3 Ways to Manage Inventory During the HolidaysJami Schwartz
The period between right before Halloween until right after New Year’s Eve is the peak selling season for many retailers and some B2B businesses. Consumers buy gifts, throw parties, decorate their homes, and make travel plans. That’s the time when almost everybody in the company works hard at some aspect of the sales process; it’s also the time when companies may enjoy peak revenues and profits. However, inventory management is one task that usually must be attended to months or even years in advance.
However, most companies cannot afford to only stay in business for a few months. They may need to make plans for the holiday season all year. Besides businesses that usually peak during the holidays, other companies are seasonal for other reasons. A swimming pool company may peak in June and have little to do in December. These kinds of companies may also need some help to manage inventory.
No matter which category your business falls under or, if you’re just curious about how to manage inventory, take a look at the tips below to improve your inventory processes.
3 Tips to Manage Holiday and Seasonal Inventory
1. Plan for Good Cash Flow Management
In a perfect world, all companies enjoy positive cash flow all year. It’s obvious that companies that have seasonal or periodic ebbs and flows may not be able to constantly take in more money than they have to spend. For a simple example, consider that a Christmas tree farm still probably has to pay workers and utility bills in July.
It’s very likely that a business like that earns most or all of its money in the last couple of months of the year. Other examples of businesses that depend upon holiday sales include costume shops, gift shops, and party stores. They may also need to stock inventory and supplies that they need far in advance of when they actually sell their products at a profit.
2. Plan for Off-Season Inventory Discounts
If a business owner knows that the peak of sales occurs in December, that’s not when he or she should plan for the bulk of inventory purchases. Of course, many retail companies get the best deals on inventory during the off-peak season because their distributors and manufacturers also suffer from the same slow period. Of course, if sales are really great, sometimes businesses need to restock, so it’s a good idea to research distributors that can accommodate a rush order well before it needs to be made.
If you need to buy inventory long before you plan to sell it, you might consider business funding for inventory via a business loan. Some great online lending platforms offer online applications, immediate approvals, and rapid funding. You might not always know exactly how much money you will need to purchase inventory. If you apply for a line of credit in advance, you can be assured of quick funding without having to go through the application process again. At the same time, you won’t have to pay fees for money that you never requested from the lender.
3. Make Inventory Management as Efficient as Possible
If you still need to send employees out to search for and count inventory, you’re probably not managing your inventory efficiently. There are lots of different kinds of tags that range from metal plates to thin stickers. Almost all types of inventory products can get tagged with electronic labels that can be read by handheld readers, electronic registers, and even sometimes, cell phones. The supplies and machines that you need to electronically tag your inventory may be quite affordable. This is particularly true if your business wastes both time and money because you don’t know what you have or where it is at all time.
Once you have your merchandise tagged, you will be able to locate it. Some sophisticated systems even come with GPS tracking, which could be very handy if you are concerned about theft or simple disorganization. You will also have reports that will tell you exactly how long your inventory has been on your shelves or when and where it was sold. Some of the electronic tagging software also interfaces with other kinds of software you may need. This makes it very easy to coordinate inventory management with your accounting or customer relationship software. Since you may have to struggle to manage your cash flow, adding more efficiency to the way that you actually manage your physical inventory usually helps lower costs and increase profits.
Manage Inventory to Reduce Risk and Encourage Growth
Holiday and seasonal business owners may have to work harder than others to manage their cash flow and inventory. Making the process of predicting how much inventory a business will need, ordering it at the right time, and managing expenses can present a challenge. Still, most kinds of companies offer some products that sell more seasonally or periodically than others. No business owner wants to either run out of inventory or run out of cash, so it’s important to manage inventory well no matter what kind of industry you operate within.
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