There is no business house in the world that sells every single piece they get from the wholesaler. And in any retail store, online or offline,space matters. Especially with raging rents that people have to pay for storage. So, every bit of space counts.
Technology to the rescue
Managing and preempting inventory issues can be aided by modern technology. Online stores today get in touch with wholesalers only if a shopper expresses interest in a product. This is a proactive method through which you can reduce your unused inventory in the future.
Offers and discounts
Nothing works like offers and discounts to get rid of unused inventory. People are tuned in to consider products if there is a discount. Apart from offering discounts on old stock, you can also club it with new product sales. You can offer old stock as freebies in an order for new products. This also encourages consumer spending. You can popularize sales and promotions by giving out coupons for unused inventory products.
Off Season Sales and Flash Sales
Organize a day or two of heavy sales with heavily slashed prices. Give out huge discounts on unused inventory. Offer free shipping on these sales. Nothing works like a flash sale to whet a consumer's appetite.
Liaise with other retail sites
If you can't sell it through your site, liaise with other sites. Try to sell via another medium.
Sell Overseas
If there is no means to sell it at home, you can sell it overseas. There are several avenues through which your unused products can be sold in other countries.
And, of course...
There is always the option of donating your unused inventory to charity.
A very important step in business is setting up shop. As a business start-ups, we always tend to look for the most inexpensive ways to do this. What are the pointers to be kept in mind while choosing premises for your office, retail store and warehouse?
Vending machines:
If you are a small startup with budget issues to set up shop, consider the idea of vending machines. Automatic merchandising or vending machine retailing is a proven business concept for more than a century. This is wonderful for snacks with a long shelf life, stationery, and such small products. But put in a lot of thought and place the vending machine in the right spot so as to attract a lot of customers and minimal vandalism and theft. Vending machines are great in the sense that they mean low startup cost, low working capital and low overhead. This is a pure cash business; you collect money when you replenish supplies.
Retail stores:
When you are pressed to look for a store in a city, consider these factors:
Demographics of the local population- you should make sure you have your store in a place that has potential customers. What’s the point in setting up a stationery shop where the average resident is illiterate? Consider the purchasing power of the population around the store and see if that fits in with your pricing strategy.
Competition: would you lose your market share to competition if you enter the area? If you have better goods and better prices, you might want to set up shop in an area where there are other players. You will get a share of their market when the buyers see you there.
Accessibility to your store: If your business depends on random walk-ins, you’d be prudent to set it up in a place that has a lot of pedestrians.
Parking: If you rent a shop premise, rent parking as well. You will be driving out customers otherwise. No one wants to shop at a store that offers no parking.
Stick to your budget: Retail space is expensive. So, have a pre formed budget. And look for places that fall within your range.
Office:
Before renting space for your startup workplace, see if you can club this with your retail space. That would work out wonderfully in terms of cost and commute between the two places. If you should rent an office place, consider serviced office places. These are like serviced apartments where you get office infrastructure, space, computers, cleaning services, communication lines and other such services for rent. This is sometimes better than trying to do it on your own.
Warehouse:
A warehouse has to be located in a place that is easily accessed when you have to ship your products to stores/customers. At the same time, it has to meet budget constraints. Warehouses are typically found in the outskirts of the city. If you want to, you can team up with a logistics partner who you can outsource warehousing to.
SCM basics:
A chain is only as strong as its weakest link. This analogy can be extended to the Supply Chain Management process. The individual organizations must provide quality products or services in a timely, cost-effective manner if they are to be part of a broader supply chain. SCM requires firms to use information systems and metrics to focus on performance across the supply chain. The whole picture is important. It is not prudent for individual units in the Supply Chain to maximize their performance without regard to the broader impact on the supply chain. This can cause problems. A manufacturer in the in Supply Chain might want to minimize its inventory levels. This causes delivery issues in the next phase. A distributer might decide to cater to highly seasonal demands. This results in a bullwhip reaction. Information systems and metrics help make decisions in such situations. They make thorough impact analysis and predict outcomes in case of changes.
How is SCM implemented?
SCM is a long term project. Every firm that wants to be part of a supply chain should:
Identify the supply chains it wants to compete in.
Understand how the firm will provide value to the supply chain.
Select supply chain partners, including suppliers, subcontractors, transportation providers, and distributors.
Supply chain maps with physical flows and information flows help identify the space to compete in. These maps explain how the organization can add value, and what information is required to make the supply chain work effectively and efficiently. The map must coexist with the overall business strategy of the company. The SCM practices must be consistent with purchase, logistics, manufacture and marketing practices of the organization.
Maintaining SCM relationships:
For a supply chain to run seamlessly, it is important to designing specific products for the supply chain. Information of various phases of the supply chain should be made visible to others within the chain. Reverse auctions and exchanges must be factored in the SCM information systems. Cost management must be done across the chain. The components of the SCM should adopt definite standards on quality, systems, practices etc.
The most challenging part of maintaining relationships here is with people management. The easiest here is of course, information management which is entirely automated. Barring sudden technical mishaps, this runs smoothly. Inventory and transport systems are incorporated within the information systems. A lot of issues crop up because of miscommunication between people involved. An SCM relationship runs on mutual trust between component organizations. And this trust factor is built by the people involved. Reliable relationships between suppliers and customers are of paramount importance. In the initial years, there is scope to shuffle around but as the SCM is built, it becomes increasingly difficult to shuffle without significant impact.
Kudos, pal. You have had a successful run, campaigning your business idea on Kickstarter. It is no mean feat.
Killer idea, check.
Marketing the idea, check.
Market acceptance, check.
Raising capital, check.
You are the chosen one. With great power comes great responsibility. Yes, Ben Parker’s golden words are apt here. You do know that Kickstarter backers do not get financial profits for their backing. They get samples of your goods which interested them in the first place and of course, the satisfaction that they funded a project that materialized. Here comes the difficult part. You need to put that capital to use, manufacture the produce and send them out. Projects that take off on Kickstarter funding almost always require a lot of logistical planning and execution. Running a new business is tough even for an experienced entrepreneur. You run pillar to post, getting approvals, getting raw materials and building the product from the prototype. There are legal issues to be faced with every step. Make sure backers get your products.
Shipping products to backers needs a well laid plan. Sounds simple, eh? Packing your stuff would require several materials. It needs a packing plan. You cannot really pack edible stuff like you pack books. Diligent planning about packing can save you a lot of money. Look at how efficiently you can pack, using minimal products but with maximum protection. Hunt for packing material at cheaper prices. International shipments need to be shipped after legal procedures are followed. There are several rules and regulations regarding international shipments. Make sure you follow every one of them, in order to stay clear of trouble. Several countries do NOT permit edible foodstuff into their borders.
Batch process your shipments. Send products to neighboring areas together. Talk to shipping partners and see if you can work a deal with them. You are going to involve them in bulk orders. They would be willing to give you good deals on shipping. Make sure your shipments are tracked from destination to delivery. Late shipments dues should be claimed. That would help keep shipping costs down. You will see that you tend to optimize time, cost and effort with every consequent shipment. If you are unable to handle the logistics yourself, you can rope in packaging and shipping experts who will do it for you. Look at the cost they quote and compare it with what you can do it for. If it makes sense, you hire the third party vendor for packaging and shipping.
So, good luck in keeping your backers and your future customers happy.
