Yes, you read that title correctly. I experienced an overnight fourfold increase in sales that tried to kill my company.
But I’m fighting back.
Today, we live in a digital world. From the year 2000-2014, there was a 741% increase in internet usage worldwide. This presents several unique challenges to businesses that sell online, mainly, that more people enter the market each day. Online sales happen at the speed of light, and company reputation, competition, and market supply and demand will all play a role in the health of your bottom line.
Due to the nature of the online marketplace, there can be unpredictable sales spikes which create fires hot enough to burn any business to the ground. A company that has an average of five thousand sales cannot always predict or be prepared for a spike of 10-20 thousand in sales. If they run out of inventory and cannot quickly restock, the competition will grab market share while they stand around for their next order to arrive.
So how can a business be successful if growth may be volatile, unpredictable, and never-ending?
The first step to success to begin thinking of time as it relates to your supply chain decisions.
Some of these time factors are:
To find the amount of time it will take to resupply, add production time to shipping time: P+S= time it takes to resupply. We will call this R.
To find the amount of days left in inventory before a stock out, subtract sell-through from resupply: St – R = days of inventory left before a stock out. We will call the O.
Ultimately, “O” needs to be as close to “R” as possible without overstocking, or under stocking. (Both of which generate negative consequences as well).
The image below shows my sales volume in the month of April. Notice how at the end of April sales spiked and have continued to increase through May. This presents unique challenges that we are currently battling head-on using several strategies.
There is no need to panic over unnaturally low or high sales days as long as you are aware that they do occur, are watching for trends, and begin developing a strategy to combat the potential negative side effects.
So, what are some of the methods you would use to ensure you can handle sales spikes?
Let me know in a comment below and then read own personal strategy.