Your small business may experience a sudden surge in sales during different times of the year. These fluctuations may happen during the holidays, summer or other occasions. These surges provide your business with opportunities to increase profit, but also possible challenges. You might not have enough inventory to keep up with demand or have logistical problems because of the spike in orders.
Warehouse availability and storage space may be low during seasonal fluctuation, regardless of whether you want to purchase or rent. Many warehouses may already be full by the time you want to rent or buy space for your products during holidays or peak seasons. They might also want a longer contract and not just during seasonal demand. This will cost your small business more because you won’t need the storage during low seasons. In such cases, your small business may be unable to fulfill orders. You might lose customers to your competitors because of the undersupply.
This is why you might have to change some aspects of your inventory management system to account for the seasonal shifts. Here are some of the ways that enable you to manage inventory during seasonal fluctuations.
A sudden surge in sales is unpredictable, but you can identify patterns when fluctuations are likely to happen. You can do this by making accurate forecasts using previous sales data. A forecast allows you to prepare for shifts that may affect cash flow and staffing needs. Once you identify possible upswings in sales in various times of the year, you can adjust your budget, re-allocate resources, and hire temporary employees. These practices provide you with the financial flexibility to meet customer demand. A forecast also enables you to prepare for a possible supply chain disruption.
Sell Slow Moving Products
You might have to sell slow-moving products to make room for inventory you need to meet customer demand during seasonal sales peaks. If a product has been on your shelves for months, it’s time to put it on sale. You can sell it at a substantially discounted price or bundle slow moving products together. 2 for 1 specials, promotions and other pricing strategies allow you to move these items quickly.
Even Distribution of Inventory
Your inventory management system should provide you with an overview of the high-demand products. Review the numbers and determine which items you need to buy more of and which ones you can reduce. If your small business caters to an international market, it helps to understand the demand for your products. This approach enables you to meet the demands of these customers.
Use the First in First Out Method
This method moves the oldest product in your inventory to customers first. This approach is ideal if your small business sells seasonal items and perishable goods. Consider using this method during fluctuations so that you can boost profits while certain items are in high demand.
Adjust your inventory management system to meet seasonal demands. Rent storage space or consider getting your own. We at Robookkeeper can provide you with outsourced bookkeeping services whenever you need to update your accounting books because of these adjustments.