Post on Friday, December 22nd, 2017 in Accounting
The holiday season is here, and that means all companies are extremely busy with holiday sales, discounts, giveaways, inventory management and other activities related to holiday hustle. Due to active movement of stock and a large number of gift returns, small businesses place a large percentage of their capital in flux.
That’s why if you own a small business, it is extremely important to keep track of your holiday inventory as accurately as possible, to make sure that the business does not miss out on any potential income or overstock and lose money.
So how to keep inventory for small business? In this article, we are going to share some useful inventory management tips that will help you optimize your holiday inventory management process and deal with unpredictable consumer demand.
Today’s market offers a wide variety of inventory and facility management tools that will keep your business up and running. Focus on your work and customer relations instead of managing your inventory manually, especially during the festive season. Automated inventory management is the perfect solution when it comes to managing the holiday inventory as well as inventory throughout the year.
It is almost impossible to define the exact number of items that you will sell during the holiday season. However, having a good estimate of potential sales is crucial for inventory management. To make a prediction that is as accurate as possible, combine the historical data of your store with projections from suppliers.
Place the high-selling holiday inventory items into locations and/or shelves that are easier to access. This will streamline the working process of your warehouse management team.
For each holiday inventory SKU, divide the net sales by inventory to get a holiday inventory turnover ratio (number of times). The higher the ratio, the more efficiently you manage your inventory. However, a high ratio also signals a danger of running out of stock.
As a rule, inventory management tools have convenient options such as reorder point and safety stock. When your stock falls below the level that you specify in the software’s settings, the system will alert you that it is time to reorder a new batch. Track down the high-selling holiday inventory in your system and pay particular attention to the reorder point settings for those products. As a result, you will never forget to replenish your inventory in time.
Suppliers are also busy during the holiday season, and it may lead to logistical issues or sudden shutdowns, leaving your company without merchandise. To prevent this from happening, do not rely on just one supplier. Do not forget that your competitors will also be ordering items from the same vendors, so we recommend that you find a backup supplier. A backup vendor will be able to cover for you if your original supplier becomes unable to ship you inventory.
Stock up beforehand and start ordering your holiday inventory in October or even earlier. Early ordering makes sure that your needed stock is available when you want it. Besides, many consumers start shopping for holiday goods in autumn.
During the holiday season, small businesses often get return requests for gift items. But the problem is that the gift holders have no receipts with their gifts. However, you can easily sort it out with the holiday inventory barcode labels. Even if you have no time to barcode each item in your warehouse, your employees can place the “required for return” barcode label on gift items. Therefore, a gift recipient only needs to keep the label on the item, and the gift giver does not have to worry about gift receipts.
You may have some overstocked items, so holidays present a great opportunity to sell it them attractive prices. But do you know how to manage inventory for a small business that is overstocked? A solution would be to move such items to a prominent location and group them with fast-moving products. If you sell online in an e-commerce platform, you can develop a holiday-focused online marketing campaign. However, if the overstocked items are more than one year old, it is usually too late to sell them, so consider giving them to charity.
Check whether the platform where you host your e-commerce is able to handle a large amount of orders during the holiday season to avoid the downtimes. This will be incredibly important on the user-experience front, and will convert more interested customers into buyers.
We hope that our inventory management tips will help you understand how to keep inventory for small businesses during the busy holiday season, and, ultimately, increase sales.
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Tuesday, December 11th, 2018
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