Navigating Year-End Home Staging Inventory Challenges and How to Tackle Them

As we are fast approaching Halloween, this is the perfect time to start thinking about planning your home staging inventory for the next year! This way, you can refine your inventory buying and management strategies to optimize the performance and operations of your home staging business. When you understand how to manage and buy staging inventory effectively, it’s going to help you everywhere in your staging business, especially when it comes to dealing with Q4 challenges. Nailing your inventory game will help you streamline your home staging business operations and boost the profitability of your staging business. It is also critical to staying competitive and relevant in your market.

Here are some questions to ask to evaluate your home staging inventory this year:

• Did we buy efficiently?
• Is there anything we bought that did not hit the mark for us? That sat in the warehouse for way too long?
• Is there anything we bought that worked very well that we should buy more?
• Is it more profitable to buy or rent inventory?
• How much inventory do we own now? Do we need to expand or minimize?
• Are there any particular pieces that get damaged all the time? Is it because they are not maintained or wrapped properly for transportation?
• Are there any items that are outdated or no longer in demand?
• Have we received any positive or negative feedback from our clients about the quality/ style/ look of our inventory?
• Are there any specific furniture pieces or accessories that clients frequently request?
• Have I kept track of the inventory turnover rate to assess the popularity and profitability of certain items?
• Is my inventory organized and easy to manage?
• Are there any new, trendy pieces that I want to add to my inventory for the upcoming year?
• Will we need to expand our team and/or warehouse to accommodate our growth?
• Have I set a budget for purchasing new inventory items for the upcoming year based on market trends and client demands?

Here are three critical areas for you to consider this quarter to optimize your staging inventory.

1. Budgeting for Your Staging Inventory

Effective budgeting and money management are the foundation of any successful home staging business. Knowing and understanding your finances will help you make intelligent, informed, and strategic business decisions for your staging business.

It’s important to chat with financial professionals to learn a comprehensive understanding of your business finances so that you can set realistic budgetary goals. You also want to evaluate how to buy to maximize your profits.

One of the misconceptions about buying wholesale is that it is cheaper to buy wholesale. But actually, depending on what you buy, buying wholesale is not always cheaper than buying retail. When we operated our staging business, we bought a mix of retail and wholesale.

For larger pieces like furniture, it is usually cheaper to get them wholesale since the markup on furniture is at least 200%. For rugs, I have heard from reps to be as high as 1,000%.

For lifestyle and home accessories, we usually bought retail. When you buy wholesale, you usually have to reach a minimum for your order. That can be $X or quantity. With accessories, that’s generally quantity. For example, a case of vases. But a case could be 6, 12, etc. of the same vases. We didn’t need 12. With furniture, we want something classic that we can use for as long as we can. With lifestyle and home accessories, we want things that are on trend.

Here are some questions for you to consider:

• Did our inventory purchases align with our goals for our staging business?
• Did our inventory this year align with our signature style/ lookbook?
• Can we be more strategic with our inventory purchase so we are investing more efficiently? Is it better to buy at retail or wholesale? Or to rent instead?
• How well did we juggle between our forecast and actual project demand for our inventory?
• Did we monitor the inventory turnover rate to avoid things sitting in the warehouse and not making money?
• Did we run into an inventory shortage problem? Was it an external issue like wholesale furniture getting stuck at the border? Can we deal with that by finding local manufacturers or partnering up with local furniture stores in case we are short and have staging projects to fulfill?
• How did we do with the storage and maintenance costs this year?

Considerations like this are important. At the end of the year, you can look back at how your inventory performed this year and gauge its profitability.

CFO Danielle Hayden gave an Expert Talk on the Renting vs. Owning Staging Inventory. As a Stagers’ Adventure Club member, you can catch up on the replays for free. Find out more information here.

2. Streamlining Your Moving and Maintenance Processes

Q4 often brings a surge of returned inventory that requires maintenance, which can include getting rid of inventory that is old, outdated, or damaged. This is where you will be putting your warehouse and your workflow to the test. By developing efficient processes to streamline your workflow and organization, it will save you valuable time, effort, and resources.

If you have team members, this would be a great time to sit down and chat logistics to see what some of the day-to-day workflows can be improved and tightened up:

• How often will we retire inventory? When? Do we host periodic warehouse sales?
• How often is maintenance and cleaning needed on the pieces? Is there a standard we can use to assess the condition of all the furniture and accessories for maintenance?
• Do we have a detailed inventory checklist to keep track of all items during the moving process?
• Can we streamline the packing and unpacking process better?
• Do we label all boxes and furniture pieces clearly for easy identification during transportation and unpacking?
• Do I have a system in place to document any damages or issues that occur during transportation?
• Can we leverage technology, like barcode scanning or inventory management software, to streamline the tracking and movement of our inventory?
• Do we have reviews scheduled to look over our existing standard operating procedures (SOPs) related to moving, staging installation, and workflow?
• Does our current organization allow for easy access and efficient management?

By optimizing your moving and maintenance processes, you can maximize the lifespan of your inventory and the sanity of your team, especially when you are slammed during the busy season.

3. Maximizing Space in Your Warehouse

With the year-end influx of inventory, we know a headache may be coming soon! No matter how busy or slow the season is, it’s always crucial to maximize space in your warehouse so you can work efficiently.

This is the time to review your workflow and see how you can optimize your warehouse layout, traffic flow, and storage systems to make the most of the available space and the best route for your inventory to be moved in and out of the warehouse.

You also want to implement smart organization techniques like:

• Categorizing items: For example, we had a pillow room where we organized the pillows by colors
• Utilizing vertical storage solutions: For example, our warehouse was 14′ high in the front and 18′ in the back, so we built metal rackings and a mezzanine to maximize the storage space in the warehouse. We also used vertical shelving as much as we could.
• Creating clear pathways for easy access.

Here are some questions for you to ask:

• How efficiently are the items organized in the warehouse? Is it a fairly quick and easy process for packing out and restocking?
• Are there any unused or underutilized areas in the warehouse that we can do something about?
• Can the layout of the warehouse be optimized to eliminate bottlenecks and improve flow? For example, one of the common bottlenecks for stagers is rug storage or mattress storage.
• Are there any opportunities to implement vertical storage solutions, such as mezzanines or racking systems?
• Are there any items that can be consolidated or grouped to free up space? For example, in our warehouse, we had zones within each zone. In our accessories room, all the accessories are categorized by type (living room accessories, kitchen accessories, bathroom accessories, etc.) and they live on designated racks (living room rack, kitchen rack, bathroom rack, etc.).
• Is there anything that is just deadweight? They rarely go out or are very awkward to store.
• Do we need an inventory management system? Or if we already have one, can we leverage or tweak the system to optimize storage space?
• Do we need additional storage equipment, like pallet racks or shelving units?
• Are there clear walkways and paths? (Health and safety is very important! Especially if you are in a commercial warehouse space, it may be a city requirement to pass fire inspections.)

By maximizing your warehouse space, you can improve efficiency, reduce clutter, and ensure smooth inventory management. Being able to see clearly what you have and what you will need, will also help with buying so that you are not buying things you already own. Most importantly, when you have an organized warehouse where you can see your inventory clearly and access it quickly, this will also protect your valuable resources and the sanity of your team.

As you wrap up another wonderful and eventful year in the home staging industry, we want to encourage you to take proactive steps to tackle your year-end inventory challenges. They may look like a lot of busy work, but this is essential for maintaining a thriving home staging business. When you can operate efficiently, it will help with the productivity and profitability of your business, you will be able to serve your staging clients better and enjoy your work more, which is crucial in today’s competitive real estate market.

By budgeting effectively, evaluating your buying decisions, figuring out renting versus buying, streamlining inventory moving and maintenance processes, and maximizing space in your warehouse, you’ll be well-prepared to conquer any obstacles that come your way. Remember, successful inventory management sets the stage for success in the year ahead!

Lastly, Sonya MacDonald, a seasoned home stager and the Home Staging Coordinator for Lori Pedersen Home, one of the top home staging companies in Canada, will be speaking in our November Expert Talk. To find out more about her talk, Tackling Q4 Home Staging Inventory Challenges, click here for more info.