What is Sales Volume?

Sales volume is the number of units sold within a reporting period. This figure is monitored by investors to see if a business is expanding or contracting. Within a business, sales volume may be monitored at the level of the product, product line, customer, subsidiary, or sales region for the following reasons:

To track sales performance by the sales department
To adjust the investments targeted at specific products, product lines, customers, or sales regions
To adjust marketing activities to generate more sales volume
To spot changes in sales trends that might trigger changes in the amount of finished goods inventory kept on hand

A business may also monitor its break even sales volume, which is the number of units it must sell in order to earn a profit of zero. The concept is useful when sales are contracting, so that management can determine when it should implement cost reductions. This can be a difficult concept to employ when there are many different products, and especially when each product has a different contribution margin.

The sales volume concept can also be applied to services. For example, the sales volume of a consulting firm may be considered the total number of hours billed in a month.