Blog Retail Christmas in July: Preparing for Q4 sales
02 July, 2024

Christmas in July: Preparing for Q4 sales

The holiday season: a retailer’s golden opportunity or a potential pitfall? As the year draws to an end, Q4 and the winter holidays can transform into a sales bonanza for the well-prepared merchant.

So when is the best time to prepare for holiday sales? 

Seasoned e-commerce and traditional retailers start planning for Q4 and the Christmas sales season long before summer draws to a close. By combining robust forecasting with smart inventory management well before summer’s end, these forward-thinking businesses lay the groundwork for a fourth quarter that truly sparkles.

Importance of Q4 for product sellers

Most businesses are gearing up for a Q4 sales spike from holiday sales events like Black Friday, Cyber Monday, and Small Business Saturday. 

Product sellers see soaring demand as customers purchase seasonal items and gifts for friends, family, and colleagues. Plus, customers often wait to buy high-ticket items like electronics until Q4 in the hope of a big discount.    

The Q4 spending surge acts as a financial adrenaline shot for many businesses, often determining their annual profitability. This period strategically clears inventory, optimizing stock levels before year-end tax assessments.

Financial health

Many businesses earn a significant amount of their yearly revenue during Q4’s holiday-fueled sales. 2023’s Cyber Monday saw approximately U.S. $12 billion in revenue, a U.S. record for online sales. 

A lackluster Q4 can cascade into long-term challenges, potentially resulting in annual losses that constrain future inventory investments and manufacturing opportunities.

Conversely, a robust Q4 performance sets the stage for strategic growth: it provides the financial runway to restock products, optimize your product lineup, and begin expansion initiatives.

Inventory turnover

Annual inventory stocktakes are approaching fast in Q4, and holiday sales are one of your last chances to clear merchandise before tax season.

If you’re holding excess stock that’s taking up warehouse space and holding up cash flow, Q4 is a good time to move it. One strategy to break loose slow-moving inventory is running sales promotions aimed at impulse buyers and increasing your ad spend. 

How to prepare for Q4 in July

The secret to having a successful fourth quarter? Begin planning the Q3, or maybe even earlier. 

But how do you start preparing for Christmas in July? As a product seller, your Q4 success begins with optimizing your tech stack, transforming it into a powerhouse that can handle the holiday hecticness with ease.

Save time and avoid errors by upgrading to an inventory management software that provides functionality like automation and advanced reporting.  

Inventory management can help you set the stage for Q4 success with a one-stop solution.

Look at previous sales and expenses

The retail and e-commerce landscape is always changing, but historical data can be a goldmine of insights.   

Conduct an in-depth analysis of your sales from last Q4 and further back. Identify peak buying period periods and identify buyer trends and shifting preferences.

You can pull sales reports manually, but it’s much easier to use inventory management software like Cin7 Core or Cin7 Omni. With accurate sales data, you can get the most from our integrations, like Inventoro by Cin7, which helps you cut your inventory spend while avoiding stockouts.

Perform a stock audit

Accurate inventory levels are especially important during busy sales periods like Christmas. 

Perform an inventory cycle count or a full stocktake in late Q2 or early Q3 to avoid rush fees on restocking.

You’ll get the best results from stock checks if you use the features of a top-tier inventory management solution. Cin7’s reporting tools provide real-time information on the levels and value of your inventory. 

Comparing your sales reports against current stock levels also helps identify overstocked and underselling products for SKU rationalization.

Conduct demand forecasting

Accurate demand forecasting isn’t just a nice-to-have—it’s the cornerstone of Q4 success. If you get it right, you’ll have a Goldilocks stock level — meaning no waste or unnecessary expenditures. 

With Inventoro by Cin7, you can: 

  • Access 100+ customizable reports and powerful AI tools to help with demand forecasting. 
  • Reduce inventory levels by 40% while maintaining product availability of 99% or more.

Manage your cash flow

Armed with precise demand forecasts, you’re now poised to tackle the financial aspects of preparing for Q4.

While you can boost working capital by offering discounts to B2B customers for early payment, you might need a larger cash infusion to prepare for Q4 sales. If you anticipate a cash shortage that will stop you from meeting customer demand, you can explore loans, external funding, and other options. Remember: A cash shortage during Q4 isn’t just an inconvenience—it’s a missed opportunity.

Cin7 Capital, which is currently available to Cin7 Core’s U.S. customers, provides flexible funding options like invoice financing to help bridge financing gaps in as little as two days.

Get in touch with your suppliers

A key piece of a successful Q4 strategy is early engagement with your suppliers. You may need to confirm lead times and make pre-orders. If you need seasonal goods that will only sell during Q4 (e.g., Christmas trees), they’ll need to be ordered months in advance.  

Cin7 makes it easy to plan needed lead times for every part of the supply chain and includes supplier management as part of its purchasing module.

Optimize your warehouse

As the holiday rush approaches, your warehouse becomes the beating heart of your operation. Here’s how to optimize your warehouse space: 

  • Make sure you have a good inventory management system in place. 
  • Perform an ABC analysis
  • Reorganize warehouse space to make room for new inventory.
  • Change the layout of your warehouse for easier sorting and quicker travel times.
  • Use warehouse apps and scanning devices to save time and boost accuracy.

With Cin7 Core, you’ll get a mobile app dedicated to warehouse management, helping your warehouse team work more efficiently in the space they have.

Replenish what you can

You’re not the only one stocking up for Q4. In many cases, your suppliers will be inundated with orders from well-organized, high-priority customers. If you leave replenishing until the last minute, you’ll likely miss out on peak sales. 

By Q3 at the latest, start preparing a stock reserve. If you manufacture products in-house, you might need to buy raw materials in bulk to avoid running out.  Cin7’s supply chain management and production tracking features make scheduling production easy.

Assess your staffing needs

As product demand increases, so might your staffing needs. You may need to hire additional sales floor and warehouse personnel. 

With a good inventory management approach, you may be able to minimize the need for additional staff. We’ve found that Cin7 can help warehouse staff reduce walking during picking by 40%.

Get your third-party logistics provider in sync

Early communication with your third-party logistics (3PL) provider is crucial for a smooth Q4. They’ll appreciate the early communication and help you avoid delivery delays for you and your customers. Your 3PL provider may also have their own needs to discuss with you, such as timelines for Amazon Q4 sales events and stocking deadlines.

To connect your inventory management approach with 3PL, Cin7 integrates with various 3PL providers, such as Amazon FBA (Fulfillment by Amazon), ShipBob, and Shipwire.

Prepare for after-sales services

Maintain customer satisfaction and loyalty with a good system for processing holiday season returns and exchanges. Customers may need to send back incorrect items, defective products, or unwanted gifts. 

Cin7 lets you handle multi-channel sales returns, and much more with our add-on RMA module.

Make plans to optimize your store

Preparing for the fourth quarter is a great time to revamp your product listings across all your platforms. You can also perform user experience (UX) tests to ensure your product and checkout pages are easy to navigate.

Running a brick-and-mortar store? Use your Christmas in July planning to consider how merchandising and layout can boost your Q4 revenue. For seamless in-store transactions, ensure your point of sale (POS) system is connected to your inventory management software. 

Cin7’s POS system lets you offer loyalty programs and gift cards, which are popular during the holiday season.

Increase product visibility

Start planning your festive marketing strategies, like ad campaigns, early to ensure maximum visibility. Review your website’s SEO and do keyword research to ensure product names and descriptions rank highly when potential customers use search functions. 

You can also plan a schedule for social media marketing campaigns in the run-up to Q4, but don’t launch too early.

Prepare for Christmas in July with Cin7

Finish your year with stellar sales by preparing for Q4 and the holiday season with careful planning and near-perfect inventory management through Cin7.

Cin7’s solutions handle 125+ million orders per year, helping our valued customers grow their revenue during Q4 and into the new year. From Black Friday to Cyber Monday in 2023, our customers achieved an 8.33% increase in sales, which is over double the National Retail Federation’s prediction (3%-4%).  

Start a free trial today to get a headstart on your competitors.

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