Is this good for them or for you?

Apr 12, 2017 by Edward L. Blach, DVM, MS, MBA

When you get approached about special deals to buy large amounts of inventory all at once by distributors or manufacturers, ask yourself, "Is this good for them or good for me?"  Remember, you are the customer.  It is not unreasonable to ask for terms that meet your needs.

All too often, large volume purchases are intended more to help the seller to meet some sales goal, and it results in poor business results to spend large amounts of money on a year's worth of product all at once.  Committing to large volume purchases carries with it risks that include loss of product over time (shrinkage), risk of expiration, excessive cash drain, impact on your balance sheet, and others.

Ask your vendors to give you similar pricing over the same time span in exchange for your commitment to buy from them during that time.  But it is inadvisable to front load a huge amount of inventory that won't be utilized in a reasonably short time.

Remember, it's a competitive market.  They want your business and will structure deals to help you if you commit your business to them for a specified time period.  Work with your suppliers to not only get good service and pricing, but to optimize business between your companies.

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