For 2020, Utilize pre-orders to avoid dead Inventory

Now that January sales are underway, now is the time to reflect on the previous quarter and plan. For retailers, the fourth quarter is generally the most rewarding. A lot people use that cash for re-stocking and living the quiet period.

After their credit card bills arrive in January, consumers stop spending. Sales plummet. Holidays like Valentine‘s Day, Mother’s Day, and Easter can generate a little revenue, but what matters for most of us is the way we did over Christmas, and the way we need to perform in the new year.

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…it’s time to reflect on the previous quarter and plan.

Large retailers will pour over their sales data, exploring customer trends and, already, planning for another holiday season. Smaller merchants can’t afford to invest as much money in research, nor will we allow significant retailers take all of the business.

But we smaller merchants can still analyze our earnings for trends. Who are our clients? What did they buy? Be dispassionate and ruthless here. It doesn’t matter how much we enjoy our inventory lines or how long we spend in descriptions and photographs. If products don’t sell, why keep them?

Dead stock

So as soon as you concentrate on simpler sellers, you need to dispose of the dead inventory. You could attempt to sell everything at a deep discount to some trader, or on auction platforms. It’s a chance to use the fundamental no-reserve auction on eBay. Just insert a delivery charge to make certain that you don’t drop money. But the secret is to be callous. Dead inventory is costing you money. It is tying up capital and shelf space.

There are, however some important points to take into account. First, the inventory has been on your warehouse for some time. It might have gathered dust and endured shelf damage. Your description on eBay must reflect this. Otherwise you risk receiving negative comments on a small sale.

Otherwise you risk receiving negative comments on a small sale.

Secondly, assess the finishing date and time of your auction. This can be overlooked; it can decrease your selling price. The last time I attempted to buy something on eBay, I noticed several watchers but few bids. No doubt some were waiting until the last couple of minutes for a fast bidding war, which may lead to a low or higher price, based on the excitement. In my case, the auction ended at 1 a.m. on January 1, an insane time to complete the procedure! The other bidders did not turn up, and I bought it for much less than it was worthwhile.

As soon as you’ve sold the dead inventory, now is the time to plan for the new year as well as next Christmas. Consider offering pre-orders. It is a subject by itself — exploring appropriate products, marketing to potential clients, and then communicating with these prospects about their needs.

Pre-orders

In the excellent retail world, we would only carry what sells. Pre-orders can be a terrific help.

In the excellent retail world, we would only carry what sells.

By way of example, the regional Star Wars fan group wishes to purchase the new action figures once they’re released. So the members have an agreement with a merchant wherein they place advance orders at a discount. The retailer knows precisely how many action figures to purchase. He’s paid when the stock arrives. This situation can apply to other market merchants. A large retailer wouldn’t do it. Imagine how profitable your business would be if each purchase was completely sold and fully paid for.

It’s an exceptional example of a smaller merchant prevailing over a major company that spends millions on research due to a lot of clients and an extensive stock range. A tiny independent with a limited selection and fewer clients can spend little on research and wind up with better information.

The first step in establishing pre-orders would be to resolve the payment procedure. Credit card companies don’t enjoy a very long delay between collecting money and delivering the goods. Nor do they enjoy an elongated delay between authorizing payments and getting money from the cardholder. Learn what these limits are for your chip. If you plan for pre-orders that extend beyond those limits, work out the way you would be compensated.

I used to keep customers‘ credit card information and process them as soon as the order was prepared. This is not a fantastic idea.

Some payment processors provide pre-payment processing, which can be acceptable for recurring payments, like subscriptions. The processors offer a token that securely encrypts card information and processes at the appropriate moment. Superior processors will even upgrade the card details as needed. Be certain that you use this type of chip.

See also:

/backorders-common-causes/

handling-backordered-items-best-practices/

ecommerce-supply-chain-optimization-tips/

how-to-reduce-backorders/

build-ecommerce-return-policy/

backorder-meaning-pros-cons/

Other key pre-order factors include:

  • Consider accepting deposits. Clients are less likely to cancel if they’ve paid a deposit.
  • Limit the amount of orders to make certain you’re not overextended.
  • Establish realistic expectations with your clients regarding delivery dates.
  • Finalize contracts with providers as soon as possible.
  • Always have sufficient cash to settle disputes or refunds.
  • Finally, communicate. Keep customers informed.

The previous one — communication — is the most significant. When things go wrong (and they will) inform clients. Tell them what you are doing to resolve. The more you involve them, the better chance you hang on to them.