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Logistics
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Your
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You have promised your products will be there at a designated date. Suddenly you’ve run out of time and cannot make your advertised deadline. |
You should inform retail as soon as you realize your delay. Take precautionary measures and forewarn retail of these delays as early as possible. They may be able to adjust the advertisement or inform the stores and customers. If you deal with High-Tech products, chances are you will experience many delays. |
Just-in-time
The timing of production and sales is critical for success. The most profitable days for high tech products are in the introduction period where a new product has a clear advantage over its competitors. For example, the new product could be the first to use a certain chip that will increase the performance by 50%. There often is a customer group that wants this new technology NOW; therefore, is willing to pay a premium for it. The retail stores can sell the new product at a high price since the customers has “no” alternatives. After the introduction period, competing products have entered the stores and it becomes difficult to be in control of the street price. The introduction period might only last for a week – but in that week, your product has gotten all the attention. This strategy will automatically minimize the production period (eliminating buffers) so if something goes wrong you are at risk by having Ads for your product, but no product. With retail stores penalties being so high, the vendors cannot afford to let this happen. Vendors then HAVE to implement a time buffer and not take chances by advertising too soon. My experience is that as a retailer it is worth taking a risk from time to time. By fast and effective communication to the stores, they can prepare the consumers for the delay in the delivery. A customer might have to make a second trip but if your advertising is exciting enough, they will do it. The outcome is that you and the stores are first on the street to supply the initial demand, which in turn gives you the highest profit. |
A
vendor will eventually have late delivery of products regardless
of penalties. So what should a vendor do? Some vendors make the
mistake and do nothing, in hopes that the retail chain won’t
notice. If you see that your products might be late, inform the
buyer right away. Maybe the buyer can change the advertisement
at the last minute. For instance, change the text to warn the customers
that the product will not arrive before a certain date. The buyer
must warn the stores so the salespeople can be prepared when the
customers arrive. By making good informational displays, the stores
can minimize the negative effect – if not eliminate them.
The retail stores and you have the advantage of there being NO
alternative places to buy the product. However, this advantage
only lasts a short time! Nevertheless, it is an area where retail can diversify themselves from the others, by being the first to show the new technology. A good way to control the production and transport is to make check points all the way through the process. If certain checkpoints are met too late you must react early on so you can start responding to the delay. You are in control; it’s “just” a matter of action.
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The author of this article Jens Welling has worked with retail purchase, retail sales and retail marketing over the last 15+ years. Jens Welling has written a number of articles as a good source for any new and established company who want success with retail sales. Below are short descriptions and links to other articles. |
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Why You Have To Do Your Homework Choosing Sales And Distribution Channels Category Management Unique Selling Points (USP) Price Strategy What The Buyer Wants To Know Exit Strategy Price Setting |
Negotiation Tactics Rejection From Buyer Marketing Strategy Education Management Warranties Building A Brand Logistics Keeping Your Store Sales Alive Product Development |
