Rose Van Hemmen
Ontario’s small food businesses are vibrant sources of unique and delicious seasonal treats that large-scale companies often overlook! But for your local or home-based business, managing high-demand seasonal products can be a tricky act to balance.
This guide will equip you with the top strategies to keep your inventory management flowing smoothly without stockouts, stress, and profit loss while giving your customers a taste of Ontario’s delicious seasonal goods.
Why Your Business Needs Inventory Management
Secure Your Finances:Â
Efficient inventory management is the foundation of financial success for any home food business. By minimizing product waste and ensuring you have enough stock to meet peak demand, you can maximize your profits. Effective inventory management helps you avoid costly situations, allowing you to reinvest profits back into your business and fuel its growth.
Cultivate Customer Loyalty:Â
In food eCommerce, a positive reputation is everything. Stockouts that leave customers empty-handed not only lead to disappointment but can also damage your brand image. Well-managed inventory ensures your customers can always find their favourite seasonal treats, fostering trust and loyalty that keeps them coming back for more.
Gain Freedom in Your Creative Endeavours:Â
As a passionate food entrepreneur, your focus should be on creating delicious and innovative treats. Inventory management shouldn’t be a source of stress and anxiety. By streamlining your inventory systems, you can eliminate the worry of stock shortages or expiring ingredients.
Challenges That Come With Seasonal Inventory
Navigating Short Seasons & Unpredictable Weather:Â
Ontario’s short growing seasons and changing weather patterns can create uncertainty for your business. Sourcing fresh, local ingredients can be challenging due to limited availability, potentially leading to stockouts of popular seasonal items and frustrated customers. Plus, unpredictable weather events can disrupt harvests, forcing you to adapt production plans on the fly and potentially creating dead stock of pre-purchased ingredients that didn’t make it to market.
Limited Online Visibility & Inventory Management Challenges:Â
Standing out in the crowded online food marketplace can be difficult! With countless options available, a limited online presence can hinder sales and make it challenging to move seasonal inventory efficiently, potentially leading to dead stock or expiring products. Without the physical space limitations of a traditional store, it can be tempting to over-order ingredients in anticipation of high demand, only to be left with excess stock that needs to be discounted or discarded.
Shipping Perishables Across Diverse Climates:Â
Shipping perishable seasonal treats across Ontario can be a logistical challenge. Improper handling during shipping can lead to spoilage, unhappy customers, and wasted inventory. Finding cost-effective and reliable shipping solutions for temperature-sensitive products is what you need for success.
Solutions for Your Businesses Through Any Season:
Order Ingredients Based on Need to Avoid Overstocking
Use a Production Calendar: Make a schedule outlining what products you’ll offer and when you’ll make them before buying any seasonal goods. Remember, some local suppliers may require advanced orders, while others offer same-day pick-up. And don’t forget to factor in processing times for your products! Jams and pickles require setting time, while baked goods need to cool before packaging.
Using a calendar helps you avoid over or under-ordering. 34% of businesses have shipped an order late because they accidentally sold a product that was not in stock.
Embrace Local Sourcing: Partner with Ontario farms and producers for fresh, seasonal ingredients. This shortens delivery times and allows for more frequent, smaller-quantity orders. Consider participating in Community Supported Agriculture (CSA) programs for reliable access to seasonal produce throughout the year. Explore local farmer’s markets for unique and high-quality ingredients, allowing you to adapt your offerings based on seasonal availability.
Try Batching Strategies: Group similar products together for production to optimize ingredient usage and minimize waste. For example, if a recipe calls for a single egg white, consider doubling the batch and using the remaining yolks in another recipe. Pre-portion ingredients whenever possible to minimize prep time during peak periods.
Use Older Ingredients First for Peak Freshness
Make a Labelling System: Implement a clear and consistent labelling system for all incoming ingredients. Include the “use by” or “best before” date from the supplier prominently on your label. Consider adding a secondary “received on” date to easily identify older stock that needs to be used first. You could also invest in a label maker to keep your labels legible while in storage.
Using item tags can take your inventory accuracy from just okay (63%) to almost perfect (95%)!
Organize for Efficiency: Designate specific areas in your storage space for new and old stock; use a “first-in, first-out” storage method. New deliveries should be placed behind existing stock so that older ingredients are used first. Try using clear shelving or containers to easily identify and access older ingredients.
Use Inventory Rotation Techniques: Regularly check your stock levels to identify close-to-expiry ingredients. Feature older ingredients in special promotions or discounted bundles to encourage sales before they reach their expiry date. Get creative with repurposed ingredients! For example, you could use slightly wilted greens in a flavourful pesto or overripe fruit in a delicious jam.
Data-Driven Planning for Increased Productivity
Gather & Analyze Your Sales Data: Use sales data from your eCommerce platform or online marketplace to track sales trends across different seasons. Identify what your top-selling seasonal items are and when they had the most sales. Analyze customer purchase history to understand which products they buy in combination to identify potential upsell opportunities.
Forecast with Confidence: Based on information about what products you’ve sold and when, create sales forecasts for upcoming seasons. Consider external factors that may impact demand, such as weather patterns or special events like holidays. Adjust your forecasts throughout the season based on real-time sales information so you always have enough stock for peak periods.
Optimize Production Planning: Translate your sales forecasts into production plans. First, determine the amount of ingredients needed for each separate product based on your predictions. Next, order ingredients strategically, remembering to consider the time it takes to receive ingredients after you order them on top of storage limitations. This way, you can minimize the risk of overproduction and dead stock while making sure you have enough inventory to meet customer demand!
Pre-Sell to Generate Buzz and Secure Sales
Promote Pre-Orders: Use your social media platforms to announce upcoming seasonal offerings and launch pre-order campaigns. Create eye-catching posts using free platforms like Canva to showcase your treats. Make sure to highlight the limited-edition nature of pre-order items to create a sense of urgency and exclusivity.
Take the menswear company SPOKE as an example of success—their sales became 400% higher than expected by letting customers order in advance!
Offer Early Bird Incentives: Customers are more likely to pre-order with special discounts or bonus items. Consider offering free delivery or a complimentary product for early pre-orders! You can also reach out to local businesses for bundled pre-order packages that promote both of your products. For example, team up with a cafe to offer a bundle featuring your fresh bread and their roasted coffee beans.
Manage Pre-Orders Efficiently: Make sure you use an online ordering platform or a dedicated pre-order form to collect customer information and secure orders distinctly from your other orders. Clearly communicate pre-order deadlines, pick-up or delivery options, and payment methods. Provide regular updates to pre-order customers about production progress and estimated delivery dates.
Bundle to Reduce Dead Stock
Identify Complementary Combinations: Look at your product line and identify which items have longer or shorter shelf lives. Then, consider pairing one of each in a bundle, making sure the products selected have similar or complementary flavours! For example, pair your spicy kimchi with a cooling cucumber salad or your fresh rye bread with sweet peach jam. This works even better with a seasonal theme—bundle your summer salsa with homemade tortilla chips or your fall harvest apple pie with a tub of homemade vanilla ice cream.
Give Your Customers Options: Alongside your bundles, allow customers to create their own custom bundles. This gives your customers a greater sense of autonomy, flexibility and personalization. Consider tiered pricing structures and discounts for larger custom bundles to incentivize bigger purchases.
Promote Your Bundles: Don’t forget to feature your bundled deals on your website and social media platforms! Create appealing posts that showcase your bundled products together. This reaches customers who may not know your business, but like bundles, while also keeping current customers returning for something new.Â
Strategic Price Reductions to Minimize Waste
Identify Discount Opportunities: Monitor inventory levels closely and identify slow-moving seasonal items nearing their expiration date. Discount perishable goods first to minimize spoilage and wasted ingredients.Â
Get Creative With Discount Strategies: The best type of discount strategy is the one that works for your business, so experiment! Promote flash sales or limited-time discounts to create a sense of urgency and encourage quick purchases. You could even try a charity sale, where you donate a portion of discounted sales; this adds a positive, personal touch.
Communicate Discounts Effectively: Clearly announce discounts on your website, social media platforms, and email marketing campaigns. Be transparent about the reason for the discount (e.g., nearing expiry date) and highlight the quality and deliciousness of the discounted items. Emphasize the value proposition for customers by showcasing the discounted price alongside the original price.
Consider Expanding Your Reach Beyond Ontario
Identify Target Markets: Research regions with opposite seasons to extend your selling window. For example, if you specialize in maple syrup, consider targeting areas with colder winters where customers prefer warmth. Explore online marketplaces and social media groups catering to specific preferences or dietary needs. You may find a niche market for your unique seasonal offerings!
Use eCommerce Platforms: Build your brand and promote your business on eCommerce platforms like FreshFind to reach a wider audience. If possible, partner with international food subscription box businesses to showcase your seasonal treats to an already-curated customer base. Remember to follow all regulations when shipping internationally!
Leverage Digital Marketing Tools: Use targeted social media marketing campaigns to reach potential customers in your chosen international markets. Explore SEO-friendly keywords for international food businesses to position your products at the top of search results. And for even greater reach, partner with food bloggers or social media influencers to promote your products to their audience!
Use Software to Streamline Operations
Choose the Right Program: Research popular programs that help you track your inventory like Square, Shopventory, or Ordoro, considering features, pricing, and ease of use. Look for software that integrates with your existing eCommerce platform or online marketplace and offers features specific to food businesses, such as ingredient tracking, recipe costing, and expiry date management.
Try Automation: Use your selected inventory management program to automate repetitive tasks like order processing, the minimum amount of stock you need before placing a new order, and low-stock notifications. You can even use this software to forecast future demand based on historical sales data and seasonality, taking some weight off of your own shoulders.
Make Data-Driven Decisions: Use this data to then make informed decisions about production planning, ingredient purchasing, and pricing strategies. See what your top-selling seasonal items are and adjust production quantities accordingly. If selling internationally, track sales trends across different regions to understand customer preferences globally.
Manage Delivery and Pick-Up
Partner with Local Delivery Services: Research and partner with reliable local delivery services that cater to food products. If it’s available, choose delivery partners that offer temperature-controlled options for perishable seasonal items.
Offer Convenient Pick-Up Options: For higher levels of freshness, offer pick-up locations at your home or a central location for customer convenience. Establish clear pick-up windows and communicate them to your customers during the ordering process to avoid confusion. Consider offering contactless pick-up options to cater to customer preferences and safety concerns.
Invest in Quality Packaging: You should always be using secure packaging that protects your products during delivery or pick-up. Consider seasonal packaging that matches your products to keep your orders fun and exciting! Include clear labelling with product information, expiry dates, and storage instructions to make sure your products meet customer expectations.
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