One of the most important tasks for small business owners during the holiday season is ensuring you have enough products on the shelves for your customers. After sending out email blasts listing all your deals and promotions, not having the advertised sale items in stock can lead to poor customer satisfaction, a loss of revenue and even a ruined reputation.
As noted by the National Retail Federation, approximately 25 percent of holidays shoppers made their purchases from a small or local retailer in 2015. In fact, when it came to gifts for family, friends, coworkers and others, customers shopping at small business spent more than those who made all their purchases at big retailers. Consider these four holiday inventory management tips for your small business during the holiday season:
1. Make more accurate forecasts
Pinpointing the exact number of items you’ll sell this holiday season is nearly impossible. However, having a good estimate of potential sales is crucial for inventory management.
If you don’t have enough products, customers get mad; however, if you have considerably more items leftover that didn’t end up selling, you can be stuck with a mountain of inventory that might not be moving anytime soon.
Instead of blindly guessing, use a combination of your store’s historical data along with the projections from industry sources to make a more accurate prediction of how much inventory you’ll need.
2. Maintain backup suppliers
A streamlined and efficient supply chain is key to maintaining an optimal inventory count for the holidays. However, due to the nature of the season, there are any number of potential risks that may arise to toss a wrench into your supply chain. From a run on products to inclement weather and from logistical issues to sudden shutdowns, your supply chain may be vulnerable to a variety of problems. Any one of these issues can leave your company without merchandise during this high-traffic time of the year.
One way to overcome this potential vulnerability is to not rely on just one supplier. Small Business Trends recommended reaching out and finding a backup supplier that will be able to step in and take over if your original source somehow becomes unable to ship you inventory.
3. Consider inventory control software
Computer systems are making everything easier, and inventory management is no exception. Using an outdated pen-and-paper method for ordering, tracking and shelving inventory is not only inefficient, it can also create some glaring gaps between your supply and customers’ demands. Manual inventory tracking is a time-consuming endeavor that the hectic rush of the holiday season may preclude you from finishing.
Instead of these archaic methods, inventory control software provides you with the digital tools needed to reduce the amount of time you’ll spend tracking inventory receipts and invoices. Plus, almost all of these software solutions offer reorder alerts, so you’ll be able to immediately intervene to stop any potential shortage.
In addition, inventory control software can alleviate the headaches caused by one of the biggest problems associated with holiday shopping: the dreaded returns. With scannable barcode labels for products, you can guarantee that every item returned was originally purchased in your store.
4. Utilize alternative financing
Sometimes a lack of funding is the biggest obstacle for small businesses trying to optimize their inventory during the holiday season. Preliminary projections might show your company is poised for major sales in the next few months. Unfortunately, if you don’t have enough working capital to purchase a sufficient amount of inventory, you may find your shelves barren before you know it, without any means to restock them.
Fortunately, alternative financing options can provide you with the money you need, sometimes in as little as 24 hours. This can be used to purchase additional inventory to meet customers’ demands during the busy holiday season.