Whether you are an online seller, the owner of a traditional retail store or someone who makes a living supplying retail locations, you know the importance of holiday sales.
The holiday shopping season kicks off shortly before Black Friday, includes Small Business Saturday and Cyber Monday, and lasts through the entire month of December—that key month is a make-or-break time for businesses of all sizes.
If holiday sales are important for your business, it is never too early to prepare. Follow this list to get started planning for your holiday season sales today.
1. Estimate Holiday Sales
Start your early holiday season preparation by estimating your holiday sales. If you have been in business for a while, you can draw on prior year results to create a better-informed estimate. If you are new to running your business, base your holiday projections on your recent trends with a significant bump up in sales in December if your products are holiday gift-worthy.
Depending on where you sell online, you might even have resources available to help you estimate. For example, the Etsy Seller Handbook has an entire article dedicated to forecasting holiday sales that can be really helpful. (And if you want to get your products on to Etsy before the holiday season, here’s how to set up your Etsy shop fast.)
2. Save Up For A Bigger Inventory
Now that you have an idea of how much you are going to sell, it’s time to figure out how to pay for the inventory. I have a close friend who is an Amazon Marketplace seller using FBA — industry lingo for Fulfillment By Amazon — to sell his products. The last two years, he ran out of inventory during the holidays.
This cost him some serious sales opportunities. It is impossible to know exactly how many sales he lost, but you can learn from his lesson and avoid the problem all together thanks to great forecasting. Odds are ordering enough extra inventory to cover you for the holidays will cost more than you spend on typical merchandise orders, even if you can get a better price per item based on higher volume.
Start saving today for that extra order or, if you know you’ll need a business loan in order to stock up, now’s the time to start preparing your books and checking your credit to make sure you can get the loan you need in the timeframe you’ll need it.
3. Bulk Up Your Orders And Inventory In The Fall
Depending on your product, you might have lead times of a few days all the way up to a few months when ordering and stocking products. Thanks to the savings and loan options we just discussed, you should have enough cash on hand for a large order to get you through the holidays. Order as early as is feasible. Businesses that wait may miss out.
4. Implement Inventory Management For Best Selling Products And Services
Why did my friend run out of stock two years in a row? He didn’t plan for more sales than his projections. He did learn his lesson year one when he had customers viewing his pages on Amazon that said, “out of stock,” so he ordered even more for the next season.
What he didn’t count on was his product getting even more popular that year. Unless creating scarcity is part of your marketing strategy, this is a big mistake. Plan for at least 5% to 10% more sales than your initial projection to ensure you don’t run out of stock.
Inventory management software can help your business prepare for various scenarios and provide real-time information on inventory levels.
5. Prepare for Supply Management For The Holiday Season
One of the biggest challenges retailers and ecommerce business owners face this year is supply chain management. It can be difficult to get products delivered on time from the point of manufacture to the customer’s hands.
Reach out to your vendors and suppliers asap to start planning. Find out what they are expecting in terms of delivery times, and adjust if needed. If you sold a lot of product from a particular vendor last year, remind them. You want to be as high on their priority list as possible. If your suppliers can’t fulfill the large order, you could find yourself with eager customers and no products to sell.
6. Build In A Contingency For Missed Projections
When reading this advice about stocking up, you may have a lingering concern about what happens if you make a big extra order and it doesn’t sell as expected. This is a risk in any business that has to carry inventory. Here are a few potential contingencies if you end up hugely overstocked:
- Wait it out until the products sell. If you have the financial ability to wait it out, the products may sell over time eventually. If you have been selling your products successfully outside of the holidays, there is no reason to expect that to stop now.
- Post-holiday sale. As an expert business owner, you make pricing decisions based on data and know your exact margins. As long as your sales are still profitable, you can have a post-holiday sale to liquidate the extra inventory. The New Year sales season is another opportunity to move inventory.
- Inventory returns. Some vendors allow you to return products you didn’t sell. That depends on the product, customization and other factors.
7. Launch A Christmas Marketing Campaign
Now that you have a plan in place for your inventory and pricing, it is time to ensure you get all of those sales with a solid holiday marketing strategy. Holiday shoppers have a plethora of options for holiday gifts and are pelted by zillions of ads during the holidays. Doing your own advertising can help you stand out from the crowd and reach your target audience when they are ready to buy.
You may not have your own advertising agency, but you can still advertise on social media like Facebook, Pinterest and Twitter. Online ads and digital marketing can drive a lot of new customers for you, particularly if your business is primarily online. Don’t discount the power of promotion!
Reach out to loyal customers through email marketing and social media. If they liked your product before, they may be eager to buy again.
8. Ensure Website And/Or Apps Are Ready For Increased Traffic
Having your website go down, or your app unable to take orders, can sink your holiday sales. Evaluate your site speed, make sure you are aware of your site hosting’s capabilities if traffic increases dramatically, optimize page load speed and make sure you know who to contact if things do go awry. If you’re not comfortable handling technical issues, be sure to have someone on call who can help.
9. Add Shipping Delay Disclaimers
Supply chain issues and shipping delays may mean that some products simply won’t arrive on time. Be ready to update your website quickly when you become aware of these issues so you can prepare customers for these delays.
If your ecommerce solution provider allows you to provide updated shipping information to customers, make sure it’s available to customers. If not, you may want to consider email updates.
Some ecommerce sellers will make it easy for customers to reorder at the right time, for example, by offering a discount if they delay the order or a coupon for reordering in the future.
10. Consider Various Funding Options To Help With Increased Holiday Costs
For many retailers, the holiday season puts pressure on cash flow. You likely face increased costs this time of year, not only for inventory but also for other expenses such as increased staffing with seasonal employees, shipping, advertising etc.
There are several financing options to consider to help fund these expenses:
Line of Credit. A business line of credit is an excellent way to finance short-term needs. Once you are approved you can borrow what you need (up to the credit limit), repay it, and borrow again. Try to secure a line of credit before you need it so you have time to shop for the best financing.
Inventory Financing. Using your inventory to secure financing may give you the money you need to then invest in advertising or customer acquisition to sell it faster, re-invest in your business, etc.
Business Credit Cards: In a pinch, a business credit card can be a great option for short-term financing. Charge what you need, and pay for it later. Depending on when you time your purchase and your credit card’s terms, you may have almost two billing cycles to pay interest-free. Or you can consider a 0% APR credit card to finance purchases for a few months. Best of all, this financing option is available to startups that qualify.
Vendor Terms: Your suppliers may allow you to pay with net 30 terms, or even longer. This type of financing is often flexible, and approval will often be fairly fast, but it may require good business credit.
Keep in mind that some small business loans or financing take a few hours or days to get approved, while others can take months. (Here’s a quick chart on how those business financing options and their timelines can vary.) Nav can help you see where you stand and find the right financing for your business.
The Holidays Will Be Here Before You Know It
For many small business owners, the holiday season is the most important time of year in terms of sales opportunities. You can’t start too early to prepare yourself, your business, your inventory and your finances for Black Friday and beyond. Gear up early for the holiday rush to ensure you don’t miss out on valuable sales or end the holiday season with business regrets.