Too much demand

Believe it or not, having too much demand and too little supply for a product or service does happen, and it can be extremely negative when it does. There is a designer blinds and plantations company that I know who have had this problem in the past, and luckily, they contacted me because they were very close to going bankrupt.

The easiest and worst thing that you could do when you realise that you do not have the supply to keep up with demand is to mass purchase the product or mass hire for the service that you are offering. It’s easy to forget that the increase of demand may come from what we would call a “trend”, where you will be popular for a temporary period before you go back to where you were.

That is why it makes more sense to ensure you either just about have enough supply to reach the demand, or you are always unable to fulfil every order. Bulk purchasing a mass amount of products that will no longer be in demand the next day means that you will be sitting with 1000’s of products within your inventory with no space or money to store them, and no way to shift the majority of them.

However, if you are smart, then you will make sure that you only ever purchase on a just-in-time model, where you will always just about have enough to service customers. Only ever purchase a product or hire for a service after the order has come in. It means an additional waiting time for the customer, but it means hundreds to hundreds of thousands saved because you didn’t immediately panic.

In this case, it will mean doing your very best to not be greedy or over organise and over plan. It may go against everything you know as a business owner, but in the end it could be what saves your business.

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