Seasonal Stock 101 – The trick to managing seasonal stock

 

How do you know if you have enough seasonal stock to cover the peak period? This is something you should be working out before the peak period hits you, so you have time to prepare.

To state the obvious, you start by evaluating how much stock you have now. Not just what’s physically in your warehouse – there are some other things you need to consider to ensure your seasonal stock is going to meet demand.

  

This is a combination of the stock you have in the warehouse, the stock you have on Purchase Orders and the amount of stock on customer forward orders.  Now once you know this figure for each item of stock that you have, we will call that figure “x”. 

  

You need to delve into the amount of stock that you sold last year in the demand period.

Look at sales figure for the months where that product is most in demand for the previous year (for example, October – December). This figure will be referred to as “y”. 

  

It’s basic, really. “x” represents your current stock levels, “y” is your predicted sales based on the previous year.

You need to subtract your Y figure from your X figure (X-Y=?) and this will give you the figure that will dictate how you handle your seasonal influx.

If it’s a negative value you need to look at getting some more stock. You don’t want to be heading into a busy period with insufficient stock, especially when it’s easily unavoidable.

If it’s a zero give yourself a pat on the back, you likely got it right. Depending on your industry and economic conditions that impact the previous season and the upcoming season, you may still be left without enough stock (or too much for that matter). You need to consider some additional factors to decide how to handle the upcoming peak period.

If you have a positive figure that’s where your cash is. You will need to strategise to increase your sales through the busy period. Get your sales team onto selling through that stock, and you will have enough money to take a holiday.