Inventory Shortfalls

How to Address Inventory Shortfalls Leading into The Holiday Season

Even in the best of times, inventory management can be challenging. How do you decide what to order or how much to order? How do you manage your inventory? And all while running your other retail businesses and keeping your consumers happy?

The task becomes considerably more difficult during the holiday season. Retailers sometimes struggle to keep up with rising yet unforeseen demand. So, what should businesses do to ensure they have enough inventory for the busiest shopping season of the year? They must maintain comprehensive oversight over their holiday inventory at all times, including before, during, and after the holiday season.

Potential Inventory Challenges in Holiday Seasons

Let’s begin by identifying potential inventory issues that may develop around the holidays. Here are the most common problems:

Stock availability

It’s conceivable that a product is out of stock. Many buyers hurry to make purchases during the holiday season, causing a lack of supplies. If stockouts occur regularly, they can cause client discontent and put the firm in danger of losing customers.

Unreliable inventories

During a hectic period, such as the holiday season, eCommerce SMBs without precise and real-time insight over their inventory may encounter overstocking concerns or item delays in shipping, resulting in a tense scenario. Having to deal with all of those issues might be stressful.

Related: How Supply Chain Management Impacts Profitability in eCommerce

How to Get Your Inventory Right This Holiday Season

With holiday season eCommerce sales expected to reach new highs, you should have already begun planning for the season. However, when you connect this increase in sales with the present supply chain challenges that so many retailers are experiencing, it’s evident that having a firm grip on your holiday inventory will be critical if you want to capitalize on holiday sales this year. While there are various things you must do to prepare for holiday inventory, you must also guarantee that you have the cash flow available to acquire the stock needed to satisfy demand. Follow these ideas to perfect your inventory game if you want to have a much less stressful holiday period.

Keep Track of Your Calendar

The first principle for managing holiday inventory is to avoid letting the season get away from you. Yes, inventory management is a hectic job, but failing to adequately prepare for the holidays because you were too preoccupied with other things is nearly criminal in your area of business.

Use calendar reminders to plan ahead of time, and keep team members updated regularly. Focus on Thanksgiving through Christmas Day; this will be the most challenging and rewarding time. Use deadlines to ensure order delivery and prevent disappointed consumers.

Secure Your Orders in Advance

Once you’ve estimated how much stock you’ll need, we recommend placing your purchase as soon as possible before the holiday season.

First, consumers begin their holiday shopping sooner than ever, starting as early as November, so you must be ready for them when they arrive. Second, purchasing ahead of time ensures that the merchandise you want is accessible when you need it. Remember that your rivals will also purchase from the same vendors, and on-trend products, in particular, will be in great demand. So, order ahead of the pack to prevent losing out on hot products.

Leverage Strategies to Improve Forecast Demand

Don’t rely on guesswork to determine your inventory levels. You don’t want excess inventory taking up precious back room or warehouse space, but you also don’t want to upset consumers by running out of items too soon. Forecasting can help you get a good idea of demand.

Examine your past data if you’ve been in the company for at least a few years. How were sales last year? Did you run out of stock? When did sales begin to pick up speed? How long did they last? Answers to such questions could assist you in calculating your inventory requirements. To predict demand, don’t only look at your previous and present month’s sales. Demand forecasting can be difficult. Consumer tastes and market trends are constantly evolving. However, certain broad tendencies may be seen. Identifying what will be successful, how much inventory you would need, and outlining your sales targets are critical to success over the holiday season.

Talk to Your Supply Chain Partners Early

The suppliers and manufacturers you work with are your supply chain partners. You must collaborate to succeed, so take the time to create a procedure and order volume that benefits everyone. Engage your suppliers as early as possible to resolve potential supply chain concerns. The earlier you begin, the better you can predict and avoid difficulties. So get started immediately!

Regarding inventory order volume, be explicit and notify suppliers of how much you intend to have. If they identify holiday supply issues, adapt your product variety or diversity appropriately. Maintain constant contact with them to be informed of any changes. Effective and regular communication is essential in all interactions. Because fulfillment can easily be delayed over the holiday season, try establishing a higher threshold for reorder alerts to allow yourself more time to refill. In this manner, you may continue to offer your best-selling goods without seeing a drop in sales.

Strategically Price Your Products

Once you’ve determined your inventory volume, adjusting your product pricing can help you keep your stock levels under control. Simply said, cutting the cost of well-stocked items allows you to sell more of them. Meanwhile, boosting the pricing of unpopular products will result in fewer sales. As usual, pricing is about finding the perfect balance in the middle ground that will allow you to reach your inventory targets while preserving your positive brand image. Consistent pricing is a solid rule of thumb. Making your things too pricey or too inexpensive would only confuse your buyers.

Pricing for goods is the same throughout the holiday shopping season as during the rest of the year. You should still follow your rivals’ lead and undercut their pricing to remain competitive. Increase your rates if you want to market yourself as a more luxurious brand. Conduct a cost-benefit analysis to determine the most helpful options for your organization. While lower pricing might help you move more goods, higher prices provide a more considerable profit margin and keep you from running out of stock too fast.

Utilize Inventory Management Software

Use your inventory management software to monitor your supply levels over the holiday season. Inventory management and control software will assist you in tracking comprehensive statistics and running a more structured business. You can manage your company operations effortlessly and avoid stockouts or over-ordering problems.

Even on the busy days of the holiday season, such as Black Friday, Cyber Monday, or Christmas Day, your inventory management software can check your inventory counts. Tracking your inventory flow might help optimize your inventory for the following holiday season!

Conduct Inventory Audits

Prevent inventory disasters by auditing your inventory regularly. An inventory audit compares your financial records to your inventory counts to ensure they match. If you fail to audit your inventory, you may sell items you no longer have. Keep track of your inventory levels by doing product counts or cutoff analysis (pausing operations temporarily to ensure accurate counts). Keep track of what’s current and what’s not when you’re evaluating your stock. What has been on the shelf the longest? What about the quickest? What needs to be taken away to create room for new products?

Related: What is eCommerce Inventory Management?

Inventory Financing Can Help with the Holiday Season

With inventory financing, you acquire capital to create a needed inventory and then pay back as it sells, allowing you to load your shelves without emptying your wallet before the holiday season.

Inventory financing can be beneficial in a variety of ways, including:

Having Enough Inventory

If a product is performing well but funds have yet to arrive, consider using inventory finance to acquire another product run. Simultaneously, sales momentum is vital in preparation for a busy selling season. You will be able to repurchase your best-selling goods and make bulk orders. Inventory financing can also support you in extending product ranges, which helps broaden sales channels.


Inventory financing may be the best option to get adequate operational capital to guarantee you have enough inventory on hand to satisfy holiday buyers’ demands. You can refund the financing quickly, but you will have the funds ready to make the necessary purchases when the time comes.

No Cost-Cutting Measures

Inventory financing eliminates the need to decrease expenditures in other operating areas to place your purchase. An inventory finance platform loan will give you the necessary upfront funding to acquire things while running your business as usual.

The Affordable Way to Finance Your Future

Inventory management is an essential component of your business. As your company develops and maybe extends into new channels, you will need a more sophisticated approach to inventory monitoring over the holiday season.

Merging inventory management with inventory funding provides retailers with the tools they need to prosper throughout the Busy holiday season. Onramp funds inventory and sales turnover with financing explicitly designed for eCommerce SMBs and their particular cash flow requirements. Apply for an inventory finance loan with Onramp Funds today to support your inventory requirements for the next season.