The holiday season is a huge time for retailers, but it also presents a lot of challenges. One of the biggest obstacles is how to make sure your sales are profitable. Here’s how you can ensure you’re making money from your holiday sales.
The how to increase sales during holidays is a question that people often ask. There are many ways to increase sales during the holiday season, but it’s important for business owners to make sure they’re profitable.
Down to Business is a weekly small business advice piece that was first published online by the Oregon Small Business Development Center Network and is reprinted here with permission.
Q: How can I ensure that my Christmas sales season is successful?
Many retailers depend on one season of the year—the Christmas season—to meet their financial requirements throughout the year. However, getting caught up in the Christmas shopping frenzy may do more damage than good. Unsold goods, too few consumers, unfavorable pricing, shoplifting, staff theft, faulty checks, and so forth abound at this time of year. If you’re having cash flow issues, one or more of these Christmas season “Grinches” may be to blame. Fortunately, it can all be avoided with little forethought:
Unsold inventory may occur as a consequence of overbuying or failing to stock the appropriate products. If inventory does not flip (sell) on a regular basis, cash has been spent on the acquisition but no cash inflow has occurred.
One option for resolving overstocking issues is to ask consumers what they want. Study industry trends, then purchase based on what is most likely to sell in your market, not on the price discount you may receive for purchasing in bulk. Even if the total worth of goods on hand is decreased, creative use of shelf space may make a shop seem full.
Customers prefer to buy at retail outlets because of the value they find in the goods, the excellent customer service they get, or the location’s convenience. Customers may find a better variety outside of town or online, thus small town businesses must compete. “I carry that product at the same price, so why did my client travel out of town?” is a frequent complaint. Only by asking consumers why they buy where they do and acting on the information they give can you answer that question. What additional goods or services might entice them to visit their local shop and make a purchase? What do they think they receive for their money elsewhere?
Unprofitable pricing may result from a lack of knowledge about all of your company’s expenses. It’s easy to get caught up in lowering prices in the hopes of luring more consumers over the Christmas season, but the statistics don’t always match up. To pay all of your operational expenses, how many sales must be produced each day or week? Financial accounts should be reviewed at least once a quarter, and accountants may assist in determining if goods are priced profitably.
Shoplifting is a nationwide issue that adds an average of $150 to each American citizen’s annual goods prices. In this nation, it is believed that a theft occurs every five seconds. Shoplifters come in all ages, ethnicities, and socioeconomic backgrounds. Fortunately for businesses, the majority of shoplifters are inexperienced and easily identifiable.
Even little theft losses are unaffordable to small-town businesses. To recoup the daily loss of a ten-cent item, a shop with a 3% profit margin would have to sell an extra $1,200 worth of goods each year.
Deterrence is the greatest protection against shoplifting losses. Employees should be taught how to detect shoplifters (workshops are often available through business groups and community colleges). Consider deterrent while designing the store’s layout.
Because an employee is someone you trust to help your company generate sales and profits, employee theft may be much more damaging than stealing. Good recruiting procedures are the greatest protection against employee theft. Before charging someone of stealing and dismissing them, consult with an attorney to ensure you understand the legal concerns of employment termination.
When the economy is tight, faulty checks become more frequent, and recovering losses from bad checks is costly. Financial organizations and collection agencies often have systems in place to collect faulty checks. The legislation gives company owners with options for redress. Contacting your banker for information on the programs they provide is an excellent place to start.
All companies encounter difficulties that may be vexing at best and disastrous at worst. Planning ahead of time, reviewing financial data, and collaborating with other companies may all help you address issues before they destroy your company. Don’t let the “Grinch” take your company; make advantage of all the options available to you.
Arlene Soto may be reached at [email protected] if you have a small business question.
The holiday shopping messaging is a great way to make sure your holiday sales season is profitable. You can use it to send personalized messages to customers about the deals you are offering during the holidays.
Frequently Asked Questions
How can I increase sales during holiday season?
There are a few things you can do to increase your sales during the holiday season, such as giving out bonuses and discounts to customers.
How do I prepare for holiday sales?
This is a difficult question to answer. Some people like to wait until the last minute, while others like to prepare early. It really depends on your personality and how much time you have.
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