Inventory Planning

In January of 2016, clouds gathered on the horizon. An ominous and roiling mass of darkness, a seemingly ceaseless stream of weather that would batter the entire east coast. Though its name variedsnowmageddon, snowpocalypseits effect was the same. Swaths of the country shut down, closing the battered doors to schools and offices, icy pools making driving impossible. And although personal suffering was minimalmodern conveniences make it easy to get by in a snow stormthe professional and business suffering of much of the nation was affected.
Small businesses and specialty retailers were forced to lock their doors and head home, mounds of inventory left untouched and unmetered. Major weather patterns like snowpocalypse 2016 are impossible to truly predict months in advance; small businesses could never have predicted or planned for the negative effect a single winter storm would have on their inventory. But it happened nonetheless; an unseasonably warm winter peppered with solitary and massive storms left smaller retailers with mountains of unsellable inventory.
How could specialty sports retailers have avoided these incongruous inventories? Its impossible to predict the weather or even the reactions of your customers. Instead, its necessary to plan thoroughly and methodically and to establish healthy, trusting and clear relationships with your manufacturers.
Many small businesses find success in scheduling several smaller orders over the course of a season, rather than a few large orders. By spacing those shipments out over the course of several months, these retailers allow themselves time and leeway to reconfigure future shipments. If, for example, they notice theyre having an increasingly mild winter through November, they have the opportunity to adjust their order for December. Such retailers account for the possibility of unpredictabilitieslike weather or trendsso they can adjust their future, smaller orders, rather than simply regretting those bigger orders from the past. Plus, with smaller orders, you always have the opportunity to order more later.
Cultivating a great relationship with your manufacturers is also an integral piece of wise inventory planning. Put all of your shipments on hold; ask your manufacturers to only send your orders after theyve been reapproved after considering current market conditions. Scheduling those smaller shipments across the season allows you the opportunity to cancel or completely adjust the order. Shipments aren’t released unless theyre approved. And if those shipments do arrive, make sure your staff has a list of orders onhand to reject. If you cultivate that trusting relationship with your manufacturers, theyll understand your adjustments to your orders.
Its also important to cater to your market as a small, specialty retailer. Its easy to understand the bigger, traditional trends and brands and to stock thembut that means its also easy for big box chains to do the same. Big retailers like REI, Dicks and Gander Mountain are seeping into more and more towns; if you carry the same inventory as those massive stores, your customers may likely choose the larger, more convenient option with a bigger selection. Instead, plan your inventory against those competitors. Set yourself apart as a purveyor of local goods and niche brands, rather than a follower of bigger trends like big competitors. Youre a small, local store that should support other local businesses; its an intentional move that will set you apart and impress your customers. If theyre at your store, theyre looking for a unique experience. By providing it, your inventory will be almost inherently more successful.
Another crucial piece of the inventory planning puzzle is, in fact, to let go of inventory. Its easy to get attached to your inventory; if you couldnt cancel or adjust those shipments, maybe you feel like you should commit to that order. Or perhaps you feel that its simply unprofitable to turn over inventory thats not moving. But by embracing markdowns, youll generate traffic and bring more customers into your store. Youll establish a new customer base who can come in later to spend more on that fresh, wellcultivated inventory youve been working on.

Inventory planning is intrinsically erratic and fickle; unpredictability is simply part of the industry. But by intentionally reworking your patterns of ordering and inventory planning, you can at least manage that unpredictability and plan for it. So when the next snowmaggedon strikes, youll be ready.

Comments (2)

This was a great article. Thanks for the tips.

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