The holiday season is a pressing time not only for families but also for small businesses who are trying to figure out a fool-proof way to brave the rush of shoppers in one month to the anticlimactic downturn in the next. It does not, however, have to be doom and gloom.
In this article, we consider some strategies small businesses can implement to strengthen their ability to weather the storm of inventory management during the holidays.
Know what you need
A great way to prepare for the holiday season is to use demand forecasting to ascertain how much inventory you anticipate selling over the period, and therefore how much you must order in. The holiday season can be a great time for sales however it can be stressful with delayed shipping times and suppliers themselves ending up short. Therefore, take the guesswork and stress out of it by simply forecasting demand ahead of time.
Get your orders in early
Suppliers are under pressure in the lead up to the holiday seasons too. As a result, they may be unable to fulfil late orders, placing even more pressure on small businesses. Therefore, plan ahead both logistically and financially to ensure timely orders can be placed to guarantee supply throughout the busy holiday season.
When you are a small business still using a more analogue or manual inventory management system, it is very easy to miss trends that start emerging because you are not aware of the big picture. This is why it is so important to arm yourself appropriately with dedicated inventory management software that can alert you to any products that are selling faster than anticipated. They can also be set up to have automatic re-order points to further save you time and angst when your attention will most likely be consumed with your customers, staff and ensuring your business is appealing and festive.
Unfortunately, returns are an inevitable part of the retail business, especially around the holiday season. To cope with this both logistically and financially, it is important to have a standardised process for returns and a plan for what you will do with them. Failing to do so will result in returns accumulating in number and sitting, forgotten about in the corner, using precious storage space. In some cases, you may be able to return to the supplier but in most instances, it could be beneficial to organise flash sales shortly after the holiday season which will help deal with the problem as well as to recuperate some cash. You never know, one person’s discard may be exactly what somebody else needs.
Another benefit of having a returns policy in places appeals directly to your customer’s final purchasing decision. Studies have shown that people are far more likely to make a purchase when the perceived risk is lessened through a robust and easy returns process.
Think about your merchandising
Another benefit of having an automated system to track sales data is that it gives you an idea of what products are not doing so well. It is important then to think about how they have been marketed and their merchandising as these areas may well hold the key. The fix could be as simple as changing up the product’s location on the shop floor or placing them next to some better-selling inventory to instigate interest.
Train, appreciate and delegate
The final point to make regarding preparing your small business for a successful holiday season is to train your staff thoroughly including in inventory management prior to the festive onslaught. In doing so, they will feel empowered and equipped to do their jobs efficiently and accurately. This level of excellence should be appreciated and rewarded to fuel further good and reliable work. And because your staff will be so reliable, the final step is to delegate and allow them the freedom to do what they were trained to do. Small business owners struggle to let go of command, especially when it counts most, however, they cannot do everything themselves and if staff have been trained appropriately, then letting go should not compromise business in the slightest.
Topics: inventory management, inventory management software, SME