Sales Promotions with Limited Inventory and Robust Sales [/r/marketing x-post]
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Sales Promotions with Limited Inventory and Robust Sales [/r/marketing x-post]

Hello /r/smallbusiness. Long time lurker, first time posting. If you follow the marketing community, apologize if you're seeing this twice.

Little background: I am the sales and marketing manager of a small business at a lake shore equipment business--both new product sales and service. I graduated with a B.S. in Marketing and Sales. Landed at a typical small business gig, where a few people wear many hats. When I started we were under two roofs doing about 1.5MM in revenue each. Then i got the opportunity to transition the two locations into one large showroom. Then the volume got turned up. We've been tacking on about MM in sales for the past three years, and attracting some awesome vendors along the way. We've had an incredible past few years, and I can honestly say I am happy to have been along for the ride.

Current situation: Every year we have an annual meeting were i sit down the office manager, service manager, and business owner--they coincidentally happen to be my trusty sales staff as well. This is where I lay out our rough Marketing Plan for the entire fiscal year.

Now mind you, being a seasonal business, we go from having a fair amount time to sit down, have a civil conversation, and think about our direction To running around with our heads cut off, trying to find enough hours in the day to capitalize on all the opportunity. For about 4 months out of the year our two phone lines ring almost non-stop the entire time we are open.

This year has been exceptional. In fact this is normally our quiet time. But the phones have been ringing fairly steady, and we have pre-orders for this season already that are on pace to see a 35% growth in sales.

As I'm approaching our 2021 marketing plan, we normally offer a "preseason discount" to motivate our new product customers to pull the trigger before we are in season to better manage our work load in peak times and spread the love throughout the year--while sacrificing roughly 5% margin with this trade off. It has worked very well for us the past few years.

We typically buy bulk inventory, roughly 65% of forecasted sales volume, on a preseason order from our largest vendors at a special price that helps recoup our promotion costs. But a couple of our vendors are telling us that their preseason orders are up 300%-600% and their gross production is having a hard time meeting that demand. Essentially their will be no reordering available this season--if anyone works with BRP/Sea-Doo's 2020's supply chain network this will sound familiar. This in turn caused us to bump our orders up to 100% of forecasted COGS. (Insert obvious supply chain whiplash here)

My question to you: Am I stupid for still offering a preseason discount if inventory is going to be limited? Is anyone else in the dealership game hearing similar chatter across other industries?

Additional note: i am reaching out to my online community because our local competition is fairly incompetent (maybe 20% of our sales volume) and don't specialize in our niche--they are boat dealers with a lot wider product offering.

submitted by /u/Jesusfisherman
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