5th September, 2023
Technological advancements in inventory demand management and shifting consumer preferences have created incredible opportunities for eCommerce stores, and the future looks bright.
Online sales of physical goods are projected to exceed $563 million by 2024.
The catch?
Demand ebbs and flows considerably throughout the seasons.
For wholesale distributors, the inconsistency can increase costs while putting pressure on staff, warehousing and inventory.
The question is: how can you effectively optimise your warehousing strategy to make the most of seasonal demands?
Seasonal inventory demand is when certain products experience a sales spike at specific times of the year.
The most recognisable example is the holiday season in December when many businesses witness a big uptick in customer visits, website traffic and orders.
However, depending on your business, you’ll experience seasonal demands over summer, winter or around specific holidays.
Let’s dive into the most common challenges you’ll face as a wholesale distributor:
Managing inventory and storage costs is a significant concern for retailers.
During peak holiday seasons, storage requirements can escalate significantly.
This forces businesses to either invest in storage and fulfilment contracts that cover peak times, or opt for more flexible storage solutions, potentially leading to resource strain when demand surges.
Dealing with dead stock is a constant challenge for merchants. During volatile times, the problem can be magnified.
Inventory that was once in high demand may lose its appeal rapidly.
The shift in consumer preferences can leave businesses with obsolete stock that occupies valuable storage space.
Addressing this might involve liquidating slow-moving inventory before peak demand hits, even if it means a revenue loss, to create space for high-value products.
Not storing enough desired products during peak seasons can lead to missed revenue and customer dissatisfaction.
Stockouts contribute to a loss of $1.1 trillion in revenue globally each year.
Events like the pandemic exacerbated the issue, with stockouts increasing by 250% as supply chain disruptions and workforce challenges took their toll.
Businesses must strike a balance between holding enough stock to meet demand and avoiding excessive storage costs.
Businesses often consider stocking products specific to certain seasons or holidays.
However, adding these items can strain warehousing resources since they don’t replace regular products but rather supplement them.
For example, supermarkets might introduce holiday-themed items while maintaining their regular inventory, which can impact storage and fulfilment.
Regardless of size and scale, you need a seasonal inventory management plan. Here are some strategies that can improve efficiency and cost-effectiveness:
This involves categorising inventory into A, B and C tiers based on importance.
A-items represent best-sellers, B-items are moderately significant and C-items are low-priority.
After everything has been categorised, warehouse stock can be organised to optimise storage space and streamline order fulfilment.
Efficient order fulfilment processes are crucial.
Whether employing discrete order picking, wave picking or zone picking, the aim is to achieve swift and accurate order completion.
Setting inventory key performance indicators (KPIs) provides measurable insights into performance.
These metrics guide decision-making and strategy fine-tuning.
Despite potential storage challenges, maintaining safety stock will cushion your business against market volatility and reduce stockout risk.
Understanding inventory turnover rates means you can forecast future warehousing and procurement needs by gauging market demand.
Clearing out slow-moving inventory creates space for higher-value products.
Options include discounted sales, charitable donations or proper disposal.
Warehouse automation controls the movement of inventory in and out and within the warehouse itself.
Automation requires minimal human assistance, and a business can eliminate repetitive, time-consuming activities and human error.
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Capitalising on seasonal demand requires more than just a keen eye for trends — it demands a finely-tuned warehouse management strategy that creates seamless inventory control, efficient order fulfilment and resource optimisation.
This is where MYOB Advanced Business software is an indispensable asset.
With features to manage inventory across locations with complete traceability, eCommerce integration with platforms such as BigCommerce and Shopify, streamlined ‘pick and pack’ processes, actionable KPIs, safety stock management and insightful turnover rate analysis, the software transforms warehouses into strategic command centres.
Because the MYOB business management platform is a centralised tool to manage all your key workflows together in one place, you can use this single platform to move, manage, and monitor inventory across multiple warehouses and locations.
Keen to navigate seasonal demand with precision, confidence and efficiency? Get in touch with MYOB today.