Every business wants to maximize revenue and cut costs. It is one of the primary principles of starting and expanding a business. For SMEs, this need is more dire due to insufficient financial reserve.
Bigger businesses can recover from smaller losses because they have cash reserves. Not so for SMEs. Any small loss can affect the company and cripple operations.
Hence, it’s vital to evaluate your business daily to make sure that you’re on track for success. It would help if you also had a good inventory management plan to cut costs. And what better way to save money on inventory than restocking from your supplier?
When executed appropriately, restocking from your supplier can bring huge benefits to your business. To find out how restocking with your supplier reduces cost, keep reading.
Order in Bulk
Especially if they are custom products! Take advantage of any discounts you can get from ordering in bulk. Every good business owner understands the economies of scale advantages: more products, less money. But bulk ordering doesn’t extend to all products, only the fast selling products or customer favorites.
Some suppliers have minimum order quantities (MOQ) for certain products. If your supplier has this, take care not to fall into the pit of over-stocking. You can negotiate with them for a discount of some sort for your bulk orders.
Collaborating With Your Suppliers
Next to your customers, suppliers are the next in line to the throne. A good buyer-supplier relationship can save your business a lot of money.
Effective relationships are about great communication that gives room for expediting speedy response to supply issues.
For instance, informing suppliers when you foresee a sales increase gives them time to adjust manufacturing to meet the increased demand. Besides, suppliers informing when an item is running low in stock lets you pause promotions or look for temporary solutions..
Having Products Retail-ready
The demand for retail-ready packaging is estimated to hit $7.9 billion in 2023. using more retail-ready packaging can help decrease stocking times and shipping expenses.
Thankfully, some suppliers offer labels and packaging, meaning you don’t have to spend time and resources to get the products retail ready when you receive them.
Trying a Vendor Managed Inventory
If you don’t like inventory, this option might be best for you. A vendor managed inventory (VMI) is exactly what it sounds like – your suppliers managing your inventory.
But before you burst into celebratory moves, a VMI doesn’t mean that you outsource your entire inventory to your supplier. No, you just put them in charge of their products on your inventory list. This way, they can restock anytime you’re getting low.
A VMI would save you a lot of money in deadstock, over stocking, extraneous storage fees, and emergency shipment fees. That’s quite a lot, right? Here’s one more, it’ll also save you the stress of worrying about inventorying and restocking for that particular product.
As for the suppliers, they get to monitor how well their product sells and manage their production. It’s a win-win for everyone.
If you apply all these tips, you’ll save your business a lot of money, which you can use to expand.
Do you need to restock on custom products such as labels, stickers, and patches? We offer great prices and bigger discounts for bulk orders.