Maintaining a supply chain for holiday retail

Chocolatier Sarah Dwyer has been preparing since August for the next couple of weeks of winter holiday retail.

Dwyer operates Chouquette, a small-batch artisan chocolate business, in Bethesda, Md. Three days a week, she runs a storefront at the Montgomery Farm Women’s Cooperative Market, and the other four days brings her sweets to local farmers markets, private events and wholesalers.

Winter holidays are close to Valentine’s day in chocolate sales for Chouquette, Dwyer said, and this year she anticipates selling three times as much chocolate she did a year ago. She believes more consumers are looking for “ultra-local” gifts this year.

One of Dwyer’s biggest challenges for the season is maintaining her own inventory of supplies.

When she left her banking job two years ago to start Chouquette, Dwyer was used to having a well-stocked office supply closet. Today, she said, “if I run out of labels, I can’t just go to the supply closet” — instead, she has to order them from a distributor.

During the holiday season, she said, an order for boxes or labels that would normally take a few days could take weeks — so she’s been placing periodic orders for the past several months to make sure she’s prepared for her busiest sales time. She had wanted custom boxes for the holidays, but the manufacturer “laughed” at her when she requested it arrive in less than the six weeks they said it would take.

Instead, she’s been ordering cases of generic boxes and shipments of raw chocolate. “I never like to have less than 200 pounds of chocolate at a time,” she said. She’ll likely blow through 500 pounds in the next couple of months, she said.

Being beholden to outside suppliers during the holiday season is frustrating, Dwyer said, because she can’t make last minute adjustments to the size, appearance or quantity of the orders. She sells different sized boxes of truffles, but can’t be sure which will sell better and often ends up with unused inventory, she said. She feels she has more control over the actual chocolates she sells, which she produces every few nights in her kitchen along with a staff of five. On a good night, she said, she and her staff make 2,000 chocolates.

For the past few months, Dwyer has been collecting analytics on Square Register, an iPad app allowing small businesses to charge customers using an attached credit card reader. Square collects and compiles data from each sale, and Dwyer has been closely analyzing the sales figures to prepare for the coming weeks.

For example, she noticed dark chocolate was selling better than milk, but wasn’t sure by how much until the analytics confirmed an 80-to-20 percent ratio of dark to milk chocolate sales. As a result, Dwyer decided to only craft dark chocolate caramels this holiday season.

She’s also looking to analytics to determine how much more chocolate to make each night — though the coming weeks will likely be busier, her sales have already increased. In the past three weeks, her average sale has almost doubled and the units per sales have gone up, she said, noting that such an increase is normal for retailers this time of year.

On an average Saturday during her off-season in say, September, Chouquette makes about 25 to 30 sales, averaging about $20 each. This past month, Chouquette has averaged 60 sales on a Saturday, averaging $32.

Despite her flexibility in production, Dwyer is most worried about staffing for busy production nights. She had wanted to hire more staff for the coming weeks, but received little response to a Facebook ad she posted.

“I would love to hire someone else, but I needed to do it two months ago,” she said, explaining that it takes several hours to train someone to produce chocolate, and the extra time she’d have to spend during her busiest season isn’t worth having another set of hands.

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Mohana Ravindranath covers IT and small business for the Washington Post and its weekly Capital Business publication.
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