It's currently summer, so most people are thinking about attending barbecues and buying fireworks — not planning for the holiday shopping season. However, if you run a brick-and-mortar store or e-commerce business, now is the best time to start thinking about holiday inventory.

Successful planning in June and July will set you up for gains in November, December and January. Here are six ways you can successfully plan for long-term inventory demand growth the holiday season.

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1. Come up with a deadline

The holiday season is the most profitable sales period for most retailers. According to the National Retail Federation (NRF), holiday sales have exceeded expectations 964 billion dollars in 2023, an increase of 3.8% from last year.

So start by creating a timeline of key dates when you can predict sales and demand to increase. These dates most likely include:

Think about the shipping cutoff dates for each of these holidays and add them to your calendar. This way, you can notify customers in the last few days to receive standard and expedited shipping on their orders.

2. Determine what you will need

Next, you will predict the types and inventory quantity you need it for the holiday season. Having enough inventory on hand to meet customer demand will ensure you don't lose business to competitors. It will also help you avoid overloading yourself with items you don't need.

The best way to estimate holiday demand is by looking at past sales data and considering customer buying patterns. Of course, shopping habits can change a bit from year to year, so you also want to look at industry trends. For example, you can see what your competitors are doing and how they are preparing for the holidays. And if you have one NRF membershipyou will gain insight into consumer and retail trends.

Once you've done adequate research, you can start planning your holiday inventory. You can also start thinking about when you should start marketing and how many staff you will need to have on hand to manage the increased demand.

3. Do an inventory audit

An inventory audit involves regularly reviewing your inventory for accuracy. During an inventory audit, you will verify that your physical inventory matches what you recorded in your financial records. An inventory audit can also help you spot your inefficiencies supply chain.

To perform an inventory audit, you'll start by organizing your inventory to reduce the likelihood of miscounting items. From there, you will begin to physically count and record each item in your inventory management software.

Once the audit is complete, you will reconcile the count with your inventory data. If there are any discrepancies, you can investigate where they came from. You can also begin to develop a plan to reduce future inconsistencies.

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4. Check with your suppliers

Once you know how much inventory you'll need to meet holiday demand, you should start contacting your suppliers. Checking with your suppliers early will ensure you're on the same page and won't be caught off guard by changes in order schedules or prices.

It's also a good idea to ask if any of your suppliers offer pre-sale discounts or promotional prices. It never hurts to ask, and some may be willing to give you a discount for large orders.

5. Think about financing

As you start planning for your holiday inventory, one of the biggest issues is how you're going to pay for everything. Many small businesses don't have the cash flow to pay for a large order of inventory, shipping supplies, and the unexpected costs that come along with it.

If you find yourself in this place, FInanCInG may be a good solution. Inventory financing is a one-time loan or an ongoing line of credit that you can use to purchase inventory for your business. Purchased inventory is used as collateral for the loan.

Financing can help you stay afloat cash flow during seasonal fluctuations in your business. It will also give you the flexibility to respond to increased customer demand. If you're interested in exploring your financing options, you should start looking into this now so you're well prepared in the fall.

6. Place your orders early

Many customers begin their holiday shopping in September and October out of concern about product shortages and slow shipping times. So you want to place your inventory orders as soon as possible so you can catch those early buyers.

However, it's impossible to predict exactly how much inventory you'll need and run out of items. So you also want to have a plan for how you can quickly replenish out-of-stock items. For example, a good inventory management system will alert you when you run out of certain items and need to re-order.

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