Posted by Alex Jackson on 16th Mar 2018
When you stop and think about it, timing really is everything. Knowing just the right time to make that important decision or ask that important question can often be the determining factor between success and failure. After all, you wouldn’t ask your boss for a raise right after you lose an important client or make a costly mistake. You wait until after you bring in that big new account or figure out how to save the company thousands of dollars. Knowing the right time to buy inventory for your business is just as important as the goods you buy. If your timing is off, it could potently cause you to carry inventory longer time, limiting your profits so let’s look at a few basic tips on timing your purchases.
Stay ahead of the season, get an early start- Finding that sweet spot can be tricky but you know your business and your sales better than anyone else. Let’s say for example you plan on selling swimwear and you want to have your first load of merchandise available for sale the first week of April. Assuming you need about a week to tag and prep your first order of the season and that it takes 2 weeks to process and deliver your order that means you should be ordering between the first or second week of March. Being the first into the new season has its advantages, your picking up all those pre-season sales establishing a firm base on which you can quickly build upon. Want a season of great sales? Get an early start and you will be rewarded.
Don’t be the last guest at the party - It’s probably happened to all of us at some point, you’re at a party having a great time and then suddenly you realize, its 1 am and everyone else has left. This sort of thing happens all the time in retail, especially around the change in the seasons. It’s nearing the end of the winter season, still cold outside and sales are good so you decide to double down again on some fall winter clothing. You place your order 2 weeks go by and you receive your order. The only problem is that it’s now sunny and 65 degrees! Those heavy winter wear items are about to be buried in the closet again and replaced with lighter spring-summer apparel. Demand drops rapidly and you could potentially hold onto your merchandise longer than you need to. So a general rule of thumb should be; don’t be the last guest at the party.
Don’t wait until you are out of stock!- when should you be reordering? When half or three-quarters of the goods are sold? Sounds reasonable but the problem with this idea is that your sales are already on the decline because of lack of inventory. Once you selected lot(s), placed an order and it is delivered, virtually all of your inventory is sold and your cash flow dries up. When should you be reordering? When you have all of your inventory available for sale and your sales are peaking not when they are on the decline. Always keep some dollars in reserve for your next order, don’t rely entirely on your current sales to place your next order.
There’s always an exception to the rule- So to summarize what we have said so far; get in early, don’t be the last out and reorder when sales are peaking. Now the curveball and this is for the seller not afraid of holding some inventory. It can pay big dividends buying out of season and knowing the best time to do this. Why buy out of season merchandise? Because it’s too good of a deal to pass on. For example, now is the best time to buy winter coats. The season is rapidly ending new loads are coming in and demand is dwindling. You can score some really great lots right now at end of season prices. What to look for? Those high-end coats $500-$800 MSRP, these sell in and out of season. Sure it may take longer and you may not get top dollar in August but September will be here before you know it and demand will creep back up again. Again this strategy is not for everyone but the rewards can be big if you time it correctly. Any other categories that you should consider buying out of season? Swimwear, Holiday Décor and Dresses/Formal all fit the bill.
Do not procrastinate! Even though we are halfway through the holiday season you need to start planning ahead for 2018. Have you been thinking about changing up your product mix next year or perhaps expanding your offerings but are debating on what direction to go? We are always here to help, so here’s some of our top performing categories [...]