For example, let's say you sell ten non-seasonal widgets a month and that all ten fill an area of about six cubic feet. Now, let's say your vendor is offering a promotion of 5% off, if you order 100 of these widgets and take delivery now. Before you say "yes" to this deal, you need to figure out if the 5% makes up for the cost of storing the extra 90 items. You also need to make sure that this deal won't tie up cash that you would rather spend on something else. I had this point hammered home myself just yesterday when I found a 500-count box of 6x9 envelopes. I admit that I probably approved that order, but I clearly wasn't paying attention, because we probably use less than 15 of these a year! So, no matter how good of a deal we got, it was a poor use of cash flow—and the box has been taking up precious shelf space for months.
Seasonal items are more difficult because they change every year and you have a small window in which to sell them. Before you place an order for seasonal items, look at how similar types of items sold last season and what sizes sold best. Place as small of an order as you can unless you know in your heart that it is a winner. You hate to be in a situation where you are missing out on sales because you've run out of stock, but that is better than having to discount merchandise below cost to get rid of it.