Accurate forecasting is a key factor contributing to the success of any business. By making accurate predictions about future sales trends, businesses can ensure stock levels align accurately with supply and demand fluctuations to ensure optimum efficiency.
However, forecasting accurately can be a difficult task, especially in the build-up to peak season. In this article, we outline some key tips businesses can use to ensure their forecasts are accurate in the build-up to peak season.
Tip 1: Download inventory software
Many small businesses new to the market may find it difficult to accurately predict demand across peak seasons without reliable inventory software. However, as a business grows – along with its inventory – this task can become increasingly complicated and error-prone.
By downloading inventory software, you will be able to automate the stock management process, and easily store information about each item in the database. In addition, by downloading inventory software any sales made will be filtered through your system and will accumulate throughout the year. Then, you will be able to analyse sales trends from previous seasons in order to prepare for the next.
Tip 2: Research
While inventory software is a great way to predict previous sales trends, you may also need to carry out some market research to identify upcoming popular products. Predicting the popularity of products which are new to the market can be difficult, but it is not impossible.
The best method for predicting the popularity of new items is to ensure you are using a good quality forecasting engine which can identify useful product data. A forecasting engine will allow you to hone in on product characteristics which may suggest why a particular product is likely to be next season’s top-seller. In so doing, you can ensure you top up your inventory in order to meet the demand.
Tip 3: Check out the competition
A third tip to ensure your sales forecasts are accurate is to keep an eye on your competitors within the industry. Check out what trends they have identified so far, and make sure you are keeping up. By doing so, you can ensure you are well-stocked with popular products which are likely to be highly popular when the busy season swings around.
Tip 4: Consider other factors
While two products may have the same expected demand in the peak season, there are often other factors that business owners should weigh up before preparing inventory orders. For example, if one of the products is expected to be long-lived, while the other is perishable, their demand levels may be equal, but their respective risks are not.
In these situations, it is important to analyse the details of each item in respect to their value and their associated risks. By doing so you can gain more insight into your inventory needs for the busy season and avoid overstocking items which may have a short shelf life or may only be in high demand for very short periods of time.