Inventory management isn’t the most fun part of owning your own business. But there’s no escaping the fact that it is definitely one of the most important.
During the holiday season though, it goes from being an important task to a crucial one. But even if it’s a task you might not especially enjoy, it doesn’t have to feel like rocket science. Below are five hacks that will lead you down the path of smarter inventory management this holiday season.
1. Create Well-Defined and Unique Item Descriptions
It might seem obvious, but creating well-defined and unique descriptions isn’t always second nature for merchants. But we can’t emphasize its importance enough. Vague item descriptions are not only confusing, but can lead to major inventory and ordering mistakes.
We recommend coming up with a consistent template on how to label merchandise. For example, are you selling sweaters? Make sure that each sweater is marked in your inventory with the size, color, style, and vendor. It might look something like this: Color_Style_Size_Vendor. This way, even if you wind up with three sweaters that are blue and crew neck this season, you’ll be able to distinguish between them. Prefer to use a modifier other than vendor? That’s fine too. Just make sure that your inventory list is consistent and that all — we repeat all — employees find the system intuitive and easy to use.
2. Create a Forecast for Seasonal Sales
Merchant calendars can be broken up into two different periods: the holiday season and the rest of the year. That might sound a little extreme, but it’s not too far off. The holiday season is an animal all its own, that’s why holiday sales projection is imperative. You’re guaranteed to sell more stock during this two-month period than at other times during the year, so it’s important to know how much inventory to order. To do this successfully, you need to be able to predict — based off your current year’s trends and last year’s sales — how well you think your business will do. For a step-by-step guide on how to do this, check out Your Sales-Driven Little Helper This Holiday Season.
3. Apply Market Knowledge
Nobody knows the industry as well as you do. Isn’t that why you started your business in the first place? So, now’s the time to take advantage of all that amazing knowledge. As you already know, no two holiday seasons are alike. Trends and novelties change direction like the wind, so knowing what is hot and what is not is half the battle when it comes to inventory management and merchandising.
In short, make sure you are applying your knowledge of trends to your ordering and inventory management. Just because puce is your favorite color, doesn’t mean it’s what your customers are going to buy. Tapping into your knowledge of industry trends can convert directly into sales.
4. Analyze Sales Throughout the Season
A one-and-done mentality should never be applied to inventory management, especially during the holiday season. Just like you analyze quarterly sales, you need to interpret your data regularly — weekly at least, if not daily. This will give you a better idea of smaller or last minute inventory orders you might need to push through.
Regular checks on how your inventory levels are doing are essential, so is keeping in mind your holiday timeline. For example, if you’re a grocer and notice that you sell out of cheesecakes every Friday during the holidays, it’s safe to say that you need to have more cheesecakes on hand Friday afternoons. But keeping in mind your timeline is also crucial. You might need a dozen extra cakes this Friday, but if next Thursday is Christmas, cheesecake consumption will probably be tapering off by the following day.
5. Don’t Hang On To Inventory
At this point, even if you’ve become an inventory whiz, you are still likely to finish the holiday season with some back stock. You might be tempted to hang onto this merchandise with the hope of moving it in the coming year. And depending on your business, that might be the correct call. But if you’re a clothing retailer or simply don’t have the space to store extra stock, you might want to consider marking it at a discount and making whatever profit you can.
Remember how we touched on industry trends earlier? Hanging onto too many camel hair coats might not sound like a bad move in the beginning of January, but before you know it, you’ll be receiving your spring stock and stuck with outerwear that might not be in style next year. In this case, it’s best to mark these puppies at a discount and part ways with them. Making a smaller profit off of them this year is far superior to not being able to part ways with them in a year’s time.
Still looking for inventory tips and tricks? Checkout 5 Simple Ways Your POS Software Can Help Control Your Inventory. Have amazing tips you want to share? Let us know in the comments section below or tweet us @ShopKeep.