Projections show that the global international eCommerce market will reach a size of $1.91 trillion by 2030.


For many businesses, planning for the future is essential. If your business can successfully forecast demand, you can plan things out to maximize efficiency, and therefore profits. Demand forecasting is used throughout eCommerce as it provides a range of benefits and helps keep business operations reliable.


To find out more about what demand forecasting is, and its importance within eCommerce, keep reading.

What Is Demand Forecasting?

There are three main types of demand forecasting that a business can make use of. The best type to use generally depends on the data available.

Qualitative Forecasting

Qualitative forecasting is usually the best way to produce a demand forecast when there isn’t much data. This could be for a new product/service, for example.


Rather than using sale data, you’ll use things like market research, expert opinions, and comparative assessment. This is common in the tech industry as products can often be quite unique, which makes it harder to predict demand.

Time Series Analysis

When there’s a good amount of data available this is often the best method. You can look at past data to find patterns and use the time series analysis technique. This shows things like seasonal demand variations, noteworthy sales trends, and cyclical patterns.


This type of analysis is best when there’s a lot of data which is more common in well-established companies. It’s ideal to have at least a few years of data so that patterns can be more clearly seen.

Casual Models

Casual models are the most complex and advanced method of demand forecasting, and as such, it often provides the best results. It uses detailed information to make connections between variables that can affect market demand. This includes things like economic pressures, competing companies, and other socioeconomic elements.


Time series analysis is an essential part of this. An eCommerce business can look at past sales along with things like promotional activities, marketing budgets, and competitors.

Benefits of Demand Forecasting

Following the best demand forecasting practices can benefit almost any business. You’ll be able to make better decisions for your company if you have a good idea of future demand.

Budget Preparation

By accurately forecasting demand, you can get a better idea of future costs. This will help you be more efficient with eCommerce fulfillment and allows you to make more informed decisions about things like:

  • Resource allocation
  • Cash flow
  • Profit margins
  • Expansion opportunities
  • Operating costs
  • Inventory accounting
  • Staffing

Being able to get good estimates for all of this ahead of time will allow your business to make the most out of the funds available.

Planning and Scheduling Production

Not only will you be able to forecast what customers want, but you’ll also be able to gauge when they want it. As such, you’ll be able to plan out production to ensure you have suitable stock levels to meet the demand, but you also shouldn’t have issues from overordering.


You can also plan out your marketing strategies to match up with customer demand. All of this will help streamline supply chain operations to keep things running smoothly.

Storing Inventory

Having too much inventory can cause different problems. One of the most common is in terms of storage. If you wind up with too much stock, you might not have reasonable space to store it, causing logistical issues.


Depending on what your products are, there might also be shelf-life concerns. If you have too many units of a product, some may sit in storage for a long time and could degrade in quality.


Demand forecasting will allow you to estimate how much stock you should need during a certain period. You can then monitor inventory levels so that you can restock ahead of time if demand is exceeding your forecast.


Factors Influencing the Customer Demand Life Cycle

Several factors can influence customer demand. Depending on the type of industry, seasonality may play a part. For a clothing business, for example, the seasons have a large effect on the types of clothes people are buying.


Competition is also a big part – having a lot of competitors gives customers more choices. Sometimes the level of competition can increase unexpectedly, so having an agile demand forecasting model will make it easier to adjust and respond in good time.


The types of goods you sell can come into play at various stages. perishable goods, for example, don’t have the longest shelf life, so you don’t want to be keeping excessive volumes stocked.


Geography is also sometimes a factor. For an eCommerce business, your audience may only be in a certain area, and you might also get your goods from a specific location. Keeping transport distances to a minimum is ideal when possible as it will make things logistically easier and you can get products to customers faster.

Demand Forecasting Solutions

If you have an eCommerce business you should be using demand forecasting. Planning for the future based on predicted demand can provide a range of benefits and will give your company an edge over the competition.


ACI Logistix provides logistics and distribution solutions for small businesses. To find out more about our services and how they can help your company click here to contact us today.


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