What Are Sales? Sales Volume vs Revenue

What are sales? Businesses usually use this figure to reflect their finances at a given point in time. But many people still do not clearly understand what sales are, and confuse the concepts of revenue and sales. If you still have questions about this, Mona Media will explain it in detail in this article!

The concepts of sales and revenue

What are sales?

What are sales? Sales are the number of products a business has sold in a period, which can be a month, a quarter or a whole year. Sales represent the total value of money received from sales transactions in that period.

Sales include both profit already collected and profit not yet collected. They can include revenue from selling goods and other income. However, sales do not depend entirely on revenue; they depend on the number of products sold and their value.

Increasing sales is not just about selling more; it also takes a sound operating strategy to optimize business performance. One of a business's biggest challenges is delaying the rollout of plans, which wastes resources and growth opportunities. Read on for strategies that help a business grow sales effectively:

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What is revenue?

Doanh thu, is the total economic value a business earns from its operations over a specific period, after excluding taxes. Revenue contributes to the growth of the business's owners' equity.

Examples of sales and revenue

To understand more about what sales are, here is an example from Mona:

Mona's target of 700 million VND in December 2025 can be seen as a revenue target

If the target is revenue, the total money received from sales between 1/1/2025 and 30/12/2025 counts toward that month's revenue. This revenue includes money collected in the current month and money collected from earlier purchases that customers had not yet paid for.

However, if the target is sales, you must sell goods worth a total of 700 million VND between 1/12/2025 and 30/12/2025. In this case, the calculation is based only on the quantity of goods sold, excluding agent costs, investment costs and other factors. Whether the target is revenue or sales depends on how the business owner defines and measures the business's performance.

How to calculate revenue and sales

So what is the formula for sales? To calculate a business's sales, apply the formula below:

• Sales = Unit selling price of a product * quantity sold at any given time

For revenue, use the following formula:

• Revenue = Total sales – Costs

Here, costs include discount fees + shipping for returned goods (due to defects) + volume discounts (for bulk purchases)

So how do sales affect a business

Why do sales directly affect a business? Actual sales are one of the key factors in a business's development. They also show how effective the business's current plan is. Sales are not only an important figure but also a goal that staff work toward. When sales rise, they create a stable, strong financial resource for the business.

At the same time, sales let a business or company identify its strengths and weaknesses. By analyzing sales, businesses can build on their strengths and find ways to fix their weaknesses.

Some differences between sales and revenue

So what is the difference between revenue and sales? Let's find out!

How each is determined:

• For sales: Net income from business and trading, before deducting costs
• For revenue: The total of economic benefits recognized in the accounting period. Take sales and subtract all costs, and you get the final profit

Role of sales and revenue for a business:

• For sales: It shows and proves the business strategies that have achieved results over a given period
• For revenue: This factor is seen as a measure of how much profit a business earns. It can also assess internal factors such as staff work performance and management effectiveness.

Position in the business's financial statements:

• For sales: Shown on the first line
• For revenue: Shown on the last line

Effects of not telling revenue and sales apart

Here are some problems that can arise if you confuse the concepts of revenue and sales:

• Risk of misjudging profit: If a company focuses only on high sales without calculating related costs, it can misjudge its real profit. The company may believe the business is more profitable than it is, which leads to unreliable operating plans
• Underestimating the role of revenue accounting: Revenue accounting is an important part of recording and reporting financial information. Confusing revenue and sales can reduce attention to accounting procedures and accurate revenue recognition, causing errors in financial reports
• Unable to calculate cash flow: Revenue and sales are important business metrics, but they give no detail on cash flow (the movement of money into and out of the business). To ensure a company's liquidity and ability to pay, factors related to cash flow need to be evaluated carefully
• Forgetting the concept of liquidity: Focusing only on revenue or sales can make a company lose sight of its liquidity. Liquidity is important to ensure the ability to meet financial obligations and keep the business running sustainably

Ways to help a business increase sales

Now that you understand what sales are, in the last part Mona will walk you through 4 ways to help increase a business's sales

Use discount or price-reduction strategies

How does using a discount strategy increase sales? Discounting is an important strategy in Marketing to increase consumers' buying power. By lowering a product's original price by a set percentage, a business creates a strong incentive for customers to decide to buy. It gives customers short-term benefits, such as saving money and a chance to buy at an attractive price. It also benefits the business, such as higher sales, competitive room and stronger customer relationships.

That said, discounts need careful management to avoid negative effects, such as weakening the brand's value or training customers to expect low prices all the time. So choosing the right scope and discount rate, and being clear about your goals and long-term benefits, is essential for the strategy to work.

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Run a few mini-games

How do you raise sales? By running contests, games or giveaways, a brand creates excitement and fun for its customers. Valuable, attractive prizes such as gifts, free products or unique experiences usually draw customers in and get them taking part. This approach has several benefits:

• It builds interaction and connection between customers and the brand. Customers see that the business cares about them and values them, which lays the foundation for a long-term relationship.
• Contests and giveaways raise brand awareness and spread your message. Participants share the event with friends, family and on social media, creating a viral effect and reaching a new audience.
• Contests, games and giveaways can also grow sales effectively. By encouraging customers to buy in order to enter or qualify for a prize, a brand can lift consumption and increase sales in a short time.

That said, for the best results, a contest or giveaway has to be planned and run carefully and professionally. You need clear goals, a clear target audience, a clear way to take part and clear rules, so the process is transparent and fair to every participant.

Offer some free services for customers to try

How can you offer a free service and still increase sales? Letting customers try a product or service free for a short period is an effective way to drive sales. It gives customers a chance to experience the product first-hand, which builds trust and creates positive interaction on both sides.

Once customers have used the product for free, they may form a good impression and see its real value. This gives the brand a chance to present more attractive features and upgraded plans that customers can buy when the free trial ends.

However, for this to work well, the free service and the paid plans that follow need to be designed carefully. The brand must make sure the free service has real value and gives customers a good experience. Introducing new features and plans also needs to be clear and appealing, so it holds customers' interest.

Increase the scarcity of your goods

What is a marketing strategy for increasing sales? Creating scarcity is a marketing strategy common way to drive sales. When a business announces a limited promotion for the first group of customers, it creates curiosity and desire among the crowd.

Limiting the number of customers this way creates scarcity, which makes buyers want to act quickly and not miss out. Consumers tend to feel pressure and worry about missing attractive deals or limited-edition products. This can push them to hurry to the store or Website of the business to buy and enjoy the offer.

At the same time, when using scarcity tactics, businesses must be transparent and honest. Information about the quantity and duration of a limited promotion should be stated clearly and without causing confusion. The offer and the product must also be genuinely worth it, so customers are not disappointed.

Through this article, Mona Media has shared very useful information on the topic of what are sales. We hope you've picked up some new knowledge you can apply in everyday life.

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