Any distributor or wholesaler will agree that stock is at the core of all business processes, it's what defines your business and your success. As a distributor of bearings, stocking the right products can be a complete minefield.
A big part of good stock control and inventory management is purchasing the right stock to ensure you maximise time and money.
Holding money in stock you can't sell or regularly running out of stock of popular items will affect your business reputation and your profit margin. Taking control of your purchasing decisions will enable you to buy, hold and sell the bearings that will ultimately make you profit. The challenges you need to avoid are:
Not having the products your customers are searching for in stock or not having the correct style and type of bearing your customer needs could harm your business reputation. You need to consider two categories - do you have products regularly on show in your eCommerce store that are often out of stock or, are you regularly asked for specific products that you never stock? Both scenarios mean your customers are let down by your service and are persuaded to look elsewhere. Once your customers' loyalty is questioned, they're more likely to rely on your competitors to supply them the stock they need.
Too much stock of redundant or unpopular products ties up precious space in your warehouse, therefore tying up cash too. Ultimately, you want to avoid purchasing stock that you'll struggle to move, as it'll take up room in your warehouse that could be used for your best sellers and it means you're likely to sell those items at a discounted rate to move them.
Are you basing your stock figures and trends on gut feelings and guesswork? Even with the best knowledge of the business, guessing stock trends can be difficult, especially for bearing distributors because your products are often similar and can sometimes only vary based on the manufacturer. It's important to outline stock forecasts and buying trends but it can be irrelevant if the data isn't accurate. This leads to the above two problems of under or overstocking.
Your stock may be at the core of your business, but data should be your most vital asset. But not any data - accurate, reliable and accessible data that will ensure you're running a seamless operation.
Business Intelligence tools give key insights into your business processes including customer order history, buying patterns and best-selling products for you to make purchasing decisions based on accurate and reliable data.
You no longer need to make assumptions on which product to buy when you have accurate data to base your decisions on. Company reports give you complete visibility on what products are your best sellers, what your customers regularly buy, which items have the highest profit margins as well as highlight potential sales opportunities that you could harness for improved customer spend without the need for attracting new customers.
TB Davies, prof.ITplus users for 5 years explain that, Our staff now base decisions on factual, accurate business data, rather than best guess' or intuition. In our purchasing department stock modelling has improved greatly because of the ease in which reports can be run by the team, in turn the availability of products to customers has improved.”
Trends and stats can be continually monitored so you're never left behind and in the dark. Consumer habits change, so continually monitoring your sales is key to staying ahead of the competition.
Truly understanding your customers, so you can predict their behaviours, will ensure you stay ahead of the competition. Know what they could be buying from you and be sure to market those products to your clients to take advantage of up-selling and cross-selling opportunities. Similarly, find out what customers used to buy from you to understand why they stopped and how you could win back their business - has a new manufacturer become the most popular choice or do your customers now have a preference over UK made products?
Profiling your customers based on business type can also be key in purchasing the right stock. Get to know what your customer, who are end users, usually buy as well as other distributors and manufacturers so you have better understanding of who your customers are.
Multi-channel selling is the growing trend for B2B wholesalers and distributors across every industry, so if you're not already selling on your own eCommerce website and through online shopping channels then you're likely to fall behind the competition. But selling across multi-channels does comes with its own challenges.
When evaluating your purchasing habits, it's important to consider all your channels individually in order to get your stock right for each avenue. You may sell more of one type of bearing on eBay than you do over the phone and you may notice a spike in sales for products vary across the channels.
Looking closely at your channels will also highlight opportunities where you can push certain items for optimum success. For example, it's typical your end users will buy from eBay so it's worth knowing what to sell and advertise to your end users on eBay. You may also find you can easily shift what you assume to be dead-stock on eBay to consumers you may not normally interact with.
Consider your audience for each channel, analyse the sales reports from each channel and plan your purchasing accordingly.
Using a reporting tool to gather historic information from your customers and sales orders will give you accurate data to make predictions for the future which will inevitably help you stock the products that will give you the best reward. Avoid taking up precious warehouse space with stock you can't shift and concentrate your purchasing on items your customers need. Improve customer service, save money and become an efficient bearing distributor.
