5 Tips to Better Inventory Management During the Holidays
In 2012, American consumers spent $580 billion during the holiday shopping season. Holiday spending has been on the rebound since the economy began recovering. That trend is expected to continue this year. As a small business owner, it's extremely important to be prepared. Ensuring you have all the necessary inventory on hand and that your shipping procedures and marketing initiatives are in order are a few of the biggest factors that can determine the profitability of your company's holiday season. For now, let's focus on inventory. Here are some tried-and-true tips for managing inventory during the busiest season of all:
1. Don't be afraid to negotiate with suppliers. The people you purchase products and materials from are aiming to meet or exceed last year's holiday sales just like you are. To do that, they'll be looking for ways to give good deals so that customers like you will purchase in bulk quantities. Bulk discounts are quite common at this time of year, and remember that even the initial price offered isn't set in stone. It can never hurt to push for a bargain. If your suppliers are in jolly holiday spirits, negotiating bulk costs can go a long way to help you save money on inventory up front.
2. Partner with other entrepreneurial friends. Every other small business is looking to stock up while cutting costs this season, too. If your business is still pretty small and a bulk discount isn't entirely an option just yet, maybe you know someone else who will go in on supplies with you. Think about whether the entrepreneurs you're friendly with use the same vendors, or maybe even buy the same products. Try combining forces to get a good bulk discount.
3. Consider additional financing. You'll likely face significant extra costs up front as you prepare for the holiday rush. Not only will you need bulked up inventory, but also additional packing and shipping supplies and other unforeseen costs. This means you'll most definitely need some extra cash. Even if you plan to turn an awesome profit after investing in these up-front costs, remember that those sales will come in a later profit cycle than you need them. It takes money to make money, simply put. By securing financing ahead of time, you can happily scratch cash flow off your company's holiday wish list.