Tesla has little to no impact on eBay’s success, but as a fellow ecommerce site, Amazon does. When you factor in that Amazon reported a 44 percent sales growth rate, eBay actually came out incredibly strong. That might look disappointing for eBay, but those companies aren’t competing in the same market. Your company doesn’t need to have a higher sales growth rate than every other company-you just need to have a higher one than your direct competition.įor instance, if we look at the first fiscal quarter of 2021, Tesla reported a remarkable sales growth rate of 74 percent, while eBay reported one of 45 percent. Even though the larger company increased sales by $1 million and the smaller company increased sales by only $200,000, the smaller business experienced higher growth. Meanwhile, a smaller company going from $300,000 to $500,000 sees a 66-percent growth rate. This is partly because larger organizations plateau and then focus on acquisitions, but it’s also because smaller businesses are more impacted by growth of any kind.įor example, a larger company jumping from $20 million to $21 million in sales sees a five-percent sales growth rate. Let’s break down a few of the main factors:Ĭontrary to popular belief, smaller companies can actually experience faster sales growth than larger companies. Depending on your KPIs, your size, and the growth of your competition, “good” sales growth can mean very different things. “Good” sales growth isn’t the same for every company. Sales growth rate isn’t just another sales analytic-it’s a key metric for evaluating the health of your growing business. It’s vital to understand how to calculate your sales growth, how to improve it, and what makes it impressive or average. This rate is not only used by your company to look at internal successes and problems, it’s also analyzed by investors to see if you’re a company on the rise or a company starting to stagnate. Sales growth rate measures your company’s ability to generate revenue through sales over a fixed period of time.
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