How To Get Your Small Business Ready For Peak Season
Peak Season: One of the most daunting times of year for small business owners. How can you prepare for the uplift in sales whilst managing your cash flow, man-hours, returns, picking, packing and marketing? The list goes on.
As we mentioned in our previous blog, Why We Specialise In SMEs, we have had first hand experience of tackling the e-commerce world for over a decade, whilst running our own online homewares store, Silver Mushroom. We understand the enormous pressure you will be facing as we gear up for the last quarter of the year, so we have popped together a simple guide to help all SME owners get themselves and their businesses ready for a successful holiday season.
What Is Peak Season?
In short, Peak Season is the final quarter of the calendar year. As your customers begin their holiday shopping their mindsets switch into ‘shopaholic mode’ and we see consumerism shoot through the roof. According to the National Retail Federation, SMEs now turn over a staggering 40% of their annual sales in November and December. Crazy, right?
The activities undertaken during this time period will differ for all e-commerce businesses. However there are some key events that will affect your business, no matter what sector you operate in. Black Friday and Cyber Monday, potentially the biggest sales events of the entire year, where customers shop for huge discounts across e-commerce and high street stores. Christmas present season usually kicks off from Black Friday onwards and comes to a close on the last collection day which is usually one or two days before Christmas Eve. Last but not least, Boxing Day. It is now the norm for most retailers to offer another sales event for Boxing Day.
The Challenges Of Peak
Whether this is your first peak season in e-commerce or you’re a seasoned veteran, you will likely know of the difficulties that come around this time of year for retailers. The main challenge you need to be aware of is delays. As your manufacturers, transport companies, customs departments and every other player in the game experiences a huge uptake in demand at this time of year, the domino effect kicks in and an entire process that once took a handful of days to complete, now could take a handful of weeks. This is crucial to bear in mind when thinking ahead, as well as considering your storage capabilities, logistics, inventory management and shipping. But don’t panic, we’re going to walk you through how to cope with all of this very shortly.
Get Your Business Ready At The Right Time
This is an area we have battled with whilst preparing our e-commerce business for peak for many years. Everywhere you look you will find articles stating that “all e-commerce businesses must be ready for peak by June, or else…”. Whilst the premise here is of course true, this is a statement that, to many SMEs, is nothing short of unrealistic. Yes, in a dream world you would have your business ready and geared up with forecasted stock figures sitting pretty on your shelves whilst you wait for your peak sales to flood in. But the reality can be a very different picture.
The key fact these business gurus seem to gloss over in these articles is that for growing businesses, unless you can secure large pots of investment, you likely won’t be able to get your business fully ready for peak due to the fact that this will tie up an enormous amount of precious cash flow that you need for the day to day runnings of the business.
So, how do you get your SME ready for peak without cutting yourself short in the meantime? We’re so glad you asked! We whole-heartedly believe that getting ready in advance is key to success but the timing is a delicate balance. We have put together a realistic step-by-step guide to help you get ready for Q4 and ensure you cover all bases, without emptying your business accounts in Spring.
The Small Business Guide to Peak Season
Step 1) Analyse Trend Research & Historical Data
It is crucial for all retailers to do their market research into what the experts are forecasting will be big this Q4. Having an idea of what the industry experts are predicting to be popular is key and can be a blessing for start-ups who don’t have any data from previous years, but it is best used when paired with historical trading data. If you have been in business for a number of years you will likely have seen some trends rear their heads each and every peak season.
Our advice is to get familiar with Google Analytics. This handy tool will likely become your best friend whilst getting your peak data together. We recommend looking at what your best selling lines were in previous years. Do any particular categories within your business see a large uptake? Look out for trends, these will help you know where to put your cash and when you need to invest. This data is your best bet at accurately forecasting what is going to be a hit this peak season. We also suggest digging into the nitty gritty details of any previous promotional activity, as well as stats from your PPC advertising and social analytics to give you the clearest picture of what this year may look like for your business.
Step 2) Align Your Peak Promotions With Your Operational Support
Now you have a clear picture of what has historically sold for your business, the chances are you are also promoting new products or collections this year. It is important that you have an explicit plan of your promotional activities to feed in to your operational plan, even if you are an incredibly small team running your operations in-house. For example, if you’re launching a new collection on a certain date, you may need to recruit some extra help in shipping out your orders over the following weeks, or an extra member of staff to help you with an increase in customer service tasks.
This marketing plan is also something we ask our clients for here at CK Fulfilment, as it allows us to resource plan so that we too can handle any sudden uptakes in sales and maintain our SLA (service level agreement).
Step 3) Get On Top Of Logistics & Delivery Timescales
This is a broad segment but it is crucial for a smooth sales season. It is highly unlikely that your suppliers are going to continue delivering in their normal delivery timescales. Take this into account when placing your stock orders or waiting for materials. Hopefully, your suppliers will be transparent about their extended delivery timescales but bear it in mind when getting your peak plan in place.
We recommend working backwards here. For example, if you want to launch your Christmas collection on X date and shipping takes 2-3 weeks, you will need to order your stock 4-5 weeks in advance to allow for unforeseen delays.
Step 4) Prepare The Postman
Not only is it possible that you may experience stock delays, your parcels could, on occasion take longer than usual to reach your customers. There are a few ways to tackle this problem. Firstly, asses your current shipping partner. How has their performance been recently? If you have any concerns, find yourself a backup courier who you can fall back on if your current partner cannot handle the increase in volumes. Talk to your courier network prior to peak season to let them know what you expect to be sending with them.
We also recommend being as transparent as possible with your customers. If your shipping ordinarily takes one day and you are estimating it’s going to be around three days through peak, then it will pay to be honest about this. If you manage your customers expectations from the get-go, you will save yourself time dealing with aggravated customers further down the line.
Step 5) Get Ready For Returns
Unfortunately returns are part of the process when it comes to e-commerce and an uptake in sales means that we must prepare for an uptake in returns. If you are a client of ours, you will already know our returns SLA and you will clearly see via our WMS (warehouse management system) where we are up to with your customer returns, giving you real-time information to inform customers of refunds and replacement shipments.
If you are running your operation in-house, we recommend getting a water tight returns process in place ready for peak. Create a designated area to store return parcels and schedule time each week to work through these to ensure they don’t mount up, delaying refunds to customers and resalable items being put back in stock.
Step 6) Your Survival Budget
Thinking about your peak sales flooding in is a very exciting thought. However with more sales comes more costs. It is imperative that you budget for peak season accordingly. We advise all SMEs to work out what their minimum needs are. What does your business need to survive Q4? Once you have a clear idea of your costs, you can be disciplined with your cashflow. Budgeting allows you to minimise unpredictability for your business, which is key to staying afloat, even if things don’t go exactly to plan.
How CK Fulfilment Could Help Your Business This Peak Season
We welcome SMEs with open arms this peak season. We know the headaches that you’re facing and we can help you overcome them. Here’s just a few ways in which we could help your business:
Resource - We have readily available resource to tackle the peaks and troughs that come along with peak season. So you don’t need to hire seasonal staff or beg your friends and family to give up their evenings and weekends to help you pack orders, enabling you to run exciting sales and launch new ranges or products without worrying about keeping up with fulfilling your orders.
Shipping & Packaging - We also offer access to one of the best courier networks available, so you can ship parcels with confidence, knowing they are going to arrive in good time and in one piece. By shipping with us you can also obtain the best possible shipping prices.
Returns - We’ll handle the dreaded returns so you don’t even need to think about it. Resalable stock will be thoroughly checked and put back into your inventory quickly, ready to be shipped again.
Storage - If you are planning on stocking up on some key lines, we have the capacity to safely store your stock so you don’t have to rearrange your space to accommodate for your peak stock.
We’d Love To Chat
If you’re interested in discussing how CK Fulfilment could help your business this Peak Season please fill out the form below or give us a call on 01772 356673 and we can begin building a bespoke plan to help you grow and surpass your business goals in Q4.