In 2023, global Black Friday sales hit $298 billion, up 6% year over year. These seasonal demand peaks are a welcome bump to a brand’s bottom line, but they also add a great deal of pressure, so it’s essential to be prepared.

When sales peak, it’s critical to have your inventory in good standing, your fulfillment practices ironed out, and your shipping strategies in place so that your operations continue to run smoothly. 

Dive in below for some strategies that you and your Third-Party Logistics (3PL) provider can work with to smoothly handle inventory changes during peak season.

The Significance of Proper Inventory Management during Seasonal Peaks

Poor inventory management during seasonal peaks can lead to stockouts, overstocking, and ultimately, dissatisfied shoppers. Effective inventory management, on the other hand, ensures that brands can meet shopper demand without overburdening their storage capacities or cash flow. Proper management helps in optimizing stock levels, reducing holding costs, and enhancing customer satisfaction.

Strategies to Manage Inventory Fluctuations

In order to master the fine balance of inventory management, there are several strategies that you and your 3PL provider can work on to effectively manage inventory fluctuations. 

These strategies leverage advanced technology and data-driven approaches to ensure that your 3PL is ready for the influx in orders, your inventory levels align with demand, and transit times are minimized. 

Let’s dig in so you can navigate the complexities of peak seasons with greater efficiency.

Managing inventory during seasonal peaks: Advanced Planning & Demand Forecasting

Analyzing historical data and market trends can help anticipate demand shifts and predict future volumes. Additionally, it’s important to work closely with suppliers to ensure you can meet your demand spikes. Accurate demand forecasting using data analytics and machine learning models, such as ARIMA, can predict future demand and help in making informed inventory decisions.

Managing inventory during seasonal peaks: Technology and Automation

Navigating peak season might be a little chaotic without an Order Management Systems (OMS) to streamline your order processing, and a Warehouse Management Systems (WMS) to optimize inventory management and warehouse operations. If you don’t have these in place yet, a modern 3PL with a focus on technology would be the best place to get started.

Managing inventory during seasonal peaks: Order Orchestration

Leveraging order orchestration technology, a proprietary fulfillment system developed by GoBolt, helps in placing inventory closer to customers, reducing transit times, and improving delivery speed.

Jarrett Stewart, SVP Commercial at GoBolt, explains, "Using GoBolt's order orchestration technology during peak allows brands to cut down on transit times by placing their inventory closer to where the bulk of their customers are. So when fulfillment SLAs are extended during peak season, your transit times are shortened, allowing the time between order and delivery to be minimally impacted.”

Managing inventory during seasonal peaks: Diverse Carrier Options

Utilizing a larger pool of carriers allows brands to choose the best balance between cost and speed, especially during peak periods. Partnering with multiple carriers also helps to prevent bottlenecks.

Don’t know yet if you’re ready to get started with a diversified carrier model? Get answers with the Diversified Carrier Checklist. Plus get access to a list of the top 10 alternate last mile carriers.

Managing inventory during seasonal peaks: Inventory Management

Maintaining stock levels to cover unexpected demand is a critical part of inventory management, especially leading into any peak sales seasons. Utilizing real-time inventory tracking can help you keep a keen eye on your inventory so you can avoid stockouts and overstocking.

Managing inventory during seasonal peaks: Efficient Fulfillment Processes

Custom fulfillment services, like custom boxes, packaging or kitting, can help elevate your brand, but they can also take up extra time in the fulfillment process. To speed this up, look into Batch Processing, where similar orders are grouped together to streamline the picking and packing process, or keeping commonly purchased items together. And if you’re utilizing kitting, ask your 3PL provider about pre-assembly so you can speed up fulfillment time. 

Managing inventory during seasonal peaks: Funding for Inventory Purchases

Of course, one of the more critical first steps to getting ready for a seasonal peak or sales event is to secure sufficient funding for inventory purchases before peak season. To ensure you have the necessary capital to invest in inventory without compromising your financial stability, here are a few best practices to keep in mind: 

1. Understand Financial Health: Assess your brand’s financial health to determine how much you can invest in inventory without risking profitability.
2. Leverage Non-Dilutive Capital: Utilize non-dilutive capital options like those offered by Clearco to fund inventory purchases without taking on debt.
3. Build Strong Supplier Relationships: Establish good relationships with suppliers to negotiate better terms and ensure timely shipments.

Getting the right funding for inventory purchases during peak seasons is vital for keeping operations smooth and customers happy. 

Invoice Funding solutions, such as Clearco, allows brands to scale their inventory needs to meet consumer demand. As an added bonus, Clearco can pay supplier invoices directly. Through this, they have the ability to support the ecommerce brand in building and maintaining good relationships with their vendors by paying on time.

“The primary benefits of using Clearco for funding inventory are the weekly capped payments so the payment is predictable for brands. As well, by funding inventory, marketing, shipping/logistics, and other items that don't see a 'return' until product is in-hand, we free up cash flow for payroll, equipment, retail shops, or other needs.”

Manage inventory fluctuations with ease for peak shopping season 

Managing inventory fluctuations, sourcing your ecommerce 3PL partner, and securing adequate funding before seasonal peaks is crucial for success. By leveraging advanced technology and best practices, brands can optimize their inventory levels, maintain smooth operations, and meet shopper demand.