Seasonal inventory management: an online business’s guide

Seasonal inventory management for small online businesses

Brush up on your seasonal inventory management skills and learn our top tips and tricks to maximise your sales and minimise your left-over stock at the end of the season.


Making the most of seasonal sales means being well-prepared as demand swells just in time for holidays and cultural traditions. As if meeting this operational challenge wasn’t enough, seasonal periods also come with the risk of over-ordering, leaving you with working capital tied up in last season’s stock that suddenly no one wants.

Minimise capital risks to your business with an effective seasonal inventory management solution and learn our top tips and tricks to meet your stock needs in time for your sales period. We’ll answer some of the key questions surrounding seasonal inventory management so you can achieve your revenue targets and delve into how you can ease other parts of your business like currency transfers below.

  • Which product categories are seasonal?
  • Tips and tricks to perfect your seasonal inventory management
  • How to extend your seasonal trading to the whole year

Which product categories are seasonal?

Is your business at risk of seasonal flux? Seasonal products typically refer to weather-dependent and cultural goods, like Christmas jumpers, summer shorts or Halloween decorations. Each has a specific time of the year where they’re relevant.

Yet, ‘seasonal’ can also apply to any product category that sees regular spikes each year. For example, the demand for stationery, consumer electronics and software spikes around August as universities and colleges resume their semesters and armies of students need upgrades in time for lectures.

To meet demand, businesses need seasonal inventory management solutions that help them handle these evolving trends. They have to track how consumer tastes shift across the year, what the best level of stock is at any one time and when to reorder in time for the shifting demand.

In addition, businesses still need to find the right products within seasonal trends to make a profit. For example, specific SKUs with floral patterns might be more popular than ones with neon colours, even though they’re both within the seasonal swimwear product category.

Tips and tricks to perfect your seasonal inventory management

Use seasonal inventory management software

As much as we don’t like to admit it, sometimes computers are better at performing certain tasks than humans. A sophisticated software solution can help you manage your seasonal inventory needs. There are lots of options available on the market, some of which integrate with websites and back-ends better than others. It’s important to research a solution that will fit in with your existing inventory architecture and budget.

In general, you should look for a system that is capable of as much of the following as possible:

  • Real-time integration with your CMS or e-commerce platform
  • Automated par inventory calculations
  • Automated reorders of depleted stock
  • Integration with customer returns
  • KPI reporting
  • Operational and supply chain overviews

Unfortunately, like any other computerised system, inventory management software performance is only as good as the data you feed into it. If you’re new to business and haven’t yet built up a bank of consumer habits to inform your inventory management software well enough, you’ll need to rely on other means to inform your inventory orders in the meantime.

Market research and gut instinct

If you trade in a particular niche and are confident that a certain product category will be trending soon, sometimes it’s okay to trust your entrepreneurial intuition. This can pay off if you’re paying attention to the right sources. For example, interest in fidget spinner toys spiked practically overnight in early-mid 2017 and revenues quickly grew to nearly 20% of all toy sales in just an eight-week period.

Though gut instinct isn’t always reliable, you can still use seasonal inventory management software to calculate stock levels. In time, its algorithm should become familiar with your target market’s behaviours and start automating other elements of your operations — like reorders — to ensure you don’t miss sales.

Research weather forecasts

Some goods, like clothing and food, are acutely responsive to weather; as a result, sales can be impacted by a freak storm or sunny spell. Due to the effects of climate change, extreme weather events are becoming more frequent and intense. As small businesses venture into the future, this places considerable pressure on their viability as many are financially vulnerable to small fluctuations in the market.

Best case scenario, you risk dumping capital in stock that may not sell for weeks. Worst case, the seasonal blip lasts, and you miss your trading window entirely while consumers move on to the next seasonal trend of the year.

Inventory best practices: FIFO or LIFO?

Wholesalers and e-commerce businesses are evenly split in regards to the stock management power of FIFO (first in, first out) versus LIFO (last in, first out) principles. The FIFO method specifies that the earliest arriving (or oldest) stock should be sold first, ensuring freshness for goods that need it. In contrast, the LIFO method stresses that the most recently arriving (or youngest) stock should be sold first, providing a more stable inventory capacity. This industry divide more or less follows the shelf life of products, with goods like food and some chemical products needing to be turned over quickly with FIFO systems.

If your goods have a longer (or theoretically infinite) shelf life, it may be worth using FIFO regardless. This is because you may be able to return your latest order of goods to minimise your stock overhang into the next season, helping you regain crucial capital reserves. If you were to follow LIFO principles, this opportunity could be missed; your success will rely heavily on your supplier contracts.

How to extend your seasonal trading to the whole year

Would you like to sell all year and avoid the pressures of seasonal inventory management?

Foreign markets with opposing seasons and slightly different windows for cultural events can help small businesses lessen the intensity of seasonal trading and build a more robust revenue stream. If you’re considering expanding into neighbouring markets (or even those further abroad), you’ll need an experienced and trustworthy currency transfer provider like WorldFirst.

With WorldFirst, your small businesses can open up to 10 international currency accounts for free.

Don’t miss seasonal growth opportunities in new markets: increase your revenue and eliminate stock overhangs. Get started with WorldFirst today by chatting to us online or calling 0207 801 1065.

Niki Sehmbi
Senior Content Specialist | 8 years' experience in content marketing within the tech and finance space.

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