Back to blog home

Holiday inventory management: 7 tips for success

Illustration of a person using a locusbot to find warehouse inventory.

Think it’s too early to begin planning for the holiday season? Think again. The holidays are notorious for creeping into the forefront of retail merchandising long before their actual dates.

Pumpkin spice lattes and Halloween decorations in August… Christmas music dominating most radio stations on November 1st… you get the picture.

For e-commerce brands, this means that holiday sales spike well before December. That’s right: Consumers who are looking to save money and protect themselves against price hikes or supply chain woes have likely already started shopping.

Plus, sales that traditionally used to pop up after Thanksgiving are beginning over a month in advance, with Target’s Deal Days occurring in the first week in October and Amazon’s Early Access sale the following week.

One thing’s for certain – if e-commerce brands are hoping to stay ahead of the curve this holiday season, they’ll need to make sure all aspects of their fulfillment operation are in top-tier shape. This includes one of the most important factors of a successful e-commerce business: inventory management.

Want to find out more about managing inventory and fulfillment during the holiday season? Check out Ryder E-commerce By Whiplash’s full-length holiday fulfillment guide.

Why holiday planning for inventory matters

Inventory management at any time of the year is an essential part of providing a seamless customer experience and cost-efficient storage; however, it’s even more important during the holiday period.

The 2022 holiday shopping season is set to bring forth higher inventory levels and significant supply chain costs that could make or break an e-commerce brand’s bottom line. Not only that, but customer demand for a seamless experience this holiday season is at an all-time high.

Brands that have well-planned holiday inventory management practices in place are sure to have the upper hand in an already competitive landscape. Those who don’t? Their happy customers could quickly become frustrated and opt to shop with other brands in the New Year.

Common mistakes that brands make with holiday inventory management

Poor demand forecasting

The goal with holiday inventory is to have just enough products so that you can meet the uptick in sales, but not find yourself with excess on the shelves at the end of the season. It’s truly a balancing act – one that requires a tremendous amount of time and energy.

Brands will need to take a long, hard look into their previous holiday season data as well as current trends to better understand the consumer climate and make informed inventory decisions. If they don’t have the manpower or technology to do this, there’s a greater likelihood of too little or too much inventory – both of which could negatively impact holiday revenue.

Ordering inventory too late

It seems as though we never really know what we’re going to get when it comes to the supply chain environment. Between port congestion, decreased labor, and disruption to the production of goods, brands need to be extra careful about when they’re ordering their inventory for the holiday season.

Cutting it too close to the start of the holiday season risks having their products delayed in transit to the warehouse, or (even worse) lost along the way. To ensure that products are off the dock, in stock, and ready to be shipped out for holiday orders, brands need to begin ordering earlier than they do for their off-season inventory.

This being said, ordering too much, too soon could cause a spike in storage costs. As we said, it is a balancing act!

Not setting the right reorder quantity

Replenishing inventory is particularly vital around the holidays. No matter how much demand forecasting a brand does, there’s always a chance that stock will sell out. If your brand has an established reorder point over the holidays, make sure it covers this extra demand!

But the question is: How can we possibly know what will and what won’t sell out?

There isn’t a magical number – there is a reorder formula that can help point brands in the right direction regarding the quantity they’ll need to replace. The optimal reorder quantity for any given SKU can be found by multiplying the daily # of units sold by the average lead time.

Keep in mind, the resulting number needs to be taken with a grain of salt when there are volatile seasonal sales involved.

Not having a plan for leftover inventory

Brands will likely come out of the holiday season with some leftovers – and (unfortunately) we’re not talking about pumpkin pie.

Leftover inventory can be costly for brands, taking up storage space with a future that doesn’t look so bright if the products have gone out of style.

However, leftover inventory doesn’t always have to turn into dead stock. Leftover inventory can present an opportunity for retailers, as long as they have a plan in place like a discount promo code for the excess products or a flash sale.

How to choose and plan holiday inventory

1. Examine your historical sales data from previous holiday seasons

With the right tracking technology in place, a brand’s historical inventory data should be available to help forecast demand. While consumer behavior changes each year, keeping an eye on which products were bestsellers in the past is still a good starting point for demand planning.

Additionally, understanding which channels sold the most in the previous years can help order the right amount of inventory. For example, if a brand with an omnichannel fulfillment strategy saw most of their sales come from their drop-shipping channel into Nordstrom’s, they’ll likely want to stock up and prep inventory for that route again this year.

2. Look to social media to track seasonal trends

With consumers looking to social media more now than ever before for product discovery, it only makes sense that brands should keep a close eye on these channels as well. Social media holds the key to understanding ecommerce sales over the holiday season.

How? Every year, there are ‘hot’ products that seem to catch the perfect wave in social media. One year it may be the beloved shacket (sweater + jacket) and the next, it could be those timeless fanny packs that have inevitably made their way back into style. 

Brands who have a good pulse on the overall trends of the season are more likely to know which of their products fit into the ‘hot product’ type – and can stock accordingly.

3. Know when different types of inventory are required

There are three main types of inventory that brands may have: raw materials (bits and pieces of the full product), work-in-progress (inventory that needs additional work like custom embroidery or sub-assembly), and finished products (the complete product as it’s showcased on your site).

Understanding the type of inventory you’ll be selling this holiday season – and how much of each is required – is an excellent tool for successfully managing inventory. If a brand selling custom-embroidered sweaters didn’t stock up on enough thread to meet the demand, they’ll be out of luck for any pending orders that come through.

4. Check with your suppliers to understand lead times

As demand increases over the holiday season, it’s even more important to communicate with your suppliers. They’re likely getting swamped by many businesses, so it never hurts to reach out sooner rather than later.

Early communication allows brands to keep suppliers informed about their predicted order volume, and the suppliers can also give an estimate of how long it’ll take to get products ready and shipped to the warehouse.

Knowing lead time means you can make better decisions about how much stock to order upfront and cut-off dates for when you can reorder if it becomes necessary.

5. Work with your sales and marketing teams on how to spotlight different products

If inventory levels are piling up and sales are plateauing for certain SKUs over the holiday season, brands can work with sales and marketing to boost customer engagement and create value around particular products.

Spotlighting via social media, email, or an in-depth holiday gift guide can help create a buzz around SKUs that require some TLC. For example, marketing a few different products as a ‘gift bundle’ at a discounted rate increases their value and encourages customers to purchase.

6. Conduct regular inventory audits to see how inventory is performing

The best way to prevent inventory disasters? Audits. Inventory audits allow brands to spot problems that may eventually turn into some seriously negative customer experiences. For example, ordering a gift that is already sold out without knowing it!

While the holiday season can be busy enough to keep a warehouse on its toes – it’s still worth taking the extra time out of the day for a physical count. Regular inventory audits to ensure that your financial records and physical inventory are in line.

Plus, they provide the most accurate depiction of your inventory, helping keep your “in-stock” levels on point while preventing you from over or under-ordering products in the future.

7. Have a plan for how to respond to stockouts and excess inventory

The holiday season is almost certain to bring with it a few inventory hiccups like stockouts and excess products. But, the good news is that there are ways to navigate these stickier situations.

Stockouts can be scary, but something as simple as including a pre-order or a “back in stock” notification option for customers at checkout can reduce some frustration. Additionally, pausing ad spending and boosting it once products are ready to ship out again can help with any missed sales opportunities while products were off the shelves.

Similarly, excess inventory can be frightening for brands, but there are some easy ways to deal with it like offering discounts, including the products in a bundle, or even donating to a charity of your choice.

Ultimately, as long as brands have some sort of process to turn to when these roadblocks occur, they’ll be able to negate some of the underlying costs that come with them. Make sure your plan is set and ready to go before the holiday season ramps up so that if mistakes happen, you’ll be able to act swiftly and smoothly!

Looking for inventory management this holiday season?

With the holidays creeping closer at seemingly lightning speed, e-commerce brands need to have an established inventory management plan in place as soon as possible. Partnering with a technology-focused 3PL guarantees a team of experienced professionals managing inventory workflows with top-tier e-commerce technology.

Real-time inventory management with Ryder E-commerce by Whiplash

Inventory: Hot Products screen in Whiplash app.

Ryder E-commerce by Whiplash offers brands large and small a seamless technology toolkit for holiday inventory management. Our proprietary Whiplash technology platform can track stock levels in your online store, so you’ll never be guessing at which SKUs are running low. Your inventory levels are updated every time a sale or return occurs. Whiplash can send out notifications for low inventory levels with custom thresholds, so you’ll always have enough inventory for the products showcased on your site.

The results? Happier customers with consistent access to your most popular products – and no last-minute stockout surprises.

Inventory management system integration: ChannelApe

Ryder E-Commerce by Whiplash and ChannelApe.

With the integration of ChannelApe’s inventory management software into the Whiplash platform, brands have access to down-to-the-minute inventory levels ensuring the most accurate delivery dates upon checkout along with rules-based configuration and order routing based on inventory availability. Learn more about the ChannelApe x Whiplash integration here.

ryder by whiplash e-commerce ad
ryder by whiplash e-commerce ad
ryder by whiplash e-commerce ad
ryder by whiplash e-commerce ad
Latest content
Partner Announcements
zonos partner ad
trynow partner ad
loop partner ad
ecocart partner ad
corso partner ad
clearco partner ad
whiplash and justuno partner banner
ryder ecommerce by whiplash and nofraud partner banner
ryder ecommerce by whiplash and nofraud partner banner
your brand fulfilled
your brand fulfilled
your brand fulfilled
your brand fulfilled

Like or follow us on your favorite social channel for all Whiplash content releases.

Related Posts

Get in touch to see what we can do for you.

Contact Us - Bottom
* Required

We help emerging and established brands deliver their brand experience.

288 Mayo Ave., City of Industry, CA 91789


Copyright Ryder E-commerce by Whiplash 2024. All rights reserved. Use of this website signifies your agreement to the Terms of Use and Privacy Policy.