How "Inventory-Sharing" Can Help When Business is Down (for manufacturers)

Tuesday, February 2, 2016 8:00:00 AM

By Kathy Tomalonis
Principal, WarehouseTWO, LLC
February 2016

For many manufacturers, 2015 did not end on an upswing in business, and 2016 has not started out so well either.  Lower-than-expected sales can result in an inefficient (if not money-losing) operation, and often triggers difficult realities, including reduction in resources (staff).  Formalized inventory-sharing among your distributors can help mitigate these challenges..

Formalized “inventory-sharing” is the practice whereby you and your distributors can easily browse each other’s inventories.  Here is how such activity can help your company during challenging times…

Your Challenge:  Lower Sales
How “inventory-sharing” can help:  “Inventory-sharing” can increase overall sales of your products.  When more of your distributors have access to more of your product line’s inventory, they can increase their end-customer-inquiry-to-order conversions.

Your Challenge:  Fewer Resources
How “inventory-sharing” can help:  “Inventory-sharing” can increase your “operational efficiency”.  When your distributors solve their own critical backorder needs among themselves, the result will be fewer product availability inquiries, fewer small-quantity manufacturing runs, fewer small-quantity open orders and fewer “factory fire drill” rush demands.  These activities consume resources that may not be available, and they may be unprofitable events.

Transactions between your distributors aren’t necessarily lost orders for you.  Instead, they are likely to be delayed stock replenishment orders.  That is, the selling distributor will eventually replenish his inventory of your products.  Replenishment orders are likely more profitable for you:  they tend to have greater quantities per line item, and they incur less/no expediting.

In summary, formalized “inventory-sharing” among peer wholesalers can have these benefits:

  • More overall sales
  • Reduced workload
  • Greater "operational efficiency"

For help with creating a formalized “inventory-sharing” network, contact WarehouseTWO, the leading independent inventory-sharing service for industrial wholesale distributors.

Formalized “inventory-sharing” among your distributors can help them too.  Read more…

About the Author
Kathleen Tomalonis joined WarehouseTWO, LLC in 2005.  She has over twenty years experience in marketing and administrative management.  Before joining WarehouseTWO, she spent ten years working in the software industry in Silicon Valley.  Kathleen’s articles and tips are published in WarehouseTWO’s monthly e-newsletters.  Click here to subscribe.


About WarehouseTWO
WarehouseTWO, LLC is an independent “inventory-sharing” service created exclusively for durable goods manufacturers and their authorized distributors, and for any group of durable goods “peer” wholesaler-distributors, such as members of a buying/marketing group or cooperative.  To learn how inventory-sharing with WarehouseTWO can help your business, visit the WarehouseTWO website, or email info@warehousetwo.com.