Ep 11: August prepares for the holidays

Learn how to leverage a spike in demand.

August Prepares for the Holidays

Featuring: Small Business Owner August Graube and Professor at the University of Texas Edward Anderson

On Episode 11 of This is Small Business, Andrea tackles getting ready for the holidays with Fort Boards Founder, August Graube, and Edward Anderson, a Professor for Management of Innovative Technology. The holidays are coming – busy sidewalks and shoppers walking home with their “treasures” – are you ready for them? This is a question that all small businesses need to consider as they prep for a big consumer season such as the winter holidays. What is the checklist to prepare for and leverage a spike in demand? Find out with Andrea, grab a hot chocolate – and don’t miss this special pre-holiday episode.

August with a life-size Fort Boards creation.

Episode Transcript

[00:00:05] HOST: When the holidays are looming -- stores are booming. Orders go up and delivery timelines shrink as the clock moves towards the "big day" and for many small business owners in retail, let's just say it doesn't feel much like a holiday at all.

[00:00:24] Hi I'm Andrea Marquez -- and This is Small Business – a podcast by Amazon. This show is all about learning how to start, build, and scale a small business. On each episode - I gather valuable insights that we can all file away in our small business playbooks and use on our small business journeys. I can’t believe we’re almost at the end of the year! I’ve enjoyed our time together and am excited to keep going and growing together on This is Small Business. Remember to let us know what you think by subscribing, leaving a review, sharing with your friends, or emailing us thisissmallbusiness@amazon.com. [00:01:00] Shout out to therapistcv for leaving us a review. This is what they said: “truly enjoy listening to ‘This is Small Business’. It feels authentic and personal to me on many levels. The conversations with each small business owner feel focused and naturally flowing. The conversations often leave me feeling inspired and hopeful to pursue my own goals. I love that each story is different and personable, they remind you that we all face challenges in different ways and we are all trying to make a difference and persevere by creating our own paths.”

I love this review. And this is why we do what we do. So join therapistcv and let us know what you think of our little show, This is Small Business.

[00:01:50] HOST: The retail market in the run up to the holidays is "on fire" and it can be a lot to deal with. If you're a small business owner, how can you prepare for the holidays in advance, so that you can maximize the retail opportunity [00:02:00]-- but also enjoy some time off? To help us answer this -- I'll be introducing you to a professor of supply chain management at the McCombs School of Business at University of Texas. But first -- I want you to meet someone who can literally help you build a fort to withstand the pre-holiday rush. Remember how much fun it was to play with forts when you were a kid? To build your very own castle, or hut? Well, August Graube remembered. And he wanted to recreate that kind of imaginative fun for kids today. So, August founded a unique company called Fort Boards. And I'm going to let him tell you all about it.

[00:02:42] AUGUST: Fort Boards is a fort building kit for kids. And it got started…I was doing project management for a museum exhibit company that did museums all over the nation. And we were working on a local one here in Seattle for a kids exhibit. And I had made these large Lincoln log type boards for kids to play with. [00:03:00] And you could just tell when doing kid testing with them, that kids just loved playing with something full scale. And I was like, well, duh. Yeah. Like I loved playing with forts as a kid and like build, I spent hours playing with forts out in the country. So, I looked to see if there was anything good out there on the market. And it seemed like it was a, a bit of an open space. So I decided like, I think I can design and build something and get it to market in like six months. And I had never brought anything to market before, so it took close to three years to, to launch it. But, uh, when it launched, it was, yeah, it was really good success and lots of press and awards. And so it's been going now for a little over six years and, yeah, it's, it's been a, a fun journey.

[00:03:44] ANDREA: That is amazing. And I'm glad that you brought up that instead of the 6 months you thought it would take you to launch, it actually took you three years. It puts into perspective the amount of work it takes to launch a business. Can you tell me more about why it took that long?

[00:04:00] AUGUST: Part of it was the design phase. I think I spent more time on the design phase than I probably needed to just cuz it starts to feel like your baby and you don't really wanna launch it before it's ready and fully baked. So that's why it was a, a long, long launch.

[00:04:15] ANDREA: Your target audience are kids. So how do you get to those kids? Who buys your product and when do they buy it?

[00:04:23] AUGUST: It's safe for infants on up, but the kids that really get it and love it are like the eight, nine-year-olds. And those are the kids that really start to be able to freeform build. Like, they become really inventive and they come up with things that I would've never thought of before, like, you know, robots and like one, one kid built a coffin to scare his, his babysitter around Halloween, you know, to jump out of and, you know, stuff like that. It's just like what?

[00:04:47] ANDREA: I wish this existed when I was a kid, but I mean, there's no age limit, right. So, I technically could still...

[00:04:55] AUGUST: No age limit. Yeah, totally. And I, I kind of had my nieces in mind when designing this cuz they live here in Seattle, [00:05:00] like I do. And like my sister and I grew up out in the country and you were able to sort of explore your own world out there and run around until dinner time and come back. And no one was watching you and it's kind of a shame. Kids today can't really do that. And so, I wanted to have Fort Boards be that kind of little adventure forum, where they could still build their own worlds and hide out in it and sort of feel like that kind of independent nature, like, like we had growing up.

[00:05:27] ANDREA: It's like bringing the treehouse that we all dreamed of having when we were young, indoors. I love that. So, considering this is a toy, I imagine the holidays represent a spike in demand for Fort Boards, right? I’m thinking this is a perfect holiday gift.

[00:05:41] AUGUST: Yeah, it's the case mostly because of price point. So the toy industry works on, you know, sort of two different occasion. One is birthday parties and that's like, 20 to $40 price point. And then there are the holidays which parents are willing to spend more and grandparents are willing to spend more and it's kind of the big-ticket items. [00:06:00] And so, since Fort boards is $50 an up it, uh, situates itself, well for the holidays, um, and less so for, for birthdays. My demand it's between like 60 to 65% of yearly sales happens during the holiday seasons.

[00:06:17] ANDREA: How do you prepare?

[00:06:19] AUGUST: It was difficult at first to like, mentally deal with that because you, you kind of feel like during the year it's like, oh my God, what am I doing? Some of my life? Like from January to October, you're. Man, I gotta figure out something else. Like this is not working. What am I doing? Like I better start interviewing around. And then like November, December hit, and you just feel like Scrooge McDuck swimming through your money, a vault. And it's just a, you know, an avalanche of sales all at once. And so I've, I've since learned to deal with that mentally, but, uh, from the actual business standpoint the main thing is trying to forecast appropriately for the holiday season. And that's the, the trick.

[00:07:00] ANDREA: And when do you even start preparing for this rise in demand?

[00:07:02] AUGUST: I'm not an expert at it by any means. But what I do is just have an Excel spreadsheet that has monthly sales throughout the year. And that goes back from when the company first started. And so I'm able to look at the previous month's sales and how that's stacking up with the year prior and do an average of percent wise of like what percentage a volume am I expecting during the holidays? Um, based on what the, the yearly sales have been thus far. So in, in June, or they're about to make a decision on how many containers to bring in and, um, and do it that way.

[00:07:36] ANDREA: As a small business owner what should I do to ensure that I'm ready?

[00:07:41] AUGUST: If you're just starting out, I would say go smaller rather than larger. Cuz you do learn a lot of lessons from labeling requirements too. I've had friends that have launched product and one of the stickers that covers the cap to make sure that, you know, it's like sealed properly, [00:08:00] just aesthetically, but like, you know, customers care if the seal's broken all of those stickers and shipment, like it was hot and those peeled off. And so someone had to go by hand and stick every one of those stickers back on, you know, one by one by one in container loads, full of product. And so there's a lot of stuff that you can't anticipate when you're first launching a product and a lot of those bugs get figured out and the kinks need to get worked out. So when you're first launching, definitely good to do a quantity that you can learn on to begin with.

[00:08:35] ANDREA: I'd be terrified as a small business owner if I have a product that I know will receive more attention during the holidays. So is it better to over index? Like if by the end of the holiday season where I have that spike, I have a lot of leftovers versus being out of stock?

[00:08:53] AUGUST: I mean, it's a whole science of, you know, supply chain, logistics and storage. Like the complicated answer to that is to [00:09:00] look at what your storage fees are and, um, compare that to what lost sales would cost you.

[00:09:08] HOST: I knew it. I knew there had to be math involved! Turns out, August has a system that he likes to apply to figure out just how many "extra" fort boards to bring in during the holidays.

[00:09:19] AUGUST: And so you could figure out a number there roughly of like, if I'm over-indexing by X percent, I'm gonna start losing money because of storage fees. Um, but I'd say that the easy answer is in general, like try to shoot for maybe 150% or 125% of what you think you're gonna need for that holiday season. And that, can keep it simple, but of course your Excel spreadsheets can be as, as large and as complicated as you want to try to figure out where the, um, the correct amount of over indexing would be to make sure that you're in the sweet spot of not having a lot of storage costs after the holidays, but making sure you're not running out during the holidays.

[00:10:00] ANDREA: So based on everything you've learned, what are some things that you would've done differently when it comes to being a small business owner and leveraging spikes in demand or preparing for them?

[00:10:11] AUGUST: I've only had one serious mistake in those six years. And that was where I was. Um, I eventually had to move production overseas to China cuz when I got the volume high enough, it just, I couldn't compete with doing US production. So with China coming through customs it can be very unforgiving. And when I first started, I didn't realize that I needed to do specific things. And so, I didn't have a, um, safety document, the CPC along with my like first few shipments of product, I don't think. And so, one day my shipper says, you know, where's, where's the CPC. And I'm like, I, I, I don't know what, like you deal with it. And so, like finally, when they started really raising the red flag, I, I realized what I hadn't been doing and needed to do. I mean, it had been safety tested before, but I got, [00:11:00] I created the right paperwork and submitted it to customs. Uh, but it was two or three days late, I think, in the timeframe they needed it by. And so, because of that, it sat in a customs warehouse for a month. So, they're charging you fees while like warehouse fees while it's sitting there. And the warehouse fees are extremely high. And not only that, but like the, the truck, the container that it's sitting in is charging you fees. And so, after that month, it ended up being 11 grand that it cost. And, like, it took me probably a year and a half to where, when I thought about that, I didn't just have this horrible feeling in my stomach. You know, it's like, cuz that's coming straight outta your own pocket.

[00:11:45] HOST: A CPC document is a Child’s Product Certificate that must accompany products imported into the US that are made for or intended for use by children. In the US, children’s products are defined as a consumer product designed or intended primarily [00:12:00] for children 12 years of age or younger. You can learn more about this on our website thisissmallbusinesspodcast.com. August laughs about it now -- but I'm sure at the time -- this delay and extra cost was a serious blow. Definitely not something that would put you in the holiday mood, right?

[00:12:20] AUGUST: But as far as the other logistics planning, my thinking was that two thirds of the population is on the east coast and one third on the west coast. And so having something that's a little bit closer to the east coast cuts down on shipping charges. And it's something I have to think about a lot with my product, cuz it's big and heavy. And so shipping costs really eat into a lot of margin. And so, um, I ended up going with the warehouse in Indiana. And they're more expensive than some that I've heard of, but they're small enough to where they give me personal service and I've always got a guy that I can reach out to and talk. And he emails me back [00:13:00] usually within 30 minutes and him and his team are very willing to make changes or adjustments or work with me. And, um, and so that mitigates a lot of the risk of those lessons learned. So say like Amazon doesn't like how the label's being placed. And so, he can, you know, next time he's placing the label differently or, you know, something's wrong with the packaging and there needs to be a barcode in different place or a different barcode. Like it's obviously great to make costs as cheap as possible, especially warehouse costs, but. It's when you're first starting out, it was really good to have a warehouse that was very responsive and flexible to your needs. Cuz then you could catch those mistakes as they happened and fix 'em right away.

[00:13:42] ANDREA: How have you been able to leverage spikes in demand?

[00:13:46] AUGUST: Amazon takes a lot of the... the work out of spikes in demand. What I do to, to leverage when I know demand is gonna happen is I try to make sure the product gets in front of people's eyes before that, [00:14:00] and so it's, it's mainly just a marketing thing and it's for Fort Boards and the other brand Blaster Boards, it's a lot of, um, Uh, influencers. So YouTube influencers, uh, love the product and love building with it. And, um, you know, it makes for an engaging video. And so, uh, I, I leverage that a lot before the holiday season so that kids are looking at it and seeing it, and then eventually asking for it for, uh, for Christmas. And I think that that sales tactic is called the, uh, "kid cries. Mommy buys."

[00:14:32] HOST: Kid cries, mommy buys. Oh yeah. That's some effective pre-holiday season planning -- for sure. There are actually a lot of ways to predict and deal with holiday demand, but it is one of those things that's part art, and part science. August says it takes time to learn.

[00:14:50] AUGUST: I think forecasting is the biggest challenge to, learn how to, to do properly. And that just comes with time and sort of learning from your mistakes there. You learn your lessons along the way [00:15:00] and, uh, and hopefully they're not too expensive.

[00:15:04] ANDREA: …and hopefully you’re also filling out all the right paperwork.

[00:15:07] AUGUST: Get your paperwork in line. Yeah.

[00:15:10] ANDREA: August, thank you so much for your time.

[00:15:13] AUGUST: Thanks so much, Andrea, for having me. I appreciate it.

[00:15:18] HOST: MIDPOINT: You're listening to This is Small Business, brought to you by Amazon. I'm your host, Andrea Marquez. I'm so glad we got the chance to hear from August about his super-fun and unique company, Fort Boards. You can check them out this holiday season on Instagram, and learn more about them in our show notes, and on our website, thisismallbusinesspodcast.com.

Did you know that more than half of the products sold in the Amazon store come from small-and-medium sized businesses? Fort Boards is one of the many small businesses selling in the Amazon store who have tapped into some of the tools and resources offered to help them succeed and grow. Learn more about them in our show notes on our website ThisisSmallBusinesspodcast.com. [00:16:00] And, while I've got your attention -- what I'd really like this holiday season would be if some of our listeners would share their ideas for upcoming shows with us. It's easy to reach out. Just send us an email to thisissmallbusiness@amazon.com and let us know what you think. And if you are enjoying the show, text a link of this episode to your friend.

If you're a small business owner yourself, and grappling with questions like how to deal with spikes and dips in demand, or other questions about supply chain management, check out our show notes for more resources, again, at thisissmallbusinesspodcast.com.

[00:16:35] HOST: So… to learn more about how to get your ducks in a row before the holiday season, I reached out to Edward Anderson, a professor of Supply Chain Management at the McCombs School of Business at the University of Texas.

[00:16:50] ANDREA: Professor Anderson thank you so much for being on This is Small Business. It's a pleasure to have you.

[00:16:55] EDWARD: Oh, it's my pleasure to be here. Thank you.

[00:16:58] ANDREA: I'd like us to start with things [00:17:00] small businesses should keep in mind when preparing for a spike in demand.

[00:17:04] EDWARD: When you're looking at a spike in demand, there's a couple of different types of spikes you might be looking for. One spike is that there just might be some high season for your product each year. Another spike might be. Okay. My product is selling at a relatively low rate. It's just going on, and then all of a sudden it catches on and it explodes. And you don't really wanna be in a situation where you can't meet demand. And then the last one is there's just unexpected spikes that don't have a lot of rhyme or reason for them, or other shocks in the other direction. So, we've been having a lot of that, thanks to COVID. There were spikes and certain types of products that we wouldn't have expected, uh, prior to COVID if things had developed normally, and now we're getting gluts in places we don't expect. So if you have to manage a supply chain and think about demand, this is a really tough time.

[00:18:00] HOST: OK so this is interesting to me. There's not one -- but at least 3 different causes for demand spikes... so I guess the first thing you need to do if you're a small business owner is learn the different reasons why demand might spike -- and come up with strategies for each case.

[00:18:18] EDWARD: And then you have to ask yourself couple more questions. Number one is how easy and how quickly can I get my raw materials to me? Or the components I'm going to be using? You have to think about, well, how quickly can I get them to me, how much they cost to store? So those are two major issues that you have to consider. These days, all things being equal, I would, and I know it's hard to do this in a lot of cases, but to the extent I could, I would like to source my things or source my parts and components from places in the United States, Canada, or Mexico. Someplace where, it can be trucked in as opposed to relying on overseas channels, [00:19:00] which are another level of complexity that still hasn't resolved itself.

[00:19:05] HOST: Interesting. It sounds like Edward thinks that in today's climate -- the overseas shipping adds a wrinkle you may want to avoid, if you can. Though as we heard from August -- manufacturing on US soil isn't always the economically viable choice for a small business owner... it all depends.

[00:19:23] EDWARD: The other thing you need to know too, preparing for a demand spike. And it's rather shocking to me how few companies actually know this is, if you look at what parts you need to make your product. Figure out who's making them and where they're located. And there's been some surveys done recently, at least one survey I've read is that on average companies know only about 50% of the parts where they are located from. So if you pick out a part at random for a product you're making [00:20:00] a manufacturing firm would have about a 50, 50 chance of knowing where that part was made in the world. It's a complicated business and people have been taking it for granted for a long time. And to be fair, it's kind of hard. But the first thing I would recommend to a small business owner is just know your supply chain, know what your build of materials is, where your parts are coming from. A lot of small businesses in particular, get them from distributors and that's great, but you wanna understand what the parts are. Who's actually making them? The distributor can only do so much if say the makers in Shanghai and there's another COVID shutdown.

[00:20:40] ANDREA: Why is it important to consider supply chain and demand? Because I don't think that it's something that is immediately at top of mind for a lot of people who are starting out their business. And it's something that I feel you are forced to learn as you go. So why do we even have to start thinking about this sooner rather than later?

[00:21:00] EDWARD: Well, so. I actually teach operations and project management for startups. A big problem for a startup is, uh, for the owners, there's just so much that needs to be done. And the first thing that needs to be done is well, does somebody even wanna buy my product? What is my product? The unfortunate thing that's happened to some extent, is that there's so much legitimate focus there, but you forget about, well, it's not only about figuring out what the customer wants, but what can you actually give them with reasonable, certainty? And that backend, oftentimes isn't explored until late in the game. And it can be a real problem if you don't really consider it upfront. So, you know, when I talk to my students, for example, I'll tell them, start figuring out what your market wants and then start figuring out, okay, here's what I can provide them. And then iterate through that. What do they really want versus what I can really get them and so on and go through several trials. Uh, the lean startup would say [00:22:00] they might even call them sprints, but basically you just, you try a product, a mock up product with your customers. See how it works. Take your learnings. Go back, make another iteration, another prototype and keep going.

[00:22:12] HOST: It's interesting to me how both August and Edward have acknowledged, in different ways, the role of mistakes in the learning process of small businesses trying to get a grip on predicting demand and surfing the supply chain.

[00:22:25] ANDREA: I find this whole thing fascinating. Probably since my dad is a distributor, so since I was little, I have heard about this a lot. And there's just so many different considerations to make. As a small business owner, how do I forecast what I'm going to need? Because what if I ask my distributor for like 10 pens and I only end up using three, what do I do with the rest of them?

[00:22:50] EDWARD: That is a timeless question. And yeah, so, I mean, you can make some guesses about what your demand is going to look like. If you're a new business, [00:23:00] and you're trying a product that hasn't been made or offered to the consumer before then, you know, you can look at similar types of products and try to figure out what their high seasons are and what their demand unpredictability is and so forth. It won't translate over perfectly, but it's better than just sticking your finger into the air and, you know, guessing. And then, the other question you're asking, which is a tough one, is what happens when you over order? What do you do with it? Do you try to clear it out?

[00:23:31] ANDREA: You can't return it, right?

[00:23:32] EDWARD: Usually not. There are some things you can return. So that's worth investigating. And just like you said, with respect to getting the paperwork straight. That's really important. And that's something people don't think about that much either. And that needs to be dealt with. Uh, I've had students whose main jobs in life are running import export businesses and they're forever fighting with, the appropriate forms to fill out and regulations and so on.

[00:24:00] ANDREA: So it sounds like for small businesses, especially NEW small businesses, predicting demand accurately when you don't have a lot of sales data yet is particularly tricky.

[00:24:11] EDWARD: You can, you can make educated guesses,

[00:24:14] ANDREA: Ballpark.

[00:24:15] EDWARD: You can ballpark things. You know, the one thing you know about a forecast is that's going to be wrong, right? So the question is, how good a forecast can you develop? Um, I would say. It depends so much on the firm in question. Uh, but there is a tendency sometimes for firms to, if they end up on the shortfall side to just try to sell at a relatively low cost to gain market share. And this is the opposite problem to what you were asking. But if you don't have enough goods, you know, maybe you ought to charge them at a reasonable profit for yourself rather than trying to establish market share when you don't have enough, supply to even take care of your current customers.

[00:24:58] HOST: In other words -- don't talk a big talk [00:25:00] if you're not prepared to walk a big walk.

[00:25:03] EDWARD: So that's something that is a common trap that people fall into. Another issue it needs to be thought about. And this happens particularly with, um, clothing startups, is what happens if you get returns, what do you do about it.

[00:25:18] HOST: Right! I had forgotten about the whole issue of returns -- another X-factor to contend with in your supply and demand balance... affecting everything from cashflow to storage, I'm guessing -- and very difficult to predict.

[00:25:30] EDWARD: And I'm going to tell you, there are no really easy answers, but it's worth thinking about that ahead of time, what you're going to do. Couple classic examples of companies that decide that they're gonna offer more size alternatives than other companies and they were online and they were just destroyed by the fact that there were so many shirts and blazers and so on being returned to them. There's other companies that've had product defects, which cause returns, [00:26:00] but I mean, it's kind of obvious in some way you wanna make sure there's good quality going out, but you do need to think about returns. If you're in that type of startup where you might possibly be dealing with that sort of thing. Also cosmetics, hair care, that's vulnerable to returns as well.

[00:26:19] ANDREA: What are the first three things to think about when it comes to supply and demand logistics?

[00:26:23] EDWARD: Oh, believe it or not. Usually what I start doing is I actually figure out, I tell my students, okay, what do you need to actually build your product? And just draw up okay, what's our value proposition? Who's gonna buy it? Um, what is the product gonna be? What are the channels, are you gonna sell it online? You're gonna sell it through a distributor or what have you. So that's one side and then the other side is okay at a high level, how much is, are we going to try to build ourselves? How much are we going to have somebody else build it for us? And we just pay a premium on, and if we're gonna build, usually the answer is, yeah, we're gonna buy some and yes, [00:27:00] some we're going to build ourselves and we have to figure out which parts roughly speaking. And we also have to figure out what kind of people do we need in our organization? Clearly you want somebody on board who understands how to design the product even if it is designed by somebody else. They have to know enough about it so that they can specify what you really want, um, going from customer needs. Trying to explain that to people who are going to produce it for you is not immediately obvious. And there's loads and loads of companies who die doing that. And then there's another person who has to be brought in, which is somebody who actually understands manufacturing and they don't necessarily have to be a founder. There are people who actually consult and do this for you.

But you don't have to be an expert in everything, but it's good to know a little bit about what you're doing in everything. Right? Do really take a look at the parts that you're going to be using to build their product, understand where they can't come from and what the risks associated with that are. [00:28:00] You may decide for example, and this has happened that you're dependent on a real rare type of specialty chip from say Malaysia, and you may find out, well, I could actually substitute a much more common chip that I could buy in three different continents. And you're not going to know that unless you go in and dig into your supply chain a little bit. So last commandment is know your supply chain.

[00:28:25] ANDREA: The whole process of figuring this out can be overwhelming for aspiring entrepreneurs or small business owners. So this has been very helpful. Thank you for your insights.

[00:28:35] EDWARD: You're welcome.

[00:28:39] HOST: That was Supply Chain Professor Edward Anderson from the University of Texas. As I said, the logistics of supply and demand -- especially in the ramp up to the holiday period -- can be a little intimidating. But what I learned today thanks to August and Professor Edward is:

  • Figure out what you need in order to build your product. And follow that [00:29:00] by determining how much you will outsource to build it and how much you will try to build yourself. It helps to know your product from the inside out. Understand who it’s for, why they want it, what it's made of, and how you're gonna get it to them. You need to know where every part of your product is coming from. And since as small business owners we sometimes wear many hats, figure out who you need to have be part of your business that understands manufacturing or that you can consult with.
  • When starting out, it’s difficult to forecast spikes in demand. You can look to similar products and figure out when their high season are. But be prepared to learn as you go and sometimes even make mistakes, like with August and his CPC. You can try as you might to mitigate risks but part of being a small business owner is learning as you go as well. Some ways August mitigated risks was by determining a good quantity that you can learn to begin with and not manufacturing oversees and seeing how he could keep manufacturing [00:30:00] as cheap as possible while not jeopardizing the quality of his product. August also recommends working with warehouses that are flexible to your needs when you’re starting out because you’re able to catch mistakes and fix them right away.
  • Once you have a couple of years under your belt, it gets slightly easier to learn about demand in your product. August keeps an excel sheet that has his monthly sales throughout the year. This way he’s able to look back at previous months and see how they stack up against years prior and average it out. He suggests that the sweet spot for forecasting is when you don’t have a lot of storage costs after the seasons of spikes for your products while also making sure you’re not running out of inventory during those seasons. Start by calculating how much money you would lose due to storage fees if you over index.
  • When it comes to leveraging demand, make sure your product is in front of your audience’s eyes, way before the season in spike happens. August does this by working with influencers [00:31:00] who like Fort Boards about 6 months in advance.
  • Anticipate returns. They happen. Figure out what you'll do when they start coming in. Keep track, and adjust your numbers going forward according to the rate of returns you're getting.

If there’s something we’ve learned on This is Small Business so far is that small business owners learn a lot as they go. So, maybe, after all your work, you might still run out of stock. And that’s ok! You learn, iterate, and keep going every time.

All great lessons to add to my small business playbook. I'm excited to see this stack of good ideas getting bigger and bigger. Here's wishing you all the best this holiday season. And as a gift to us, please help us get better and let us know what you think! You can leave us a review on apple podcasts -- or email us at thisissmallbusiness@amazon.com.

Next episode will be a special one. We’ll be doing a season one recap of our favorite key learnings for starting, building, and growing your small business. [00:32:00] So don’t miss out on this exciting season finale.

Until next time – This is Small Business, I'm your host Andrea Marquez -- Hasta luego -- and thanks for listening!

CREDITS: This is Small Business is brought to you by Amazon, with technical and story production by JAR Audio. [00:32:35]


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