01 August, 2022

Effective inventory management: The secret to Black Friday success

Black Friday, Small Business Saturday, and Cyber Monday traditionally kick off the holiday shopping season. Large and small businesses often prepare for months to capitalize on shoppers looking for deals on these days.

Any glitches, such as not having enough inventory or problems with shipping and delivery, can lead to substantial reductions in profit.

Automated inventory management can ensure the entire sales cycle is managed well throughout the holiday shopping season. And the bonus? When customers have a good experience, they become returning customers.

This blog discusses how a seamless supply chain impacts online merchants and suggests inventory management tips for your upcoming holiday season.

 

Inventory management and supply chain for online merchants

In retail, the supply chain is defined as the process from order inventory to product delivery. Supply chain management consists of manufacturing, fulfillment, storage, and shipping. If any part of the process weakens, sales are negatively affected.

Merchants selling products online must plan for issues that could come up this holiday season.

 

Tips to manage your supply chain and inventory this holiday season

Choose the best suppliers

Online merchants usually work with international suppliers as a cost-saving measure. It’s better to work with domestic suppliers as you can:

  • Prevent customs delays and cross-border shipping.
  • Avoid unexpected new tariffs.
  • Replenish stock quickly and easily.

If you still work with international suppliers for your business, diversify your suppliers. By ordering from suppliers in several countries, you have a backup if there are problems with delivery from one country.

Plan the fulfillment process

If you are a merchant with a large volume of inventory, you can send it directly to a third-party logistics (3PL) provider. The 3PL company can handle fulfillment and shipping on your behalf and let you focus on what you do best: ecommerce strategy and marketing.

You must think carefully while choosing warehouses whether or not you work with a 3PL service. Use a warehouse close to the suppliers and begin ordering inventory early. By planning ahead with time, you will give the warehouse staff enough margin to organize and categorize the products correctly.

Merchants with unused brick-and-mortar stores should consider using the space as a warehouse. Using your own space as a warehouse gives you an excellent visual idea of how quickly your stock sells. It helps you decide which products to push with holiday sales. Thus, you can save money on external services and have more control over stock management.

Another popular holiday season shopping method is buy online, pick up in-store (BOPIS). This method became popular during the Covid-19 pandemic. These click and collect options remove complications related to shipping and let you enhance the customer service you can offer. If you look to implement store pick up this season, ensure your customers know how it works by including instructions on your site’s checkout page.

Talk to supply chain partners early

Your partners in the supply chain are your suppliers and manufacturers. You all must work and succeed together, so take the time to discuss order volume and develop a process that works for everyone.

Contact your suppliers as soon as possible to work out potential issues in the supply chain. The earlier you begin, the more you can anticipate and head off any problems. When discussing the order volume of the inventory, be specific and tell suppliers exactly how much you expect. If they flag any potential holiday supply issues, adjust the product range or diversity accordingly.

Keep in touch with 3PL companies regularly for likely changes as well. They could have staff shortages or a lack of drivers, delivery restrictions, or warehouse closures. Integrated warehouse management software can help you head off fulfillment issues.

Price your products strategically

After deciding on inventory value, vary product prices to control stock levels. Lowering the rates of well-stocked products means you can sell more. Raising the prices of items you have less of may reduce the number you sell.

Adjusting prices is all about finding the sweet spot to meet your inventory goals while maintaining your brand image. The rule of thumb is to keep pricing consistent. Making your products too cheap or too expensive can confuse the customers.

If you look to position yourself as a luxury brand, increase the prices and do a cost-benefit analysis to see what is more beneficial for your company. Lower prices on the products can shift more inventory, but higher prices return better profits and prevent you from running out of stock quickly.

One alternative to amending the products’ prices is to give discount coupons. You can shift the discounts to emphasize different products across your holiday sales season based on inventory levels.

 

Conclusion

Black Friday and other holiday sales events are so much more than placing a few ads and expecting high sales volumes. From a business perspective, they’re more about effective inventory management and best fulfillment practices.

Optimizing warehouse operations for accuracy and speed should be a top priority for any business during the holiday season.

That’s what Cin7 inventory management software is all about.

If your business sells hundreds or thousands of products towards the end of the year, you need an inventory management software with forecasting tools from a reputed company like Cin7. The Cin7 team will be more than happy to help you with your inventory management solution decisions.

Book your demo today!

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