Peak season makes up a major part of a retailer’s annual income. This requires a well-considered strategy to ensure that your business is well-stocked for the peak season and can support flowing sales during the busy periods. So what strategies do you need to have in place in order to ensure your stock promotes big business?
It can be so easy to run into discrepancies when it comes to managing your inventory. Between shrinkage, shipment variances, returns or lost items; what is on paper often doesn’t match what is in store. This in turn leads to mistakes in placing orders, loss of time searching for products that may not be there and general mismanagement. By staying organized and using smart, integrated systems, you will be able to trust your inventory lists and plan accordingly.
Re-order stock in the correct timeframes
Understanding what to order and when to order it, is part of the art of running a successful business. When products are flying off the shelves faster than you can reorder them, this is a nice problem to have. But it can also mean lost opportunities. Generally you will need to forecast based on historical sales, stock turn and sell through rates. This should then be cross referenced with promotional plans, economic conditions and seasonality in order to understand how your customer may behave going forward. Another important factor to consider is current trends in the market and whether your client is moving towards new buying behaviours and product choices. All these important factors will influence how and when you reorder stock.
Good communication with suppliers
Supplier relationships are a core component of any well-oiled business. This can mean the difference between late or low orders and the way you manage timeframes and discussions can make or break your pipeline. Always ensure you have very clear communication channels with your suppliers. Make it a priority to pay timeously, negotiate terms upfront and foster the relationship. When push comes to shove you want your supplier to prioritize your orders and anticipate your needs.
Categorize all seasonal products
Seasonality differs from business to business. It can be determined by the lifecycle of the product and whether it’s related to a particular holiday (like Christmas or Valentines Day) or a specific time frame like Summer. Other products can be sold year round but demand for them peaks and dives, like suntan lotion and coats for example. When ordering stock it’s important to consider the length of the season for that specific product and ensure delivery times match up. Also take into account the lead time of the purchase and whether it needs to be made in advance for manufacture.
Don’t forget working capital
Working capital is like air for business. Without cash on hand you can lose out on important discount opportunities and you may be forced to sit on your hands while your competitor pulls in the crowds. Inventory and cash flow are directly linked. One way to free up cash flow in your business is by liquidating surplus stock by putting it on sale or bundling products to move them off your shelves. If that fails, you can also contact liquidation companies. Another way to free up cash flow is to call on unpaid accounts. Contact customers whose accounts are in arrears and ensure they pay off their debt timeously. This will immediately inject cash into your business and you can then reinvest it back into stock that will sell.
Business funding solutions
Often opportunities pop up suddenly or unforeseen issues arise and you need to stock your shelves accordingly (like that time when we all suddenly needed to buy sanitizer)! On these occasions you need cash on hand, and you need it fast. A Merchant Cash Advance is a brilliant option for retailers as you can get access to large amounts of unsecured cash in under 48 hours. The Merchant Capital cash advance is specifically designed for retailers as repayments work in line with turn-over so seasonality and last minute opportunities don’t hinder the business. This can make all the difference when it comes to having the right products on your shelves at the right time.
The bottom line
Understanding the art of stock management is vital for a well-run business. It comes down to careful management, strong relationships and communication, as well as having reliable resources (like funding partners) to push the business forward when needed. To understand how Merchant Capital can support your retail business through the peak season, contact us today.