Ask just about any business, and they’ll likely be able to tell you when they experience sales spikes. Some are unsure why exactly they experience fluctuations. Others understand their seasonal spikes well very and can trace them to industrywide trends.
Companies that focus on gifts, for instance, may see sales increase drastically during the winter holidays, Mother’s or Father’s Day, Valentine’s Day, or other celebrations. Health and wellness companies that sell supplements or fitness gear, on the other hand, tend to see a short spike around the New Year and then experience another longer spike in the spring as people start preparing to shed their winter coats and replace them with shorts and tank tops.
Snowshoe and ski apparel obviously see sales ramp up in the fall and early winter. Sunglasses, yard tools, and deck furniture, of course, see sales spikes in the spring and summer months. And, late summer into early fall is the time to prep for holiday sales spikes (e.g., Black Friday) of electronics and toys as well as for warmer clothing and holiday decorations.
Understanding how to prepare for increased seasonal demands, along with the potential droughts in-between, can help your company take advantage of the spikes without withering away during the drier times. Proper planning and inventory control can help to ensure your peak season is a smooth one, preventing lost sales due to stockouts as well as reduced profit margins caused by excess inventory.
Pros and Cons of Seasonal Demands
For an unprepared company, seasonal demands can cause chaos, mismanaged inventory, and even lost sales. For a company that’s well-prepared and able to ramp up smartly, though, increased seasonal spikes can be a perfect time to maximize sales and gain new customers.
To be prepared, it helps to plan and get ahead with enough inventory for the season. Stocking up can help you rapidly respond to even a big increase in consumer demand. Not having enough stock for the season can leave orders unfulfilled and frustrate customers. Yet having too much stock can be a costly error, leaving inventory on shelves rather than in the hands of customers, and could ultimately destroy a young business that’s left holding the bag. It’s not always an easy balancing act.
To help get a handle on seasonal demands:
- Use historical analysis combined with real-time order data to help you forecast your inventory needs. For instance, you can see how your business performed last season with your sales for the current year to help realistically predict increased demand. This allows you to order the right amount of inventory at the right time to ramp up for the season while taking your current growth into account.
Be careful, though. Overordering is a common mistake with companies that are unprepared for the rush, who then build up stock near the end of the cycle, with products not hitting the warehouse until sales have already begun to slow.
Instead, keep in regular communication with your manufacturers or suppliers, and order key products more frequently rather than just one large order before the season. This way you can fine-tune as needed to meet demand without overstocking on products that don’t meet sales expectations.
- Keep an eagle eye on your real-time orders and inventory levels, so you know exactly what’s in stock, and how much and how soon to reorder. This can also allow you to adjust your marketing efforts and strategy to encourage more or less sales to match inventory levels.
- Partnering with a quality fulfillment center will ensure that you have the increased staffing and warehousing needs during seasonal spikes. Again, though, open communication is key to ensure you and your partners understand the goals, promotions, and seasonal timing.
- Finally, don’t forget the importance of marketing. During industry-wide seasonal spikes, you also have greater competition for eyeballs. When you know customers are looking for the types of products you offer, make sure they can easily find you!
Choosing The Right Fulfillment Partner
In addition to proper inventory control, one of the biggest logistical challenges of seasonal sales is ensuring you have the right amount of staff—without overstaffing—to ship and receive the increased orders yet pull back as sales slow toward the end of the season. A great fulfillment partner can help with both.
If you are considering working with a third-party fulfillment center, it’s important to ask:
- Do they have the flexibility to deal with your changing seasons—have they worked with other brands in your industry?
- Do they have the staff and resources to handle the peak shopping seasons without letting orders slip or increasing the number of errors?
- Do they have the relationships in place with courier services to handle your increased demands?
- Do they have the experience to help optimize your inventory levels throughout the year.
These are good questions to have answered before committing to a potential fulfillment service. Here at QuickBox, we strive to answer these types of questions in our first consultative meeting.
Contact us today and speak with one of our experts about how we can help your company ramp up for seasonal sales and overcome chaotic sales cycles.