Sadie Keljikian, Express Trade Capital
If you’re relatively new to the wholesale business, you may find it difficult to navigate peak seasons for wholesale orders. Without ample experience, preparing for these times of year can be a bit of a scramble, but here are a few tips to help you prepare for the busy seasons:
- Know when your busy seasons are.
This will depend on your industry, as peak demand for different kinds of products varies. There is no hard and fast rule for this, but generally speaking, the following timelines apply:
Apparel orders generally peak between December and January and then between July and August. Footwear and accessory items peak between late December and early February, then again between late July and early September. Hardgoods tend to peak in late January and early March, then again in August-September.
- Manage your timeline.
To take full advantage of busy seasons successfully, make sure that you have time to fulfill the orders you receive. You can even implement a deadline for your customers to place their orders with you during the busiest times of year (I.E. holidays, back to school, etc.). Generally speaking, your customers will prefer to submit their orders early anyway, but a deadline will ensure that you don’t end up struggling to keep up with last-minute orders.
- Favor big orders.
During less busy seasons, fulfilling small orders from your retail customers isn’t a problem since orders are generally staggered, which keeps you from becoming overwhelmed. During peak seasons, however, you may want to set a (reasonable) purchase order minimum, either in cost or in number of units. This will distill your orders to the ones that are most worthwhile and discourage your customers from ordering piecemeal, which can throw a wrench in your production schedule.
- Assess production costs and plan accordingly.
One of the primary challenges any wholesaler faces is managing the cost of fulfilling orders, particularly when retail customers usually prefer to pay on open terms. If you can manage your operational costs such that you are prepared to spend more that usual on production, you’re in great shape. If not, you may want to consider seeking out financing your purchase orders, receivables, or both. These services are generally inexpensive and will allow you to fulfill larger orders than you could otherwise afford.
- Ship with care.
If you aren’t experienced in managing your own logistics, you may want to seek out a professional, particularly if your production takes place overseas. Any wholesaler who’s experienced subpar logistical management will tell you that a lot can go wrong when your goods are being transported. If you haven’t developed a solid relationship with your factory yet, it may also help to use a letter of credit in place of a deposit when you place orders with them. The letter of credit will protect you from losing your deposit and ensure that your goods arrive on time and as expected.
- Be ambitious, but reasonable.
Provided that you prepare scrupulously, there is no reason not to be a bit ambitious in planning for your peak seasons, but be mindful of overextending yourself and your resources. Dreaming big and taking risks is part of the territory for an entrepreneur, but be sure that you do the math and make sure you don’t find yourself stuck without the means to complete your orders.
Click to learn how our purchase order financing program can help you fulfill big orders and grow your business.
Contact us for more information.