"I will plan a little farther ahead when it comes to buying hardware. And that is fine with me. And because I don't sell a large volume of pens, I will have to depend on the vendors to manage their inventory, so I can get what I need when I need it."
Tell me Steve, how does any vendor anticipate what their customers might require 60 days in advance? If I could do this accurately I would be on Wall Street making millions of dollars a year.
Arizona Silhouette Inc. has a customer base of over 8,000 customers. Am I supposed to be able to anticipate what each of these individuals might want to order sixty days in advance? Am I supposed to cover the cost of paying the 'flooring' cost of my inventory so you might want to order fifteen pen kits four times a year?
Most businesses in today's economy are reluctant to invest thousands or millions of dollars in inventory because they don't know what may be coming down the road with regards to government mandates (health care insurance, taxes, etc.).
Based on what you posted I would guess that what you are looking for is a vendor that will take the financial risk instead of yourself.
Bill Baumbeck
Arizona Silhouette Inc.
I find it interesting that you don't practice any type of forecasting for your inventory (or atleast very little). Any merchant that inventories goods has to perform some type of forecasting. I've been an Inventory Manger for 12 years and that is what my entire job is based on. The equipment that I forecast and inventory costs anywhere from $90k to several million dollars, so there is a big difference in budgets from my machines to pen kits, but the principal is the same. I maintain an 18-month rolling forecast for my customer base based on previous fiscal years sales, current market trends, current political issues, and my gut feeling (and I assure you that I'm not a Wall Street millionaire). Now are my forecasts always 100% accurate? Of course not, the market is constantly changing and you have to account for that in your forecast. Also, I do not carry inventory of equipment that costs in excess of $2M, but I have to forecast it in my budget so that my factory can plan for it in their budget and sometime during my fiscal year, I have to take possession of the equipment. I do, however carry plenty of stock of the less expensive equipment so that I can deliver quickly as this equipment is more easily forecasted and carries less risk if my forecast is off target a little. In terms of pen kits, I would probably carry less inventory of high end Statesman kits, and more of the slim lines and cigars as they are probably better sellers. Bottom line is that my customers will wait for a machine that costs $2.5M because it is a more highly specialized machine and harder to find (i.e. not everyone sells a Statesman pen kit..they'll wait), but they won't wait for me to get a $90K machine (i.e. slimline kit because you can find one on every corner). You also don't forecast for your entire 8,000 customers, you divide them into tiers such as 1, 2, 3, and make sure that your tier 1 customers are well taken care of as those are the ones paying your bills. Tier 2 you try to move to tier 1 and tier 3 take as they come. Bottom line is if you don't carry what the consumer wants, they'll find someone who does. Do we as consumers expect you to take on all the risk...of course! That's why you are in business and we are not.
I don't mean for anything I said to be offensive or disrespectful, so please don't take it that way.
