Seasonality In Business

When you think of seasonality, you might think of hunting or fishing season.  Maybe you think of the seasons of the year such as Summer, Winter, Fall, and Spring.  Or maybe you think of seasons of life.  But business also has seasons and there are two kinds.  One kind of season has to do with the business cycle when you have boom times and bust times, or growth and recession.  The best time to start a business is at the end of a recession as the economy is starting to grow again, because weaker businesses tend to vanish during recession and because there has been pent up demand that is starting to be released.

The other kind of seasonality in business has to do with yearly cycles in sales.  For instance, winter coats sell best as winter is starting to set in.  Winter coats don’t sell well in the heat of summer.  Most retail products have selling seasons with the most common being the Christmas selling season.  That is the pinnacle of all seasons with people buying gifts for others, and most products are impacted by gift giving.  There are exceptions to this rule so you must really know your product and perhaps gather data over a couple years to really know for sure when it sells the best.

Why is it important to know when your product sells best?  Advertising for a product outside of a selling season is like trying to run against the wind.  You might move a bit but you are going to have to put in a lot of effort, resources, money, etc. to get it done.  Now if you are selling during the product’s busy season, it’ll be like running with the wind, you will find it much less effort to sell.  So your advertising dollars are best spent during or just before the product’s busy season.

Another reason that knowing the product’s busy season is important is that you will be impacting your customer service if you run out of the product at the right time, so you may need to stock more during the product’s busy season than during the off season.  One of my clients doesn’t have the warehouse space to keep a full stock of all items so they use seasonality to stock the right items at the right time and only use the warehouse space needed.

Do you find it really really difficult to sell your product and you are thinking about giving up?  See if your product has a season and make sure it is the right time of year for your product.  You may also want to check the economic climate and see if that might have an impact on your product sales.  We find that we get flooded with orders for our gourmet baking goods line towards the end of the year but orders trickle in during the rest of the year.  If we gave up when things were slow, we might miss out on the end of year sales.  By contrast, many people try to lose weight or start a business after the first of the year, when they make their new year’s resolutions.  If you are selling a weight loss product or business opportunity, you might want to see how you do early in the year.

Do you notice any interesting seasonalities with your product?


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