It’s that time of the year again: Christmas is just around the corner, and with it, the holiday season. This is when consumers are most likely to purchase presents and spend some coins on them, which means you should be prepared to be able to double or triple your sales.
Unfortunately, the holiday season can also mean that your stock runs out quicker than usual. Last year, customers received 6 billion out-of-stock messages, and went looking somewhere else for a replacement item. If you have a product or service that is especially popular during Christmas, it’s crucial that you have enough inventory to meet the demand.
We prepared a completely free checklist for you to make sure you are fully prepared for Christmas, everything is on track and ready to make its way to your customers. Spoiler alert: it’s all about supply chain, logistics and warehousing. Inside, you will find 9 steps to prepare your store with easy explanations from our e-commerce experts.
We can't stress the importance of early preparation enough. Having experienced last year's shipment delays, 62% of e-commerce businesses will start early this year by preparing in August and September. But only 4% of them can confidently say they are ready for the holiday season. If you haven't started preparing yet, you should do that now.
To avoid unnecessary stress you should think ahead of what needs to be checked and ordered. You might want to include the following items in your to-do list: plan your staffing needs, special packaging, sales collateral materials, check if your warehouse has enough space for the influx of orders, and make sure your order management system (OMS) is up-to-date with all the supply chain processes.
One way to get an accurate estimate is to use an inventory management tool like Finale Inventory, Shipmonk, or Xentral to forecast demand and ensure you have enough products in stock to meet it. However, this can be tricky, because forecasting demand is an art rather than a science. Look at your sales analytics from last year’s peak season. This entails a lot of hard data analysis, but it’s worth it when it pays off. See what sold well and what didn’t, and what your customers are saying.
If you’re a newer seller, you’re probably less familiar with which products will be the most popular this year. But that doesn’t mean you shouldn’t try to find out. In fact, one of the best ways to do this is to ask your customers. Asking them what products they most want to buy is a great way to get a rough idea of which products will be your biggest sellers this Christmas.
Pro tip: The best way to manage your inventory before trading peak is to estimate how much stock you’ll need and then add a 20% buffer volume on top.
Supply chain issues are your biggest challenge in preparation for Christmas, now more than ever. “Hey, unfortunately, your order will not arrive on time because of the delays at sea…” is a phrase you don’t want to hear this year. Communicate with your supplier regularly (multiple times a week!) to make sure they are on track and no delays will occur.
As a holiday-specific strategy, consider diversifying the suppliers you work with. You are probably already working with the best and cheapest one, but if you want to make sure you have enough stock, investing a bit more money will help to fulfil all the orders eventually and will give you piece of mind. Take a look at nearshoring or recruiting local suppliers to see what options are available to you, maybe from Turkey or other European countries.
Before the pandemic, shipping by air from Shanghai to London took around 3 days, compared to 3 weeks by sea. In addition to being faster, air delivery also has the advantage of less planning time, even though it's much more expensive than ocean freight. After the air shipping prices went up after the coronavirus, it started making more sense to get your products delivered by sea. However, if you are running out of time as the holidays are getting closer, consider shipping by air your investment in the successful Christmas sales season. The transport costs will partly be offset by the higher order volumes and the subsequent lower purchase prices.
You might want to rethink the list of products you want to sell this Christmas—see if you can hone in on what is stocking and trim some items that wouldn’t sell well during Christmas. Say, you specialise in home decor and you know Christmas wreaths will be all the rage. In this case, you could temporarily stop selling summer wreaths, since those will not have such a high demand. This, of course, comes with a downside for the customer because there is less choice available to them. However, for you as a seller the tactic of quality over quantity might prove incredibly useful, as you will only have items in stock that you know you can deliver.
On the other hand, over a quarter of Amazon sellers plan to expand their product lines for Christmas. Using our home decor example, if you already sell Christmas wreaths, you can think of other types of door decorations—door bows, garlands, lanterns, or event porch bundles.
If you are using a third-party fulfilment partner, contact them in advance to make sure they have enough space and can take your upcoming order. One way to reduce the risk of operational bottlenecks is to work with more than one warehouse, especially with regards to international e-commerce shipments. If you have the possibility of distributing your inventory across an international fulfilment network, you should take advantage of it. Moreover, moving the products closer to your customers will also help to reduce shipping costs and delivery times.
Pro tip: Myos has more than 150 warehousing partners across the UK and Europe and is happy to help you find the right one.
If you own a warehouse or just stock your items on your property, make sure you take around 80% of its stock capacity to be able to push it further when the products start coming in. If you do have enough storage space, there are still some improvements you should consider. Optimise time and space by automating as many processes as possible, including picking, sorting, packing, sending and managing returns. For repetitive tasks, data analysis and inventory control use a warehouse management system.
To save you some time, alter the layout you are currently using. Best practice is to organise your stock according to the demand, not the product's similarity. Keep the most in-demand products at hand, and put non-Christmas products further away during the season peak.
Once you have planned your demand and you have a product you expect to sell the most, make a special bundle or a gift pack with it. By creating a bundled offer, you kill two birds with one stone - first, your customers don’t need to think and spend time choosing, second, you can sell auxiliary items or include less-sold items.
On the other hand, standardising your products can also help sales. You can round numbers and offer products in categories such as gifts up to £10/20/etc., or introduce gifts for friends, family members, colleagues, or even think of their size.
For example, providing travel sizes of your most popular items could make good stocking stuffers!
With most suppliers demanding at least 30% as an initial payment, and 70% as a balance payment (in some cases rising as high as 50/50%!), you need to put together quite some cash for your big Christmas order at once. That’s a big strain on your cash flow!
If you don't have the cash yet to pay the first 30-50%, then when you get the money from previous orders, it will already be untimely to place an order—it will arrive too late. To avoid this, you need to have enough working capital to pay for your order. Financing providers such as Myos can give you peace of mind knowing everything is paid for.
With our inventory funding, you can get up to EUR/GBP 2.000.000 for your existing or future order. We support you with different payout types for different payment situations and your account manager will always be there for you to ensure smooth operations.