Bloomberg.com recently reported that retailers should expect a tough holiday season this year, with sales forecasted to rise only 2.4 percent—the smallest gain since 2009.
But customer demand can be hard to predict, and you don’t want to be left with too much or too little inventory during the busiest season of the year. So, how do you get your holiday inventory right as a brick-and-mortar store or online store? We have 5 tips to keep your store humming this holiday.
1. Brush up on trends.
Sales weakness can vary depending on what products you’re looking at. It helps to understand what’s popular this season. Trade and trend pieces and analysts reports can be good resources.
2. Know your strengths.
Don’t try to guess what appliances, for example, will be big this season. Focus on what you know. If apparel or toys, for example, are in your wheelhouse, concentrate on that. It helps to look at your sales history closely, as well as your inventory dynamics during previous holidays. In particular, try to find a year that’s similar to this year. If Bloomberg has it right, 2009 might the way to go.
3. Set minimum and maximum counts.
Minimum and maximum counts may seem obvious, but this inventory management technique is often disregarded. It’s fairly simple. You just need to set a reasonable minimum and maximum amount of each product you want to stock. When you’re running low, you order more.
4. Use software.
If you don’t have the time or desire to do your own forecasting, there are software tools that will do it for you. Many use fancy algorithms and sales history to more accurately plan your inventory needs and lower your costs. While we can’t vouch for them, Fishbowl, AMT, and JDA are a few examples.
5. Secure inventory financing.
To take advantage of bulk discounts or just-in-time ordering, make sure you have money on hand. Securing a business loan for inventory, a merchant cash advance, or a line of credit may help ensure you can jump on opportunities as they come knocking.