Using the Sales Channel Feature for Forecasting Kiosk Sales

Q: I'm trying to forecast sales via in-store kiosks in my pro forma, but not quite sure how to do that. Should I be setting up the kiosk as a sales channel? If so, how do I use that to forecast the sales and revenue for one of my offerings?

A: Yes, we recommend leveraging our Sales Channels feature to make that really easy to model out and easy for others, such as investors, to diligence as they review your plan. How quickly you can get kiosks in place in the market and your assumptions for your ramping sell-through rates per kiosks are going to be key considerations for how you scale. We will give you a fictitious example to make it easier to follow:

1. First, make sure you have Sale Channels turned on in your General Setup settings:

Kiosks as a Channel - 1.png

2. Second, enter the number of kiosks you plan on placing in stores over the life of your plan. In this case, we've assumed that you're planning for a January 2018 business launch and having your first kiosk in service by March and then adding 3 kiosks per month for the rest of your plan (you can use Auto-Fill to quickly enter your kiosk placement and ramp-up assumptions or you can enter your forecast for each month using the Month-by-Month input). This gives you an easy way to see and keep track of the number of kiosks you are planning and when (a key assumption that investors will want to see and know).

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3. Next, estimate your sell-through rates of the # of sales or customers per kiosk per month. Again, you have two different methods of entering the sell-through rates from the 1st month of a kiosk install to the later months. Typically, the longer a kiosk (or any channel) is in place, the more your sell-through rates will increase over time. This is a key benefit of using the Reseller functionality to plan your kiosk placements - it clarifies the # of kiosks AND the increasing sell-through rates. In this example, we show 10 customers per month and growing at a rate of 1 per month (we are using a smaller number to more easily see the impact of the app's features).

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4. The Reseller functionality then calculates your total unit sales for you for each month based upon the two inputs above. This is a calculation of the growing number of kiosks being placed and the growing sell-through rates for each passing month that a kiosk is in place from its original placement date.

Kiosks as a Channel - 4.png

5. Now, when you add an offering (called XYZ here), you will enter all assumptions inputs...

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6. ...including pricing, acquisition costs, offering costs, etc. (we are only showing pricing here for simplicity)...

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7. ...and when you get to the sales forecast methodology, you will select Sales Channels, which will then automatically bring in your Sales Channels unit sales from your earlier inputs in 1 - 4 above:

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8. Once you calculate your pro forma, you can see the results on all reports. We are highlighting here just two:

a. Key Metrics: This report shows a host of key metrics for your plan, including your sales channels. We are showing the Monthly view and you (and your investors performing due diligence) can quickly see the ramp up of your kiosks and sales or customers per kiosk (on average as your # of kiosks over different time periods all have an impact on that) and your total # of customers for each period.

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b. Sales Detail: This sales report starts out with the sales calculations, revenue, cost, and gross margin for each time period. We are showing the monthly view to clearly show the ramp up of unit sales and our price assumption of $5.99 each. (For simplicity, we didn't add any expenses of any type for the offering):

Kiosks as a Channel - 9.png

Given the use of the reseller functionality for your kiosks will provide more clarity on the impact of your assumptions and makes it easier to jump in to tweak any of the inputs independently to see the impact. For example, change the sell-through rates to 250/month/kiosk and ramping at 10 more per month and your Sales Calculations now look like this:

Kiosks as a Channel - 10.png

Our app makes these kinds of scenario changes very, very easy and transparent to all and makes it easier to keep track of changes.