With the holiday shopping season underway (e.g., October 10 according to BRG, and Amazon Prime Day on October 13), small businesses should be sure to have their holiday sales strategies in place. Due to the pandemic, no one knows how this season will shape up compared to prior years. Deloitte’s annual holiday forecast shows sales increases of 1% to 1.5% this year, but there’s still so much uncertainty. Don’t let uncertainty paralyze your holiday sales planning and activities. Certain actions should be taken to optimize revenues.
Review online sales venues
Small businesses have learned from the pandemic that they can’t rely on bricks-and-mortar operations; they must have an online presence. Check shopping channels to be able to attract customers from a variety of places, including:
- Your own website
- Shopping platforms (e.g., Etsy, eBay).
Double check inventory
What do you have on hand now and what are your anticipated needs for the shopping season? You don’t want to have too much on hand (it costs you to buy and warehouse inventory) or too little (it costs you disappointed customers if you can’t fulfill orders immediately). Some of your vendors may no longer be in business, so check available channels.
If your inventory items are likely to go out of style or become obsolete, make plans now to take action that will allow for a tax write off. If you can’t sell inventory at normal prices (which includes sale prices to customers), you can take a deduction if you liquidate it (e.g., including selling to a remainder business), donate it to a tax-exempt organization, or abandon (destroy) it. Note that different rules apply for accounting purposes under GAAP rules.
Implement your marketing strategy
Now’s the time to put your marketing efforts into play. This includes plans for pricing, sales, advertising, and social media exposure. Factor in the demise of some competitors who were unable to withstand the economic downturn as well as the cost of free shipping (which customers have come to expect).
If you haven’t done so, review your marketing budget now. It may pay to invest more in this effort if you can to increase revenues.
Check sales tax obligations
If you’re selling to customers in other states, you may be subject to sales tax obligations on these remote transactions. Most states have implemented rules requiring remote sellers to collect and remit sales tax on transactions with their residents. However, there are “small seller” exceptions that may exempt you from sales tax rules on remote transactions. Avalara has a map that you can click on to find the sales and/or transactions threshold for sales tax responsibility on remote transactions.
Final thought
Kurt Weill’s September song lyrics remind us to make haste if we want a winning holiday season:
“But it’s a long, long while
From May to December
And the days grow short
When you reach September.”
You may want to keep an eye on the Christmas Countdown Clock through the peak of the holiday sales season.
