Tips for Effectively Managing Seasonal Inventory

August 23, 2019
Read-Time: 5-7 Minutes
Warehouse storing seasonal inventory in winter

Long before the winter holidays arrive, seasonal suppliers are already prepping their supply chains to handle the uptick in demand. But without a warehousing and fulfillment strategy that is tailored to fit seasonal requirements, companies lose out on significant portions of their revenue due to year-round storage and inventory management costs. With this in mind, how does on-demand warehousing and fulfillment enable seasonal suppliers to avoid unnecessary expenses while still capitalizing on their peak season?

Topic At-a-Glance

Seasonal Suppliers Face Unique Demand Cycles.

While the supply chains of all industries come with their share of challenges, seasonal suppliers have a particularly unique set of obstacles to navigate. Today, there are many companies that experience a recognizable “busy season” where spikes in demand occur. These periods typically fall around a major holiday or event such as Christmas, where certain retailers can experience as much as 30% of their profits in just 2-3 months. However, even summer goods have a busy season. Such is the case with Scotts Company, a provider of turf and lawn care products that typically receives 70% of all sales between the months of March and August. But regardless of which season is the busiest, all of these companies have similar experiences in that their inventory and warehousing needs are lowered for large portions of the year, but then expand dramatically for a few months to accommodate the busy season. From a logistics standpoint, this introduces several key challenges.

How seasonal inventory can shift by month

Consumer Holiday Spend Continues to Increase.

To further illustrate the current state of seasonal demand, let’s examine the winter holiday months (November-December). In 2018, the average U.S. consumer planned to spend over $1,000 during the winter holidays. This put the total U.S. holiday spend at roughly $720 billion; a 4.3% increase from 2017 and the highest U.S. holiday spend on record. This increase marked 10 straight years of rising holiday spend. And although issues surrounding trade conflict and geopolitical turmoil have caused some concerns in 2019, this year’s holiday season is projected to build upon the growth of the previous year.

While this is overall good news for seasonal suppliers, it leaves major questions to address. Such as, how can a business develop and maintain a supply chain that is able to seamlessly handle this 2-month spike in product demand?

Annual growth in U.S. consumer winter holiday spend
Source : NRF

The Nightmare Before Christmas: Managing Seasonal Inventory.

While it might sound like a simplification of the supply chain to only experience demand for a portion of the year, it is the opposite that often holds true. Here’s why:

Comparison of how on-demand warehousing compares to traditional warehousing for seasonal inventory

On-Demand Warehousing Offers a Unique Solution for Seasonal Suppliers.

Without the proper warehousing and fulfillment solution, seasonal suppliers may spend a significant portion of their annual revenue paying for storage space they don’t need. However, consider an alternative option. With the arrival of on-demand warehousing and fulfillment to the logistics space, businesses are now afforded with a much more flexible solution for managing seasonal demand. Here’s how:

How on-demand warehousing compares to traditional warehousing for seasonal inventory

Final Thoughts: If Year-Round Warehousing Impacts Your Margins, Consider a Switch.

With the winter holiday season fast approaching, many seasonal suppliers are already preparing their supply chains to handle the demand uptick. But without the appropriate warehousing and inventory management strategy, a significant portion of their revenue will be spent on unnecessary fees and overhead. If this is a problem your company faces, it is strongly recommended that you consider an alternative warehousing solution. With the growing prevalence of on-demand models within the warehousing and logistics industry, there is no reason to stick with a provider that fails to address your specific requirements. And with the 2019 holiday season projected to be another massive year, now might be the perfect time to switch.

For more information about how Ware2Go can help your business manage seasonality, reach out to one of our representatives.

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