Quote:
Originally Posted by Dennis Brady
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.
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Dennis Yes there is no universal guideline! The basic guide that I outlined is just that, a basic guide. There are always other factors to stir into the mix that really makes things messy. If a color of glass one uses a lot of is not always readily available it would be unwise to not stock up when it is. If one can get a very very very good price on items that are used a lot it should not be passed up. If shipping time is going to go from 5 days to 30 days that has to be taken into account. If there is a period of the year when suppliers are out of a lot of items all the time that has to be taken into account also. To invest lots of money in some merchandise and left too broke to buy other needed merchandise also is not wise. There is a line and a good inventory control person is always looking for that invisible line.
Jerry