When running end of season sales, destash deals, and general clearance clean up, you are bound to generate some traffic and excitement.
However, sales eventually die down and it’s time to assess the damage of left over stock. Let’s face it- being stuck with leftover, devalued stock stinks.
We have some cures for those nasty sales hangovers with a few tips for preventative measures.
1) Eliminate excess sizes that don’t sell well
To avoid the costly and wasteful nightmare of ending up with a million smalls after a big sale, you will want to buy a good ratio of sizes your customers will actually purchase.
Typically vendors cut their styles in 2/2/2 – two large, two mediums, two smalls. However, most are willing to cut packs differently if you meet the minimum order.
Buying 3/2/1 packs will give you the same amount of clothing, but it is split up differently- three larges, two mediums, one small. Larger styles are usually the most sought out sizes, which is why you may be left with a surplus of smalls. Buying 3/2/1 packs will help lessen the issue.
2) Prepare a quarterly cash flow statement to forecast your financial standing
It’s important to forecast your cash flow so you can have a clear picture of business performance. These statements will help you understand how much you are making and how much you are spending, making certain that you are getting a return on your investments.
If you’re waiting until the end of each year to plan this out, you are waiting much too long! Monthly cash flow statements can help you predict costs and avoid unnecessary spending in the future. Get a better picture of your financial standing with regular check-ups.
3) Spread out inventory throughout the month
It’s exciting to get a new shipment in and want to share immediately. Don’t give into this temptation though. Instead, making a plan on how to spread your inventory out. Running short on inventory throughout the month is going to create sales lulls.
Create a week by week schedule to introduce new stock to your shop. This will also create a way to keep up with market relevance with changing seasons.
There are some bumps in the road you can’t altogether avoid when running a business. However, with a little strategy and planning, you can significantly lessen the blow of a sales hangover.
Planning the correct amount of stock to buy, prepping a monthly cash flow statement, and appropriately spreading out your inventory will give you clear goals to help your business succeed well into the future, even when sales momentum isn’t at its highest.