The yearly buying frenzy that is peak retail season is just around the corner. But vendors are facing additional pressure this time around as they seek to get rid of all of the excess inventory sitting in their warehouses.
Companies typically bulk up their supplies to ensure they can meet increased demand ahead of Black Friday and Cyber Monday, which arguably mark the unofficial start to the holiday shopping season.
This year, inventory levels hit a record high in February and have slowly dwindled over the year, but ahead of the busiest months of the year are still elevated above average.
Chris Randall, senior vice president of Freight Club, an all-in-one freight shipping platform, attributes the excess inventory companies find themselves with now as an effort to avoid the product shortages consumers experienced due to the COVID-19 pandemic disruptions.
“I think a lot of the big vendors, the ones that had a lot of cash to pull it off, preordered a lot of inventory to ensure that didn’t happen again this year,” Randall said. “The flip side of that is some of the smaller to midsized ones did the same thing.”
This excess inventory taking up warehouse space can be a costly burden for many when the demand isn’t there. Luckily, the holiday shopping season is an optimal opportunity to get rid of a significant amount of these extra goods.
The catch, though, is that everyone is facing the same situation at the same time: How are they going to move all this discounted inventory during the busiest time of year while maintaining profitability and high customer satisfaction?
Vendors tend to work with just a few carriers in order to leverage volumes to get the best rates, but this route may be limiting their business.
During November and December, individual carriers face greater demand for their delivery services. This means capacity from the usual carrier partners is not guaranteed, and it can quickly get costly once carriers reach their capacity.
“There’s a bit of a fight for some of the capacity and prices can go up. In some cases, they may not be able to send as many trucks,” Randall said.
More trucks on the road and more goods being shipped inevitably leaves room for a greater number of damages and slower delivery times too. All these elements combined ultimately threaten the bottom line and customer experience.
In times of such high volumes, and high stakes, Freight Club offers vendors much-needed flexibility.
Freight Club leverages the volume of all clients in order to get the best rates from its network of more than 30 well-known carriers so shipments can quickly be arranged at reasonable prices. Randall describes it as a “release valve” for volume overflows.
“When prices go up to a point where vendors are starting to lose profit, the ability to quickly look at an alternative option without having to take all of their volume there is actually a big asset,” Randall said.
Tapping into Freight Club’s carrier diversity gives vendors access to a range of delivery options, including specialty white glove, national, localized final mile and traditional less-than-truckload. Freight Club finds out what carriers are good at and holds them accountable.
“We try to make sure that from a performance perspective, we know who the carrier is. We understand what their strengths are and weaknesses are and we try to articulate that constantly to clients so they can make smarter choices,” Randall said.
With so many orders during peak season, the added work can have internal teams working overtime just to keep up. Freight Club removes one worry from retailers’ minds by taking care of the claim filing process and customer service, helping them save money on labor costs in addition to shipping savings.
“We’re trying to provide as many services as possible for our clients in order to create ease,” Randall said.
Freight Club comes with no fees and can be implemented immediately without the need for integrations, making for a low barrier of entry and a low-risk way to enter peak season confidently.
“Freight Club’s relentless pursuit of a great customer experience lasts well beyond peak,” Randall concluded.