As 2015 comes to a close, it is a good time for self-evaluation. Hopefully, you’ve met or exceeded your revenue goals, and come in under on the expense side. Regardless of where you landed, the time around Christmas and New Year’s Day is perfect for putting together a plan for the year ahead.
For Stupid Cancer, 2015 was a year of rebuilding. Due to a shift in our nonprofit budget, we started the year with too little inventory on critical, higher-margin winter items, like hooded sweatshirts, beanies, and other accessories. Unfortunately, we had too many t-shirts that weren’t selling during the cold winter months. I looked to the summer and fall to pick up steam, to position us for a strong holiday season.
I launched this column in May 2015. In part, my posts have described our move to a third-party fulfillment company. Since that move, I’ve learned a lot about inventory movement. In the past, I felt less of a compulsion to slash prices to reduce inventory. With our new fulfillment relationship, however, I realized that having stale inventory was expensive for our company, as the fulfillment company charges for storage at its warehouse.
To reduce stale inventory this year, one of my Black Friday weekend sale items was a shirt that we offered in a several different colors. The 30 percent off on top of the already marked down shirt amounted to a retail price of $1.75 — for a product that cost $6.50. But I no longer have it sitting on the shelf in the warehouse. The irony of this particular shirt is that it was the first product we introduced in multiple varieties, due to our newfound freedom of ample warehouse space!
Even though we took a loss on the item itself, marking it down created more positives than negatives. For one, it allowed consumers with limited resources to purchase the shirt and have a deeper relationship with the brand. Also, in many instances people purchased the shirt and one or more other (more expensive) items, which softened the loss. Finally, and perhaps most-importantly, I am no longer paying to store it in the warehouse. It was a good lesson to learn, and a fun sale to watch unfold in real-time.
I realized in 2015 that I needed to improve my overall inventory management of running the Stupid Cancer store. I am not as responsive to inventory matters as I was when it was housed on-site and I handled fulfillment each day. Bigcommerce, our ecommerce platform, allows us to set minimum inventory alerts, something I need to use more consistently.
One of the tactics I used in 2015 to avoid excess inventory is to leverage Bigcommerce’s pre-sale functionality. With only a few days from conception to rollout, I launched a 99Designs contest for a “Stupid Cancer Ugly Christmas Sweater” design. With the help of a celebrity brand ambassador, we sold over 100 units in the past month. At $25 each, the sweater helped bridge the gap between our marked down t-shirt inventory and higher priced winter goods. The pre-sale also helped minimize costs. When all was said and done, we had less than five units of excess “ugly” Christmas sweaters.
This past year was also our first attempt with omnichannel selling. After reading that a staggering 40 percent of all online shopping starts with a search on Amazon, I listed a few of our best sellers on that platform. They have not produced many sales, yet. I will expand on our Amazon experience in future installments.
Regardless of how your 2015 shook out, I wish you a happy holidays and a healthy new year.