If you have a VMI (vendor management inventory) system, then you know the benefits. A VMI system allows for all your goods and services to be delivered and stored right to your factory floor, and it is a cost efficient way of taking care of your business. However, if you still aren’t convinced of the benefits of a VMI strategy, then you can take a look at these reasons why vendor management inventory is going to be the best for you.
1. You Can Manage Only What You Need
Instead of having a massive space filled with inventory that you might need one day or inventory that you aren’t going to sell right away but are still paying overhead for, you can manage your shelf space by only buying what you need. It allows the vendors to determine the right time to restock goods, and you can better reach out and connect with your vendors to see what is needed and when.
Additionally, the vendor will know when their products are in very high demand and can have more warehouses inventoried. Then when the demand starts to go down, they can stop sending you so much. The vendor wants to keep their products on the shelves for as long as possible, so this also reduces the risk of stockouts as well.
2. You Can Focus On Growing Your Business As A Retailer
While managing your business was something that you could have done yourself as a small business, eventually your business grew and your inventory has grown with it. You’ve got better things to do as a business owner than counting stock all day and dealing with excess inventory costs, so why not let a vendor handle it?
Vendor-managed solutions allow you to spend less time on managing inventory, and more time taking care of the rest of your growing business. Spend less time counting the stocks you have and more time marketing the stocks to your customers so you can sell them all.
3. You Can Make More (and Better) Sales
The VMI system is able to use data from your location to monitor inventory of its stocks in real time. Then they collect customer demand by how many of their products are sold. If they know that their product sells the most in the summer, then they can tell you, the retailer, and you can take advantage of this.
You can order more stock and share summer deals to get even more people to start buying the product, making more money in the summer. Then you know when you can order less during the lower times of the year. By sharing and analyzing the data with your VMI system, you can focus on using that data to make the best sales and the most amount of money possible.
4. Less Complexity For Your Business
Instead of having to rely on several vendors to carry and supply your stock of a specific item, you can get it all directly from the people who are making it with a VMI system. This removes all of the back and forth that can go on with communicating with multiple vendors and dealing with their inventories and orders. Instead, you get it all straight from the source and get a predictable and reliable inventory schedule.
This makes it a lot easier to manage your business and will reduce the headaches of communicating with vendors. Instead, you’ve got one business and one vendor to talk to, and that’s a much easier relationship for you to build, nurture, and maintain for both yourself and your business.
VMI Systems Can Help You Understand The Market
While you might find that bringing in outside help for your inventory doesn’t sound appealing, it can help you out in several different ways. Especially if the vendor has been around a long time, they can act as a mentor and as a safety net. You can count on them to know the market and know when things need to be delivered to your storefront to keep their customers happy.
Additionally, you gain their data as well, just as much as they gain yours, and the sharing of data can give you new insights into marketing and managing the product. So whether you are a big business or a small one, you need to ensure that you are using VMI systems to manage your inventory, because you are going to see a lot of benefits from it.