The lead-up to the busy December trading period got off to a strong start with November showing the biggest increase in rolling 12-month sales data since October 2015.
Rolling 12-month sales of $1,614,820 are up 0.79 percent on the previous month’s figure of $1,602,166 as a result of a stronger performance for November compared to last year. The monthly results are detailed below:
As the monthly comparisons show, sales for November were up $12,654 on last year to $148,711, which represented a monthly increase of over 9 percent. This has continued the trend of the last two years, with this year’s figure representing an increase of almost 13 percent on November 2015. Gross profit is up from $61,093 in 2015 to $66,836 this year, a rise of 9.4 percent. These figures reflect the overall recent trend of fewer items being sold at a higher price and lower margin.
The improvement in sales figures has resulted in a growing confidence to invest in inventory again. As the graph below shows, inventory levels had begun to decline slightly from the highs of late 2015 but the downtrend seems to have reversed. November represents the highest level of inventory held since our records began in 2008.
Average inventory levels per store are sitting at an average holding of just over $1.5 million, with data for stores doing under $1 million in sales per year at around $675,000 while those doing over $1 million have an average inventory holding of almost $2.4 million.
How much product are you carrying as the busy holiday period rolls around? Now is the time to have a wide selection, but most importantly, it’s the best time to have the right product. With a small percentage of your items delivering most of your sales revenue, you need to ensure that you have identified your strong sellers and that you are carrying spares of anything you need that can’t be reordered at this busy time of year.
Have you checked your suppliers cut-off times for when you can get inventory from them? Do you have substitutes in place that your staff can go to in the event you can’t replace an item? This is critical at this time of year, especially if you run out of promotional pieces. Now is a good time to consider what alternatives you can show at a similar price point.
What about upsells? Your best product can bring customers in, but do you have a higher-priced alternative you can go to? What features and benefits does the higher-priced item provide? Are your staff members trained in the opportunity that this product can provide? Customers are open to suggestions, and it’s your staff’s job to suggest.
Now also represents a great time to move aged inventory. It’s the perfect time to identify those pieces that are tying up cash and make a decision on what you will do with them. Should they be discounted with a view to generating cash flow? Can they be used as loss leaders or “bait” to steer customers toward more profitable pieces you may want to sell? Even slow-selling or ugly items can help earn their keep by making other items seem like more attractive alternatives.
This time of year is the most critical for both your sales and your inventory management. It’s important in December to have the right product mix and a plan of action for how you want your inventory levels to look by the time January rolls around. You only get this opportunity once a year, so make the most of it!