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Capitalizing on Amazon’s Weakest Link: Inventory Management

Capitalizing on Amazon’s Weakest Link: Inventory Management

August 15, 2019

Without proper inventory control, an entire operation can suffer. Balancing the right stock in various locations becomes little more than a guessing game that results in too little material one month and too much the next. Knowing what you have on hand not only helps with inventory costs, but also can reduce inventory consumption, streamline purchasing, speed fulfillment and increase production. Lacking the appropriate parts and materials, however, can swiftly bring production to a screeching halt, leaving employees waiting around for mission-critical items to be delivered. 

Whether missing items are due to inventory mismanagement, supplier-delivery issues or employee hoarding, the reason doesn’t really matter. The bottom line is that your customers are losing time and money every time critical items are not in stock. 

Inventory mismanagement isn’t just an inconvenience, it can trigger a chain of events resulting in: 

  • Production shortages
  • Shipment delays
  • Inaccurate lead times
  • Decreased customer satisfaction
  • Inflated inventory costs
  • Loss of revenue
  • Employee downtime

For distributors, inventory mismanagement can make or break the customer relationship. When customers are forced to make unplanned purchases to replace missing inventory, they often have to make the choice of fast procurement over loyalty. 

And who do we know that can offer lightning-fast delivery? If you guessed Amazon, you would be correct. 

The truth is that Amazon may be known for their easy purchasing experience and fast delivery options, but don’t let that scare you. Competition may be fiercer than it’s ever been, but independent distributors can offer something that Amazon cannot: inventory control solutions.

Improved Relationships

Distributors that are proactive can gain a competitive edge over their competition and Amazon by offering value to their customers. Value-added services like vending and vendor managed inventory can help both customers and distributors alike improve operational processes, drive revenue and create more satisfied relationships. 

These are some ways distributors have improved customer relationships using vending as a tool: 

1. Increased customer loyalty. Customers appreciate vending when it’s easy to use, easy to maintain and improves their own inventory management. 

2. Increased inventory visibility. Vending offers customers real-time visibility into their item usage and inventory levels helping them make smarter stocking decisions for better operational efficiency. 

3. Increased customer spend. With successful implementation of vending, distributors often capture additional spend they may have been missing. 

4. Supplier consolidation and more streamlined sales. With the right software and vending solutions, customers reduce their supply base, streamlining purchasing. 

5. Increased accountability. When distributors place machines with permissions and restrictions, they provide accountability at the point of use, reducing shrinkage. 

Amazon may be many things to many people, but there’s quite a few ways the smaller, independent distributor can leverage their offerings to provide customers with value that matters. Value they can’t find shopping through Amazon. 

Read more about how inventory control software can help your distribution business compete in my MDM blog: How Distributors Can Win with Vending

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 1sourcevend.com or contact him at mhill@1sourcevend.com

© 2019 Gale Media, Inc.

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