Ever wondered what happens to all the roses that grace utility stores soon after Valentines? Your guess is as good as ours. They wilt and wither away. But does that stop growers from preparing their land in preparation for next season? Do retailers refuse to stock up in other months of the year? They don’t!
In the presence of seasonal demand, your business can either make a kill and compensate for the periods of poor revenue or capitulate and become unsustainable. Just about every product on the market today has that time of the year when sales plummet, only to bounce back some time later. The secret lies in knowing the seasonal trends that come with your product.
Without mincing words, let’s see how small business inventory management can help you make the most out of seasonal demand.
- Know the Lifecycle of Your Product
This simply means that you have to establish whether your product is a one-season wonder or if it has a life off-season. Some products are season-specific, such as Christmas décor and ice cream. If your wares fall into this category, you might want to completely scale down your inventory during the “dry” period.
For one-season wonders, you must come up with an inventory management schedule that revamps your stock just in time for the season. You cannot afford to be understocked just when demand is shooting up. An inventory control software can help you forecast the quantities you need with a good level of accuracy. In particular, it can help you establish the length of the season to give you a better picture of the inventory levels you need.
Similarly, your product may not be a one-season marvel but still experience peaks and troughs of demand. There will be months when your sales break earlier records. Other times you’ll sell very little. This is where 80% of products lie. And the key to growing your business from year to year lies in your ability to forecast demand. In this situation, a sales forecasting app comes in handy.
- Select an Efficient Inventory Management System
Every successful business must be anchored on an efficient inventory management system. It’s the cog that keeps all the parts of your business moving together. But how exactly does such a system help you deal with seasonal demand?
To forecast and predict future demand, you’ve got to go compare sales of a given period, say, January through March, with similarly dated sales from other years. And though manual records can give you an idea of what you need, they are ridden with human errors and computational burdens. An efficient inventory management system automatically keeps such records for you. That way, you’re able to concentrate on other important aspects of your business, such as customer service.
If your business falls outside already established markets, it might be difficult to establish seasonal trends that can inform your inventory management habits. An inventory management software becomes even more important since it helps you to quickly gather and accumulate data for forecasting purposes.
- Know Your Lead Time
Product lead times are central to getting the most out of seasonal demand. If the delivery time is long, you’ll want to place orders well in advance of the season. In such cases, there’s very little room for inaccuracy because you cannot place mid-season orders. You might end up receiving the order when demand is no longer high, and that can only lead to large-scale losses.
If the lead time is short, you do not need to a stockpile for the entire season. You can start with just enough inventory to meet current demand and maintain full displays to attract customers. In such a situation, you can place re-orders as many times as necessary, even if it means using the services of several suppliers or manufacturers. So, how can you establish your lead time?
An efficient inventory management system helps you to establish your product’s lead time by tracking inventory movement from point of purchase all the way to your warehouse. The best inventory management software today track stock movement in real time.
Seasonality in demand is here to stay, and the best way to deal with it has to involve excellent inventory management. DataQlick can help you to achieve just that. Try it today.
