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Managing an inventory that comes with seasonal demand is a difficult hurdle to jump over when your experience is limited.
Seasonal products such as back to school stationery and Christmas necessities have a shorter time frame to turn such inventory into cash. It’s a risky game, either you end up massively marking your prices down if you have overstock, or worse, you could run out of stock and cause frustration for both you and your customers – driving them to visit your competitors instead.
UK retailers endured the worst Christmas since 2008 last year. (*) So, as a retailer, whether in ecommerce or brick and mortar, how can you ensure your sales don’t suffer?
It would be simple and easy to say all you have to do is plan. But, there are plenty of ways to better manage your seasonal inventory:
Data is essential. You can take a look at what worked and what didn’t during the last seasonal period, and this can help you discover the timely factor of seasonal products. What performed better? Which didn’t sell as well as you expected? Buy more or less of each. Having accurate data will also allow you to discover how long each seasonal period roughly lasts – so you can organise your business around the mania.
If this sort of data isn’t available, 1, you know for next time and 2., you can check your supplier history to take note of when you have purchased specific products and the quantity.
Reducing product prices is unavoidable when it comes to seasonal inventory. However, ensuring you are careful and considerate about which route you go down first is critical. You have to plan them to maximise profit cautiously.
The way you market discounts is essential here. January sales used to generate a massive buzz for customers, but now, with Black Friday in play, the sales period has been moved forward.
That said, who doesn’t love a bargain? The right clearance scheme could encourage significant traffic to your site that not only gives a strong brand presence but possibly carries you over into the next sales period also. No one could forget a great steal for half the price.
You might have the products, but do you have the personnel? It’s one thing ensuring you have enough to sell, but without the facilities in place to deliver said sales, it will soon become stressful. Make employees aware that booking a holiday around seasonal periods is not ideal, and make sure to keep track of who has booked annual leave, so you prevent the struggle of lack of staff when things get busy.
The process of re-stocking, organisation and pick and pack is one that needs a strong team – especially when business is busier than usual. Sales can suffer massively if you do not have the personnel or resources in place.
What happens when the seasonal period is over? How much is it going to cost you to hold old annual inventory? Inventory expenses are a huge consideration before, during and after seasonal periods.
What will you do with the seasonal items that don’t sell? Will you get rid or hold on to sell again during the next season? Think about all of the considerable inventory costs and cuts before you make a hasty decision. Having the right inventory management system in place, or outsourcing your warehouse needs to the likes of Bray, will help take any of the difficulties out of your hands.
Some products will stay in demand consistently throughout the year, so it makes sense to keep a healthy amount of stock into balance out year-long sales. However, if there are certain products that you know will see your sales rise simply in seasonal periods, for example, items such as Christmas decorations or swimwear, both winter and summer will see very different results for each.
Managing inventory properly will take some time to get right, but once you’ve implemented the right processes, even in seasonal periods, your business will remain on the right track.
Seasonal periods will affect both eCommerce and brick-and-mortar businesses. Bray Solutions can take the hassle out of these busier periods, so you can concentrate on generating profit. Get in touch today.
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