Sales forecasting is the practice of estimating future sales volumes over a defined time horizon, typically weekly, monthly, quarterly, or annually. It draws on historical sales data, market trends, seasonality, promotional plans, and channel intelligence to project how much of a product a business will sell.
Sales forecasting estimates how much will be sold. Demand planning takes that forecast and determines what needs to be ordered or produced to meet it. Sales forecasting is an input; demand planning is the operational response.
Best practice for most product businesses is a rolling monthly forecast with weekly reviews for high-velocity or high-risk SKUs. Brands launching new products or entering new channels may need more frequent updates until velocity patterns stabilize.
Over-relying on the prior year without accounting for structural changes: new distribution, channel mix shifts, competitor moves, or changes in promotion spend. Historical data is a starting point, not a ceiling.
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