Quote:
Originally Posted by jesgen
I used to manage a store for Tandy Leather Co. In fact during my couple years with Tandy I was awarder the "manager of the year" award.
Anyway I learned inventory control when I worked for Tandy. Each store was allowed so many dollars for inventory. It was not very much. A store could have more inventory if the store's monthly sales were equal to that amount. To stock everything that was in the catalog one could not stock up on any item. The secret to having everything in stock and staying under the dollar amount allowed was frequent orders. This kept the inventory low and prevented having a large inventory of items that did not sell. Lots of times items ordered were out of stock. Frequent orders allowed items that were shorted on previous orders to be reordered in a shorter time interval. In short order what you are going to use is a certain time period (weekly, biweekly, monthly). This will help you spread your precious dollars out where they are needed instead of being tied up in a few items that just set around and collect dust. Also you don't have to come up with a place and way to store all that extra stuff. You may pay a bit more in shipping and may not get the best prices, but you will still come out dollars ahead because you will have what you need and are selling.
Jerry
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There's no universal guideline that will always be applicable. It's usually best to minimize your inventory but how much to minimize depends on how much that either reduces costs or increases sales. Many pro artisans have learned that large infrequent orders allow them such significant savings that doing so is much better then frequent small orders. Assume nothing until you do the math. The currently incredibly low interest rates on credit line loans are such that it's not unreasonable to buy a year's supply ahead. Doesn't it make sense to pay 8% interest when it allows you to buy for 50% (or more) off? I supply several dozen artisans that routinely order 3 months supply each time. They tell me that it's not just the cost savings that's appealling, but as much the assurance that everything they need is available when they need it - not when their supplier can supply it.