As a third party logistics (3PL) provider, Kasia Wenker of outdoor and cycling industry specialist ITS Logistics often stresses that quality is more important than quantity. Having a multitude of products on the floor doesn’t mean that there will be a multitude of sales. Products and services that are tailored to your customers’ needs will result in more DPT than sheer number of product.
Here are 6 easy things retailers can do, today, to meet those objectives:
• Inventory control. The general 80/20 rule means you need to stay on top of what’s selling to best manage inventory.
o Measure your inventory against the units you sell
o Figure out how much stock you have in terms of weeks of sales
o On-site stock for slow moving products should be reduced to a minimum. It is taking up valuable space and tying down your cash.
o Keep inventory on hand only for high movers
o (3PL advantage): Real time inventory management is key, which is where a 3PL increases efficiency, allowing you to manage inventory from a remote location. This technology also allows a 3PL to analyze order data, manage assets and provide guidance to retailers about high and slow movers.
o Develop a way to forecast inventory, and measure the accuracy of the forecast
o Determine how much stock is on hand, and how much has sold in the past week
o Measure success, and change estimates accordingly
o Shorter the time increments are better – weekly or monthly stock assessments – to react quickly, better serving customers needs
o (3PL advantage): A 3PL keeps retailers up to date with stagnant inventory so you know when to cash it out
o Develop relationships with suppliers to work together for mutual gains. This can include the oversight of supplies of high movers to avoid out of stocks, and/or working together against manufacturing errors, so you don’t get caught holding the wrong product.
o Discuss consumer trends
o Give incentives based upon performance metrics, such as shipment speed.
o Track accuracy of orders. Service should be perfect and fast for out of stock products or slow movers.
o Ensure needs and expectations are understood,
o Understand suppliers’ capabilities so you can leverage them.
o Agree upon a standard timeframe for shipments, and
o Demand a high accuracy rate.
o (3PL Advantage): Let a 3PL focus on their core competency-–fulfilling your shipment quickly and accurately at a low-cost rate—freeing up your time, so you can focus on what you do best.
o If you have slow movers that are taking up cash and space, you need to reinvest
o Create a budget plan for markdowns, and a plan for execution
• sell at reduced cost
o Same applies to returns: if you can’t resell them at full price, move them
o Work with customers who make returns, to find out why they aren’t satisfied and what you can do to prevent it in the future
o (3PL Advantage): A 3PL can handle returns and liquidations, so retailers don’t have to add more to their plate
o Place inventory closer to your customers
o Select a location that offers optimum service to your customers so that their shipments are expedited and low cost
o This will help you process returns faster too
o (3PL Advantage): 3PLs often have warehouses all over the country, and should be able to offer a convenient location, or find one for you.
• Supply Chain Visibility.
o Keep track of product availability, so you’re not caught off guard when supply runs low
o Prevent backorders and customer dissatisfaction by talking to suppliers far in advance if you have forecasted needs
o (3PL Advantage): 3PLs can alert you when supply is running low, and expedite the process of getting new product to the store.
ITS Logistics: http://www.thesportsrunner.com
Online Press Release: http://www.pitchengine.com/
About ITS Logistics:
Based in Reno, NV, ITS Logistics is a warehousing, distribution and fulfillment company that helps companies distribute goods nationally and globally with superior performance. Please visit http://www.thesportsrunner.com for more information or a free consultation.