Did you know that holiday retail sales were $929.5 billion in 2023? From Black Friday deals to Christmas shopping, October through December is a big deal for inventory-based businesses. Running out of inventory can result in lost sales, damage to your company’s reputation, and unhappy customers, all of which impact the long-term success of your organization.
With Q4 knocking on the door, now is the time to think about your business’ inventory needs, even if you don’t have the cash on hand to place an order. In this article, we’ll cover the steps you need to take to capitalize for Q4, including solutions if you don’t have the necessary financial resources to fund an inventory order.
Revisit Prior Year Data
Before you panic and place an inventory deposits, it’s important to revisit last year’s seasonal data. What products were hot commodities and why? Which SKUs didn’t perform well and why? Evaluating this information gives you a general idea of the items you want in your upcoming Q4 inventory order.
In addition, it’s important to review current year data. Which products have been selling well so far in 2024? Did you have any new releases? What products are you predicting to sell well in Q4? Consumer demand can shift between last year and this year, making it important to understand which inventory items you need on hand going into the holiday season.
Plan Products and Promotions
Next, finalize your products and any promotions. If you are running a promotion for a specific product, you may need to order extra inventory to account for higher demand. Make a list of the products you will be offering and any relating promotions. Using your data from the last step can be beneficial to finalize your selections.
Source Inventory
Now, it’s time to source your inventory. You don’t need to work with the same supplier as the prior order. In fact, it might be more cost-effective to reach out and solidify a relationship with a new supplier. Get quotes from numerous vendors to determine the best one for your Q4 needs. Make sure to request samples and/or mandate third-party testing to ensure quality control. We recommend UL Solutions for consumer product testing. Also inquire about the estimated shipping time and the term of sale (down payment percentage, payment dates, etc.). Odds are your supplier will need a substantial deposit from you within the next few weeks.
Secure Financing
Once you have a tentative purchase price and supplier terms, you should look at your finances and assess your liquidity needs. Do you have enough cash on hand to cover the inventory order without placing yourself in a tough financial position? If not, it’s time to look for financing. Do you have a line of credit you can draw on to cover the purchase? If you have no current financing options, start by completing Capital Source’s online application. Upon completion of the online application, a Capital Source representative will reach out and discuss its inventory financing solutions. Whether your business needs an inventory line of credit, purchase order financing facility or merely a small working capital loan, Capital Source will put its best foot forward to align with your business’ growth objectives.
Getting Started
Planning ahead for your Q4 inventory is important to avoid business disruptions and maximize your sales. Even if you are low on cash, you have inventory financing options with Capital Source Group. We help business owners get the capital they need to fund their Q4 sales goals. Reach out today to schedule your free consultation here and learn about your inventory financing options.