Top 12 Disadvantages and Limitations of Sales Forecasting (Explained)

Sales forecasting is a difficult and challenging task. There are some guidelines for the managers that can enhance the accuracy of sales forecast. It is influenced by marketing plans ad objectives.

disadvantages and limitations of sales forecasting
disadvantages and limitations of sales forecasting

Disadvantages and Limitations of Sales Forecasting

There are a number of disadvantages and limitations of sales forecasting. These are discussed below:

1. Lake of Sales History

As there is no past sales history, one has only to guess the future.

This limits the accuracy of the forecast.

2. Change in Business Environment

Introduction of new factors in the business environment such as changes in income, prices, employment, demand, supply, consumption, etc. may disturb the forecasts.

Related: 11 Key Factors Affecting Sales Forecasting (With Examples).

3. Change in Consumer Behaviour

Change in consumer tastes, needs, preferences, habits, conceptions patterns, buying habits, attitudes also limits the accuracy of forecasts.

4. Lake of Facts and Data

In the absence of proper statistical information and authorized data, forecasting does not produce good results.

5. Based on Assumptions

The sales forecasting is usually made on the basis of certain assumptions.

It is based upon past sales records, demand conditions, company policies, available data, and external environment.

But these assumptions cannot always be proved as correct.

Related: 21 Key Benefits and Importance of Sales Forecasting (Explained).

6. Availability of Substitute Products

Sales are influenced by the availability of substitutes.

difficulties of sales forecasting
difficulties of sales forecasting

Due to plenty of substitute products, it becomes difficult to forecast accurate Sales figures.

7. Uncertain Growth Rate

It is very difficult to main a rapid rate of growth over an extended period of time.

The business environment has been experiencing recessionary trends in demands during the last decade.

With the result, per capita income, growth of industries, future demand, capital investment, etc. have declined.

In this uncertain and turbulent environment, a correct sales forecasting has become difficult.

Bonus: 11 Main Types of Sales Compensation Plans (With Examples).

8. Higher Cost

Due to higher costs and time constraints, statistical and scientific techniques are not used by small firms.

9. Changing Demand

The frequently changing consumer demand, fashion, tastes, types of customers, consuming publics, have made sales forecasting difficult and challenging.

10. Influence of Psychological Factors

Many psychological factors, such as consumer buying motives, buying perception, exposure, attitudes, values, lifestyles, inclination and other mental processes that affect sales cannot be accurately predicted or assessed.

In such a situation, forecasts cannot generate reliable and accurate results.

Related: 25 Major Benefits or Advantages of Branding (Explained).

11. Mathematical Complexity

May statistical techniques of forecasting are complex to understand and use, whereas simple calculations cannot produce accurate results.

12. Lack of Trained Forecasters

Many companies do not have efficient, trained experienced forecasters.

Native forecasts are simple opinions, ideas, and views that cannot generate good results.


No method of sales forecasting is Perfect. An executive must choose the technique or combination of techniques, that is likely to produce the most accurate estimates of sales given the firm’s particular circumstances.

Companies should consider using more than one forecasting method when the marketing environment is volatile.

Thus, now you know the disadvantages and limitations of sales forecasting.


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