Image: bibiphoto/Shutterstock.com
It is that time of the year when the sales of every product jump through the roof. Wholesalers and retailers know well that the majority of the sales in Europe and North America happen before the Christmas holiday season. Sales for wholesale items usually start to pick up in September, jump really high in October, go wild in November, and somehow start to slow down in December, especially toward the end of the month, just by the time of Christmas.
A lot of wholesalers and retailers make up 50% to 80% of their annual sales during these three months. Wholesalers and shops get ready in advance for this busy period, to be able to satisfy the demand of their customers. This means buying wholesale and stocking necessary products in advance, making pre-orders and arranging logistics, finding retailers that will buy the stock, and securing orders from them.
Buy right products in right quantities
This process happens every year, and experienced wholesalers and retailers usually have procedures in place to procure the goods as smoothly as they can. One thing that may be different every year is the specific products that are in demand in that particular holiday season. Traders need to carefully research what sort of products they need to stock in advance in order to satisfy the demand. In other words, they need to know well what would sell the best this season, so that they stock exactly those products.
Because of high demand some products may be in deficit, and sell out quickly, so knowing what to buy and stock might be crucial for some products so that the sellers don’t have empty shelves instead of highly demanded products during the Christmas shopping rush.
This is especially through for smaller wholesalers and retailers, who have limited resources. Huge retailers and distributors can stock a whole spectrum of products as they are able to sell them. Some products will sell well, some not so well, on average they have better chances to make a profit than small traders with only limited ability to buy a few types of products. Besides large businesses have much better statistical information from their own sales in previous months and years that allows them to use this data for forecasting the sales in the coming months. Plus, they have access to much better buying prices with manufacturers and official distributors compared to small wholesalers and retailers, which allows them to offer better prices to their customers and thus be more competitive.
For this reason, small traders should be very careful what products they buy for reselling, especially during the time of the year when they are supposed to make their most profits. On the other hand, buying little stock for small traders is not optimal either. If they sell out their stock early, when there is still great demand, they might be no stock left with distributors either during this busy season, and no possibility to restock the item. Small traders will lose potential sales, and will not make enough profit compared with more accurate forecasted procurement.
Keep your stock in your warehouse
Wholesale agents who don’t stock products and only buy the stock after they have secured a sale, and traders who use dropshipping can be successful throughout the year. But during the busy pre-Christmas time things get more difficult for them. First, distributors and wholesalers at this time give priority to their brick-and-mortar customers who constantly buy from them in steady quantities. Second, they are more chances that an item may be sold out in the distributor’s stock, so selling it by dealers without knowing and hoping that the item would be available in stock of the distributors is a risky strategy at this time of the year. It is better if there is an opportunity, to buy and stock goods in your (or rented) warehouse, and to have the goods ready for shipping out as soon as you get orders. This will make your operations much better organized and predictable and give you possibilities for better profits.
Organize your logistics well
This leads to the next component for organizing pre-Christmas sales well, which is to have your logistics well organized. The pre-Christmas “busy” season literally means it is very busy. Every component of the sale channel is under an increased stretch. Starting from sales and buying personnel, accounting and bookkeeping, of course, the warehouse staff, as well as the shipping and courier companies. The volumes of work are much higher now than during the rest of the year, and everything should be done even faster than usual. Because the goods need to be ordered and delivered on time for the demanding customers. There are also many new releases of products that happen at this time of the year, and delivering a new release to the customer in time by the release date is very important. A small flaw in the logistics process can bring to big problems with the customers and be costly. Some of the external factors can be out of control. For example, if the supplier does not deliver on time or deliver at all, or the shipping company is late. Choosing reliable suppliers and shipping companies is part of the process.
Conclusion
In overall trading at this time of the year may add a lot of stress and gray hair to some wholesalers and retailers. But it is part of the cycle, businesses need to trade, and if organized correctly, it can go quite smoothly and bring a lot of profit.
Image: bibiphoto/Shutterstock.com
It is that time of the year when the sales of every product jump through the roof. Wholesalers and retailers know well that the majority of the sales in Europe and North America happen before the Christmas holiday season. Sales for wholesale items usually start to pick up in September, jump really high in October, go wild in November, and somehow start to slow down in December, especially toward the end of the month, just by the time of Christmas.
A lot of wholesalers and retailers make up 50% to 80% of their annual sales during these three months. Wholesalers and shops get ready in advance for this busy period, to be able to satisfy the demand of their customers. This means buying wholesale and stocking necessary products in advance, making pre-orders and arranging logistics, finding retailers that will buy the stock, and securing orders from them.
Buy right products in right quantities
This process happens every year, and experienced wholesalers and retailers usually have procedures in place to procure the goods as smoothly as they can. One thing that may be different every year is the specific products that are in demand in that particular holiday season. Traders need to carefully research what sort of products they need to stock in advance in order to satisfy the demand. In other words, they need to know well what would sell the best this season, so that they stock exactly those products.
Because of high demand some products may be in deficit, and sell out quickly, so knowing what to buy and stock might be crucial for some products so that the sellers don’t have empty shelves instead of highly demanded products during the Christmas shopping rush.
This is especially through for smaller wholesalers and retailers, who have limited resources. Huge retailers and distributors can stock a whole spectrum of products as they are able to sell them. Some products will sell well, some not so well, on average they have better chances to make a profit than small traders with only limited ability to buy a few types of products. Besides large businesses have much better statistical information from their own sales in previous months and years that allows them to use this data for forecasting the sales in the coming months. Plus, they have access to much better buying prices with manufacturers and official distributors compared to small wholesalers and retailers, which allows them to offer better prices to their customers and thus be more competitive.
For this reason, small traders should be very careful what products they buy for reselling, especially during the time of the year when they are supposed to make their most profits. On the other hand, buying little stock for small traders is not optimal either. If they sell out their stock early, when there is still great demand, they might be no stock left with distributors either during this busy season, and no possibility to restock the item. Small traders will lose potential sales, and will not make enough profit compared with more accurate forecasted procurement.
Keep your stock in your warehouse
Wholesale agents who don’t stock products and only buy the stock after they have secured a sale, and traders who use dropshipping can be successful throughout the year. But during the busy pre-Christmas time things get more difficult for them. First, distributors and wholesalers at this time give priority to their brick-and-mortar customers who constantly buy from them in steady quantities. Second, they are more chances that an item may be sold out in the distributor’s stock, so selling it by dealers without knowing and hoping that the item would be available in stock of the distributors is a risky strategy at this time of the year. It is better if there is an opportunity, to buy and stock goods in your (or rented) warehouse, and to have the goods ready for shipping out as soon as you get orders. This will make your operations much better organized and predictable and give you possibilities for better profits.
Organize your logistics well
This leads to the next component for organizing pre-Christmas sales well, which is to have your logistics well organized. The pre-Christmas “busy” season literally means it is very busy. Every component of the sale channel is under an increased stretch. Starting from sales and buying personnel, accounting and bookkeeping, of course, the warehouse staff, as well as the shipping and courier companies. The volumes of work are much higher now than during the rest of the year, and everything should be done even faster than usual. Because the goods need to be ordered and delivered on time for the demanding customers. There are also many new releases of products that happen at this time of the year, and delivering a new release to the customer in time by the release date is very important. A small flaw in the logistics process can bring to big problems with the customers and be costly. Some of the external factors can be out of control. For example, if the supplier does not deliver on time or deliver at all, or the shipping company is late. Choosing reliable suppliers and shipping companies is part of the process.
Conclusion
In overall trading at this time of the year may add a lot of stress and gray hair to some wholesalers and retailers. But it is part of the cycle, businesses need to trade, and if organized correctly, it can go quite smoothly and bring a lot of profit.
