Unit Sales - Definition & Meaning
What is Unit Sales?
Unit Sales is defined as the total sales in value divided by total sales in quantity, i.e. earning per product.
Unit Sales= (Total Sales (in value))/(Total Sales (in quantity))
Unit Sales may also simply be expressed as Total Sales in Quantity, i.e. total number of units sold.
This is a measure of the company’s sales and is helpful in marketing & sales analysis. This gives an idea of the average price of a product for time periods, which may help in determining various market forces or the marketing strategies that may have worked for that kind of product. It also lets one estimate the margin in cost and selling price per product. So it can be used to modify, for example, the R&D or manufacturing spending, to increase the effectiveness of the same, and hence improve the profit margin. Hence, used in various forms of analysis, it can also help predict the variables (like required production, return on cost, optimum price) for a future product, or may just help improve the price of a present product. In a nutshell, it’s a tool that can be used to maximize product sales.
This measure is used mostly in case of physical products and not with services.
For example, we may say that the iPad Air had $200 unit sales, or 10,000 unit sales, where actually the sales in value is of $2 million and in quantity is 10,000 units. Hence unit sales of $200.
Unit Sales = Total Sales Value/Total Sales Quantity = 2,000,000/10,000 = $200
Hence, this concludes the definition of Unit Sales along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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