The 2020 Mid-Year Economic Update_long

Don’t Confuse Reducing Customers’ Inventory with a Reduction in Profit

With effective inventory control solutions there will be less waste and less shrinkage but more opportunity
3d illustration of hundreds of cardboard parcels lying on a heap

Reducing inventory for your customers is a good thing. 

Now, read that again and this time, let it sink in. Your customers share a common goal. That goal is to run a profitable and successful business and often, that requires maintaining optimum inventory levels. Rather than purchasing the items they need to operate through a big box store or exclusively online, they choose you. 

Today’s customers are savvy and have certain expectations when it comes to their purchasing experience. They expect competitive pricing, guaranteed availability and lightning-fast delivery. Those expectations aren’t taken lightly. Either your products and services will fit the bill, or your customers will look elsewhere. 

It’s time to think bigger and put your customers first. Look at what your competitors are doing, and you’ll see that offering value-added services such as industrial vending and inventory control solutions is quickly becoming table stakes. If you’re looking for a way to compete, offer value to your customers. One way to do that is to help them reduce unnecessary inventory purchases and therefore waste; then capture additional spend in other areas. 

It’s a common fear among distributors that by offering vending as a service they will lose sales. That’s simply not the case. Sure, in the short-term distributors may see fewer sales on inventory their customers may have been mismanaging in the past. After all, with effective inventory control solutions there will be less waste and less shrinkage, resulting in fewer unnecessary purchases. What distributors fail to see is the opportunity that occurs at the same time. It’s rare that a distributor is getting 100% of a customer’s business. When you demonstrate how you can help them save money that was previously being wasted, you open the door to new business. 

With industrial vending solutions, distributors are able to manage their customers’ inventory needs more effectively, reducing their inventory consumption by up to 30% or more. For the customer, these cost savings often encourage them to shift other existing spend your way. After introducing vending to their customers, we have seen some independent distributors gain up to $10,000 of additional business each month. 

Improved Customer Relationships

Failure to manage inventory effectively results in excess inventory left to sit on a shelf, tying up capital or resulting in missing inventory. That can halt production and lead to unpredictable lead times. No matter how you slice it, inventory mismanagement leads to loss of revenue for your customers.

Distributors should remember that they are in the business of problem solving, not just selling products. Vending allows distributors to offer relief to the frustration many customers feel regarding their inventory. When you can provide solutions, you create a relationship based on trust and become embedded in the mind of your customer. So when they need an item, they will think of you first. 

Not only does vending offer your customers value, it gives distributors the gift of time. The cloud-based software that drives vending tracks inventory levels in real time, cutting down the need for time-consuming manual counts. Auto-replenishment is another feature that cuts down on last-minute inventory purchases and helps customers avoid stockouts and overages. The result is more time you can spend developing business with new potential customers or fostering existing customer relationships. 

Distributors should not be afraid of using vending to help their customers reduce their inventory, but rather see it as an opportunity to strengthen relationships and grow in the long run.

Mark Hill has 40 years' experience in industrial distribution and vending. He is the founder of vending machine and inventory control software company 1sourcevend. Learn more at or contact him at

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