Inventory management is one of the most important aspects of any retail business, especially during the busy holiday season. And this year is no exception. Retail sales during the 2023 holiday season are expected to increase between three and five percent, while e-commerce sales are expected to grow by 10-13%, compared to 2022. As such, it is vital to manage your inventory properly to avoid potentially costly mistakes, such as having too many or too few items in stock. To help simplify your labor-intensive tasks, Better Business Bureau offers five tips on how to prepare and organize your inventory for the holiday season.
1. Build a sales forecast based on last year’s data
A sales forecast is an estimate of how much merchandise you will sell during a specific period. Building a sales forecast is essential because it allows you to accurately predict how many products you will need to keep in stock. When building a sales forecast, start by looking at your sales reports from last year. This will give you an idea of how much inventory you need to keep in stock compared to your sales volume. This data provides a good jumping-off point when preparing and organizing your inventory for the upcoming holidays.
2. Conduct market research to predict upcoming demand
Once you have prepared your baseline sales forecast based on last year’s sales, it is vital to conduct market research to predict upcoming demand. This will allow you to plan your inventory for the future and avoid potentially catastrophic mistakes. This market research will also help you predict which products will be most profitable to sell during this busy holiday season.
3. Audit your current inventory
With your sales forecast in hand, you can now move on to your core inventory. It is imperative to be mindful of your inventory because it can make or break your business this time of year. To stay on top of your stock, it’s essential to conduct an inventory audit. Inventory audits show you the current state of your inventory, including how many units of each item you currently have available. It’s important to start on this well ahead of time because when partnered with your sales forecast, it will allow you to make more informed decisions for the holiday season.
4. Plan for extra storage
With your core inventory in place, you should now be thinking about how you will make room for the extra stock you need to keep on hand to fulfill holiday orders. It’s a good idea to plan for extra storage during the holiday season to keep your inventory flowing. This can be done in a few different ways. One option is to rent extra storage space in a warehouse, especially if you don’t have much space in your facility.
Another solution is to rent a portable storage unit. This is a good option if you have to move your inventory quickly, and it works particularly well for small businesses that have a place to park a portable storage unit, such as a POD. This method allows you to prepare and manage your inventory on-site instead of having to wait for orders to arrive at your warehouse or another facility.
5. Create a replenishment plan
A replenishment plan details how much inventory is needed, when it should be ordered, and who will place the order. A good replenishment plan will help you avoid running out of stock and ensure that you are meeting your customers’ needs. This step is crucial when preparing and organizing inventory for the holiday season, as it will help you stay organized and ensure that you have enough products in stock to fulfill all your orders.
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Check out the BBB business news feed for more excellent tips and tricks to help you prepare for the holiday season! Stay up to date on BBB’s holiday tips and news. Visit the BBB Biz HQ for the latest business news and resources. Want to grow your small business? Apply these 5 uncommon techniques to grow your small business.
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