With the holiday season representing as much as 20 to 40 percent of annual sales for some retailers, it is vital to minimise the risks of having not enough or having too much inventory stock during the holidays. When items are quickly going in and out of stock and returns are being made in larger volumes than usual, small businesses that do not use an automated way to keep up with their inventory management stand to lose a large percentage of their annual revenue.
To help ensure your business does not miss out on this large flow of income and to enjoy a relatively stress-free holiday season, follow this useful holiday inventory management guide for small businesses.
Prepare before the holiday season begins
Reduce the workload by getting automated
The first step is to build a solid inventory management foundation to support your business. The sheer volume of stock that moves around during the holidays takes extra time to track, and you may have even less time to manage your stock because you’ll be extra busy selling. Try the simple solution of reducing the amount of time you’ll need to spend tracking inventory stock with a simple solution: download inventory software prior to the holiday rush.
Calculate how much stock you need
Demand forecasting is a critical step in getting your inventory ready for the holiday season. You should look at your historic sales data and any current trends carefully to predict what will sell during the busy season. Pay close attention to inventory stock behaviour during holidays of the previous years. Identify similarities between your present economic situation and business environment with periods in the past, as this will help to predict the amount of stock needed.
Place your orders early
Once you’ve forecasted the quantity of stock needed, it is recommended that you order it as early as possible ahead of the holiday season rush. Not only will this help you get your ducks all lined up in a row, but also new statistics show that people are beginning to shop earlier for the holiday season – such as October!
During the holiday season
Set up an inventory stock replenishment plan
If you’re manually tracking inventory items with a spreadsheet or paper method, your business is missing out on some very time and money saving features. Prevent items from going out of stock by using barcode scanners in your point of sale system and integrating them with inventory management software. Download inventory software to create and monitor alerts when an item is getting low, then you can reorder before it runs out – easily help prevent lost sales which older forms of tracking inventory stock miss.
Process accurate returns
The reality is people who receive gifts want to return an item and often without a receipt. It is really imperative to have a convenient small business returns policy. However, in light of your returns policy, to cater returns accurately try applying “required for return” barcode stickers on gift items. Then, a gift recipient only needs to keep that barcode sticker on the item, and the gift giver won’t need to worry about keeping track of a gift receipt. By making returns easy, pleasant and quick, you can create positive experiences with customers that build trust and encourage them to shop with you again.
After the holiday season
Sell your overstocked items now!
To avoid accumulating obsolete stock you need to act quickly. A real risk is holding on to items thinking you may still get a premium price for it.
- Change up the merchandising by moving it to a more prominent location, add new visuals and group it with fast-moving items
- Try discounting by moderately re-pricing items. If these items still do not sell, try moving onto more aggressive markdowns
- Try hosting or participating in pop-ups and special events
- Items older than a year are typically considered dead stock. If they cannot be sold, trying using these methods to get rid of dead stock
Topics: inventory forecasting, inventory management, small business, SME