Inventory is difficult to regulate, especially in the awards business. Our product line is so broad; it’s like running a hardware store — so many small pieces to control. As the industry has changed, retailers began buying parts by the box. If you sold 80 trophies, you would buy a box of 100, leaving 20 extra. Do that 50 times a year for 20 years and you see how even a small dealer can accumulate an inventory.
In the last 20 years, many dealers have tried to operate with a JIT (Just in Time) system of inventory, where they order their parts at the last minute and operate off the inventory of the supplier. However, for this to be successful, it generally only works with a local store that has somewhat regulated trade in a smaller geographic area.
If the client doesn’t give you the lead time, ordering on Tuesday and needing it Friday in another state, you must maintain an inventory or pay a higher delivery cost. However, having an inventory that doesn’t turn can cost you money.
That being said, inventory can be a blessing or demise for your business. Watch it and try to control it for your benefit.
—Stephen Capper, A-1 Awards