5 ways to optimize inventory for high-volume seasons

When it comes to high-volume selling seasons, there’s a fine balance between running out of inventory too early - and missing out on potential sales - and ending up with overstock, which can be difficult and expensive to sell once the season is over.

With a couple of key tips and the right product insights, you can make better decisions about your products and optimize your investment in inventory

In this video, you’ll learn how to:

Prepare a product plan for high-volume selling seasons
Leverage key insights that can help prioritize product decisions
Apply strategies that can help drive growth and value to your business

[MUSIC PLAYING] Making the right product decisions and the right inventory investment isn't easy. And when it comes to high volume selling seasons, like Black Friday, Cyber Monday, or back to school time, there's a fine balance between running out of inventory too early and ending up with overstock, which can be difficult and expensive to sell after the fact. Hi, I'm Rachel.

And today, I'm going to share five ways to make better and more profitable decisions about your inventory as you get into a peak selling season. The first thing you should do is create a product plan. As you get ready for a peak selling season, you'll want to set goals for your business. Decide what you want and then work backwards from there to build your product plan.

Whether your goal is to launch new product, increase sales, expand your customer base, free up cash, or a combination of a few, you'll need to make sure you have the right products available well ahead of the season to reach your goals. That leads us to tip number two, start your planning early. Two thirds of merchants start planning for Black Friday, Cyber Monday two months in advance.

And we're seeing more and more start even earlier. Suppliers usually operate at overcapacity during these peak seasons so check in with your suppliers early to make sure they can get your products ready and shipped to you in time. If your goal for the season is to grow and increase sales, a good place to start is with your top performing products, your A-grade products.

A-grade products are the specific products that generated 80% of your revenue from the last 28 days of sales. These products are your money makers. So if it aligns with your goals you laid out in tip one, then make sure you have these products available and easy to find on your online store. You could also feature them in your marketing campaigns. If you're heading into a big discount season, like Black Friday, Cyber Monday, use these products to draw buyers in and increase your average over value by bundling A-products with lower performing products, or setting shipping thresholds just above your A-grade product prices.

To identify your A-grade products, go to the ABC analysis by product report in Shopify and filter by A-grade. Another key strategy for you to consider is to get rid of your worst performing inventory, your C-grade inventory. C-grade inventory are you dead or slow-moving stock and represents the specific inventory that generated only 5% of your revenue in the last 28 days.

These products drive barely any value for your business but it's still cost your business money to store and manage that inventory. So you might think about deprioritizing or selling off your slow-moving inventory ahead of the peak selling season. So you can free up shelf space and cash for new and better-performing inventory. If you are heading into a big discount season like Black Friday, Cyber Monday, you may want to consider using these products strategically to drive more value for your business.

You could do this in a few ways. You could apply heavy discounts to C-grade products so you can attract more customers to your store and increase awareness for your brand. Think about bundling C-grade products with A-grade products to increase conversion rates and your average order value. Reward your top performing customers and increase customer loyalty by giving your C-grade products as a free gift to your VIP customers.

Give back by donating your C-grade products to a group or charity in need. To identify your C-grade products, go to the ABC analysis by products report in Shopify and filter by C-grade. In addition to leveraging your best and worst performing stock for the upcoming selling season, you may also want to prioritize products that perform well during the season you're prepping for, purchasing habits shift over the course of the year, back to school products perform best in the summer, swimsuits perform best in the spring, and ski equipment performs best in fall, just before winter.

No matter the product you sell, seasonality can impact the demand for that product. To account for this, look at the sales data for each product from previous years. To do this, go to the sales by product report in Shopify and filter by last year's dates. There is no perfect way to plan your product strategy ahead of sales season.

But if you create a plan aligned to your goals, start early and leverage a combination of relevant product insights, you will more than likely be successful. [MUSIC PLAYING]

Learn more about ABC Product Analysis and apply these additional strategies to your A-grade and C-grade products.
Learn more about product seasonality and how to build a product forecast that can help you drive long-term growth.