6 Ways Retail Business Owners Can Maximize Profit During The Busy Holiday Season

Contributed by Excel Capital Management’s Managing Partner, Chad Otar.

“It’s beginning to look a lot like Christmas!”

We all know that old jingle by Johnny Mathis, even if you do not celebrate Christmas. For most people, when you start hearing this song and other jingles, it’s a sign that the holiday season is upon us. For business owners, that’s not the case; especially for retailers. It’s the time of year that is the difference between profitability and loss on the balance sheet and is typically the make or break time of the year. According to our data Alternative Business Funders notice a dramatic increase in business loan applications in the months of October and November for retailers.

In fact, the winter holidays trump all the rest with over six-hundred billion dollars in sales each year.  Retail sales, in particular, tend to increase around twenty-one percent during the holiday season.  As you know, most retail business owners use this time to increase sales through special sales and promotions, hiring seasonal staff to have extra help on hand, extending business hours, and sprucing up their marketing and advertising campaigns. Implementing all of these techniques is a sure-fire way to increase sales, and once the revenue starts rolling it, it is also a great time to maximize on profit. After-all, during Q4, on average, retailers see a revenue increase of at least five percent regardless of yearly population growth. Furthermore, around twenty-seven percent of all revenue is a result of sales during this quarter.

Here is a quick guide to help you maximize your profit during the busy holiday season!

Buy Bulk Inventory

When you buy inventory in bulk, especially the holidays, you are able to turn around your inventory at a cheaper per item cost to maximize your margins, thus generating a larger profit. Try buying items that are forecasted to be high-sellers during the holiday season.

Implement Your Online Advertising & SEO Strategy

Now is the time to put your seasonal marketing plan and SEO strategy to use! Optimize campaigns based on popular holiday search phrases and keywords. You’ll want your retail business to be number one on the list when customers are looking for great holiday products and services. Instead of running an SEO campaign based on the key phrase. For example: “holiday gift ideas for teens” or “fall clothing for boys.” Depending on your market and location, the more specific, the better at times.

Reconsider Your Pricing 

While Q4 is when most retailers see an increase in sales on their products, it is also a time to figure out which items are not selling. Once you determine which products are slow-sellers, consider running special holiday promotions or marking down prices. This is a way to get rid of old inventory that can’t be used, while also satisfying customers and getting some sort of return on the inventory. The increased sales on other items will, in theory, make up for any losses.

Have a Plan For Leftover Inventory and a Post-Holiday Sales Plan

Once the holiday rush slows down, you may be left with excess inventory (old, and also some of which you bought in bulk). Because storage costs can run high or there may be limitations on space within a business location, many retailers find themselves liquidating; there are other options though. is a great time to run flash sales on your site (“limited time only” specials), sell products on digital marketplaces and e-commerce sites (EBay,Amazon, Etsy, etc.), encourage customers to buy in bulk, or if necessary, return unsold items to the supplier. Once you find the right way to get rid of leftover inventory, it is a great time to regroup and think about current vendor relationship and what inventory will be needed for the next fiscal year. Learn what vendor discounts may be available. Estimate freight costs. Consider switching suppliers. Be sure to go over your data to revamp and update your sales plans and goals.

Maintain Customer Relationships

Regardless of the season, you should constantly keep customers interested. Showing them how much you care is key to have them coming back for more. Once the holiday rush is over, update them on how great the season and past year was with a friendly newsletter. Many retailers even send out special post-holiday coupons to their mailing lists. Also keep customers interested and in the loop with consistent blog and social media updates, and simple thank you’s just because. Sure, this will help to maximize profit and keep the revenue flowing, but it also shows ingenuity and sincereness. Make it count.

Rethink Your Business’ Budget 

During the holiday rush and shortly after is a key time to rethink your business’ budget. Similar to the aforementioned, maximize profit by determining how to allocate money for business expenses, new inventory, marketing strategies, pricing plans, and anything else pertaining to business needs. Thanks to the revenue that rolled in during the holidays, you will ideally have extra capital to play around with.

The holiday season is an exciting and adrenaline-filled one perfect for retail businesses, but before you know it, it’s gone! Competition will be steep, but there’s money to be made and customer relations to be built.

Take advantage of the most lucrative time period of the year for retail business owners like yourself. Use this crucial time frame to regroup, grow your business, plan for the future, and most of all, maximize your profit!

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