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Ramping for Christmas

A few weeks ago I posted about summer slowdown – sales dropping off as many people go on summer vacation.  Despite the slowdown (and by now your sales are probably picking up again), it’s time to start ramping inventory up for Christmas.  Actually it’s past time, I normally start around the beginning of July.

If you’re just starting out selling online, it can be nerve wracking to ramp up inventory purchases for Christmas when your sales are slowing down for summer.  And until you’ve been through a couple of Christmas’ and know what sells well at Christmas and what doesn’t, you may want to go easy on the extra inventory.  You don’t want to end up with a lot of your capital tied up in slow moving inventory.

But if you’ve been aggressively selling online for a couple of years, you should be ramping your inventory up for Christmas by now.  My sales normally take off right after Halloween, so there are about three months left to have inventory in place.

Of course, you want to allocate your capital where it will do you the most good.  So you want to identify your best and most profitable sellers and increase your inventory of those.  I normally focus on about a quarter to a third of the items I carry, and the rest I don’t increase inventory levels.  This is also a time to be especially careful with your cash management – you don’t want to end up with huge bills for your extra inventory, and no way to pay for them.  You also don’t want to end up with no way to pay your salary.

Despite the extra time and expense of building inventory for Christmas, you need to keep being aggressive about product sourcing – finding new products to sell.  This will set you up for next year, so that your sales will keep on growing.  I mentioned in an earlier post about having to continually add new items to sell just to keep your sales from dropping, as older products drop in sales volume.  You can’t afford to take four or more months off from expanding your product line because you’re busy getting ready for Christmas, it will affect you next year.

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