This time of year in Indiana, you can’t mention seasons without noticing the temperatures are cooling off a bit, the return of Starbucks’ Pumpkin Spice Latte and store shelves stocked with smores fixins’ and Halloween costumes for little ones.
When it comes to seasonal inventory management for businesses, the cues aren’t necessarily as pronounced as the cues from nature. How can you properly gauge your season(s) of highest demand? When should you order products and how can you accurately predict product quantities without being stuck with excess inventory at the end of the season?
These are all very typical questions we hear from businesses who are either a) just starting out or more often than not b) experiencing exponential growth. Here are 5 tips to help you learn faster and further to best handle seasonal inventory fluctuations when it comes to warehousing needs.
Identify Your Season of Highest Demand by Product
Depending on your business and the products you offer, you may have more than one peak season to consider when it comes to inventory management. For example, home improvement companies may have a spike in the spring due to coming wedding or graduation parties, tax returns or even final preparations to get a home listed to sell. But, for some companies the largest marketing push of the year takes place in the winter months during home show events. It might be necessary to plan for two (or more) distinct “busy seasons” for your inventory management levels.
For retailers, each season typically brings a different product that is “in demand”. Knowing which products to stock during which seasons is critical to proper inventory level management.
Act on Historical Data
For new or rapidly growing businesses, you likely won’t have the luxury of historical sales data to accurately forecast current season demands. However, for companies who have been in business for 3+ years, looking at historical inventory levels AND historical sales numbers can help you better prepare to inventory and sell the most product at the best profit.
Historical data may even help you spot an unknown product demand. [Bonus points if your website or online analytics tools can help you identify back-ordered products or searches for items you don’t currently carry.]
Know Your Timelines
As important as it is to know what you’re buying, how many you need to order and when your customers are looking to purchase those products, it is just as important to know the lead time it takes to get the inventory to your warehouse, process the orders and leave plenty of time for product sales and positioning.
Optimizing the inventory management process to align with your customers’ demand is key to managing seasonal inventory spikes while maximizing profitability.
Consider Complementary Products
If your business is extremely seasonal, it might be wise to consider adding complementary products to your business offerings. Are there products that your customers purchase before or after they purchase your products? Consider making those a part of your business model to help boost sales year round. It should be noted, these complementary products should only be products or services that naturally fit into your business and area of expertise.
An easy example would be lawn care companies that offer snow removal services in the winter. Companies who offer football jerseys may consider adding basketball or hockey gear.
What is the easiest way to identify these untapped markets? Look at your competitors. Ask your customers how else you can serve them? Ask your sales and marketing teams if they notice any trends with leads. Utilize online keyword tools to explore additional and related keywords to your current products.
Explore International Options
While international expansion has its share of challenges, there can be huge payoffs. For example, if you offer seasonal apparel, while temperatures may be cooling down in your city, there are countries around the globe still in the heat of their summer season.
Whatever your seasonal demand issues, these 5 tips should help minimize some of your warehousing stresses. At RISE Commercial District, we take pride in offering flexible lease terms, allowing our tenants to add square footage during busy seasons and scale down during slow times. This has been a HUGE help to the continued success of our business community.
Have you utilized any of these seasonal inventory management tips in your warehouse management?
