It’s never too early for retailers to start planning for the holiday season. Those times are already stressful considering they’ve got to figure out the inventory to hold and buy, how to price and preparations for dealing with global transactions, among other things. Without an early and effective plan, retailers could lose opportunities for higher revenue.
Here’s a safe bet: holiday sales will be huge. More than 154 million consumers shopped in store and online just for the last Black Friday — that’s three million more than the previous year. Moreover, holiday retail sales between November and December increased 4 percent over 2015 to reach $658.3 billion, according to the National Retail Federation. So why not prepare to make the experience as efficient and productive as possible?
For instance, retailers can get going by looking at distribution channels, auditing the markets they’re in or vetting vendors for best services and prices — all to ensure they’re getting the greatest returns. Here’s how and why businesses should prepare a global strategy this summer in preparation for the holidays.
Get a jump on the holidays.
Preparing for the biggest time of the year is not new for retailers. But a trap that’s easy to fall into is repeating past practices. What you did last year may not work as smoothly or provide the same payout this year. That’s why retailers should always be questioning their methods and processes.
For starters, they need to assess what’s sold well so far this year. They should begin by examining their current product line and then broaden their sights to compare across marketplace platforms from Alibaba to Amazon. (Services such as Jungle Scout work well for this.) This helps them understand buying trends which can be of service to marketing and sales plans.
If there is a sure play for global sales, businesses should set up in all the countries from which they can profit. If they don’t, it’s time to think about making that push. In our recent Global Small Business Survey, nearly two thirds (63 percent) of small businesses reported good to booming growth internationally. Expanding into new global markets can be extremely lucrative, as more and more businesses have discovered.
The same goes for examining and expanding online marketplaces. Are your products selling on Amazon and eBay but not Wish.com or Tophatter.com? This information might uncover new and alternate opportunities for a given product line. Services such as Algopix can quickly help retailers understand effective pricing strategies profitability of selling overseas and on other online platforms by tracing SKUs and seeing what the products sell for in different markets.
International sales also require an awareness for how sales taxes will be calculated and the procedure for tax payment in each separate country or state. Filing deadlines can run up on retailers quickly after the holiday season, and it pays to be prepared in advance. This may seem like a lot of heavy lifting, but it’s really a matter of due diligence.
No one said it would be easy.
Retailers face challenges year-round, but they can be acute during this time of the year. For example, knowing how much stock to hold and buy to stay ahead of demand can be difficult. But all problems have a fix. Cutting prices or increasing advertising spend on lower performing items can clear out unwanted stock. Getting paid as fast as possible is also critical so organizations can turn lower levels of stock inventory as quickly as possible.
Also, retailers must ensure the business’s best processes are in place for receiving sale proceeds at the lowest cost possible. When selling overseas, a money exchange specialist (like OFX or another) can help businesses collect revenues in the country where they’re selling, all while saving two percent or more on the exchange rate. It makes a huge difference to annual revenue, especially at the busiest time of the year.
Tying it all together.
Ultimately, businesses should be very selective on product lines and stock levels. Being stuck with unsold items in a Fulfilment by Amazon (FBA) warehouse can be very expensive. Moreover, organizations should run costs incurred for essential services, such as shipping, packaging, marketplaces fees, taxes and payments.
It’s all about optimizing distribution channels in the right markets for the best prices. There are always efficiency gains to be made, even in the payment collection processes. Organizations can forego early preparation and risk losing out on the higher returns that can be gained by starting a little early. What are you doing now to get ready?