sales volume but also reveal new ways to increase it.

In most companies, salespeople talk about "sales volume" constantly, and companies often use "sales volume" as a yardstick for "marketing heroes." However, the sales volume everyone talks about daily is actually "gross sales volume," a numerical symbol that does not represent the true market situation.

From the above new concepts about sales volume, we can derive a series of important sales volume formulas:

1. Gross sales volume = Stored sales volume + Net sales volume
2. Net sales volume = Gross sales volume - Stored sales volume
3. Stored sales volume = Gross sales volume - Net sales volume
4. Stored sales volume = Gross sales volume (when net sales volume is "zero")
5. Stored sales volume (when not timely converted to net sales volume) = Stagnant sales volume
6. Stagnant sales volume = Bargain sales volume + Negative sales volume + Dead sales volume

From these six sales volume formulas, the following conclusions can be drawn:

1. Gross sales volume is the sum of stored sales volume and net sales volume.
Therefore, increasing either stored sales volume or net sales volume can increase gross sales volume. However, when stored sales volume cannot be timely converted into net sales volume, it becomes stagnant sales volume, leading to market crisis. Therefore, the effective way to increase gross sales volume is to moderately increase stored sales volume and vigorously increase net sales volume.

2. Net sales volume is the difference between gross sales volume and stored sales volume.
Since gross sales volume increases along with stored sales volume, increasing gross sales volume while reducing stored sales volume can increase net sales volume. To increase net sales volume, it is necessary to accelerate the conversion of stored sales volume.

3. Stored sales volume is the difference between gross sales volume and net sales volume.
When gross sales volume is constant, the larger the net sales volume, the smaller the stored sales volume, until a market "thirst" state occurs; conversely, if net sales volume is small, stored sales volume will be larger, potentially leading to a market "stagnation" state (except when new products are still being distributed to terminals or new markets are still being stocked).

4. Beware of stagnant sales volume becoming dead sales volume.
Stagnant sales volume is a sniper affecting market survival. When stagnant sales volume appears, companies and distributors should quickly dispose of it at appropriate locations in a "cheap" way (with various specific operations) or return it to the company, and resolutely prevent it from evolving into dead sales volume. Unless the company intends to abandon the market and does not consider the reputation of the company and brand, it can ignore stagnant sales volume.

**Methods to Convert "Stored Sales Volume" into "Net Sales Volume"**

From the above analysis, it can be found that the path to expanding "gross sales volume" is: converting "stored sales volume" and increasing "net sales volume." Among these, conversion is the key, and increase is the goal.

Sales personnel mostly expect the company to provide large amounts of trade promotion expenses every month. Trade promotions will increase stored sales volume, but although the expansion of stored sales volume can promote the increase of net sales volume, it does not mean that net sales volume will necessarily increase.

It is worth being vigilant: when trade promotions increase stored sales volume, if stored sales volume cannot be timely converted into net sales volume, it may become stagnant sales volume, becoming "unsafe stored sales volume." Therefore, an important prerequisite for companies to conduct trade promotions is to study the maximum "safe stored sales volume" in the market. To conduct trade promotions, the stored sales volume in the channel should first be controlled within this "safe stored sales volume" range.

Only when stored sales volume is converted into net sales volume does sales volume that is meaningful to the company truly occur. The question that marketing personnel must consider is: how to convert stored sales volume and increase net sales volume?

1. Conduct dynamic management oriented towards increasing net sales volume.
Manage the gross sales volume, stored sales volume, and net sales volume of the company and each market in a comprehensive, systematic, and dynamic manner. With the orientation of increasing net sales volume and the key of converting stored sales volume, formulate corresponding marketing strategies and work plans.

2. Improve product competitiveness.
All net sales volume comes from products that are recognized and purchased by consumers. To increase net sales volume, it is necessary to improve product competitiveness. Continuously improving the product's alignment with the needs of target consumer groups and enhancing the product's competitiveness against similar competing products are both the main ways to increase net sales volume and the basic guarantee for its increase.

3. Link net sales volume with personnel incentives.
Use the achievement rate of net sales volume targets as the most important indicator for work evaluation, and link this indicator with the assessment and incentives of sales personnel.

4. Brand promotion.
Appropriate advertising and promotion can quickly enhance consumers' awareness of the brand, drive consumers to try or continue purchasing products, and convert stored sales volume into net sales volume.

5. Expand terminal coverage and increase terminal stored sales volume.
Although terminal stored sales volume has not yet been converted into net sales volume, it provides opportunities for conversion. If products cannot even be placed on terminal shelves, the stored sales volume at distributors or sub-distributors may become stagnant sales volume.

6. Terminal promotions, terminal merchandising, and terminal visualization.
Terminal promotions and terminal visualization can effectively attract consumer spending, while terminal merchandising is the best advertisement and spokesperson for products when facing consumers. Strengthening terminal promotions, merchandising, and visualization is the most direct way to convert stored sales volume and increase net sales volume.

1. What is "Gross Sales Volume"?
For many years, everyone has referred to company shipments as sales volume. In fact, company shipments can only be called "gross sales volume." Because "company shipments" may not all be consumed by consumers, and the "shipments" that are not truly consumed may be returned to the company warehouse or "rot" in the market.

More importantly, if sales personnel aim for high "gross sales volume" and companies use "gross sales volume" as a performance evaluation indicator, it may lead marketing strategy formulation into misunderstandings and cause a passive market situation.

Case: In a certain month, an FMCG company set a monthly sales target of 50 million yuan (while based on its corporate and market conditions, it could only generate about 40 million yuan in sales that month). The company's marketing decision-makers required that the sales target be completed no matter what. With strong trade promotions and sales personnel incentives, the company completed sales of 53 million yuan that month. However, the following month, the company's sales were only 30 million yuan, and the third month sales were 33 million yuan, with strong demands for returns and exchanges already rising in the market.

"Shipments" that only complete the "warehouse transfer" of company goods and are not ultimately consumed by consumers may become the company's "heartache" and even bring "catastrophe" to the company.

2. What is "Net Sales Volume"?
"Net sales volume" is a concept corresponding to "gross sales volume." "Net sales volume" refers to "terminal shipments," which are "company shipments" consumed by consumers. "Net sales volume" is the true and real sales volume of the market. Only when companies and sales personnel aim to achieve "net sales volume" and use the completion of "net sales volume" as an evaluation indicator will it be conducive to adopting correct strategies and actions.

3. What is "Stored Sales Volume"?
Usually, there is a difference between gross sales volume and net sales volume, and this difference is the "channel inventory," which includes the inventory of distributors, the inventory of sub-distributors at all levels, and the inventory of all terminals. We collectively refer to these as "stored sales volume."

4. What is "Stagnant Sales Volume"?
When "stored sales volume" cannot be timely converted into "net sales volume," "stored sales volume" becomes "stagnant sales volume," at which point "the channel is no longer smooth." "Stagnant sales volume" will eventually become three types of sales volume: "bargain sales volume," "negative sales volume," and "dead sales volume."

5. "Bargain sales volume" is the sales volume after disposing of stagnant products at low prices.
6. "Negative sales volume" is the quantity of goods returned to the company by the channel for stagnant products.
7. "Dead sales volume" is the quantity of stagnant products that have neither been sold at a bargain nor returned to the manufacturer, but have deteriorated in the channel and can no longer be sold.

A market with "stagnant sales volume" is a crisis market. If this crisis is not handled in a timely manner, the market may "die" before or after "stagnant sales volume" evolves into "dead sales volume."

Thus, we can answer the question: Why do companies lose or die in the market? It is because companies fail to or cannot convert "stored sales volume" into "net sales volume," and subsequently fail to effectively handle the "stagnant sales volume" problem, leading to a market crisis. At this point, the larger the "dead sales volume," the more thoroughly the market "dies."

**Six Sales Volume Formulas and Reasoning**

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