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Inventory, finances, and the cost of opportunity… Part 4

Let me introduce you to Roberto Rivas. Roberto is one of the smartest people I know when it comes to knowing the market and understanding distribution. Roberto is our Director of Sales for the general markets in Latin America and Spain. Let’s listen in as he talks to us…

 

Inventories. What to carry and how many to carry? The answer to these two questions is always our worry as publishers and the worry of our customers and distributors with regard to their clients.

 

In this equation, I would like to incorporate a third element: opportunity, or the opportunity cost. This is a concept that we are normally taught in economics in business school.

Inventory, Finances, and your New Releases – Part 3

We have looked now at how your core inventory is really the key to having a healthy business (Part 1). We have been given some great homework to get to the very core of what we should have or carry in our inventory to help our business succeed (Part 2). To say the least, it looks like a lot of work. And let me tell you a secret…it is a lot of work. One of the most important positions in any company is the position of the inventory manager or buyer. They hold in their hands the future capital of the company- either to get a good return, or to be tied up and to sit on a shelf in some warehouse gathering dust.

But there is a section of inventory that is higher risk and that can quickly begin to eat away at your cash flow if not handled correctly. But this section can just as well be the jolt that can rocket your sales if handled and calculated correctly. This is the section of inventory that we refer to as New Releases. 

This may be a little controversial for many publishers, but hey it’s your business and just trying to help you and us as an industry. So, let’s break this down into three sections: Selecting the product, Quantities to order, and Pressure to buy.

The inventory question part 2 - For the distributor.

There are definitely people around me who are much smarter than I am and who have some great experience. I have asked Lluvia Soto, our director of sales for the religious markets to give us a few ideas and thoughts regarding the distributor and the inventory they need when the question is asked “I want to carry it all, what should I carry?” 

 

Below are a few recommendations that Lluvia has put together for the distributor who wants to carry not just the core, but grow in the breadth as well.

The inventory questions and their financial implications. (Part 1)

Last week I was asked by a friend to take a look at an inventory proposal regarding his business. I love getting asked questions and I enjoy it even better when I am given freedom to speak what needs to be heard versus what they want to hear. This is when I feel I can help.

Let me give you a bit of background first. Over the last couple dozen or so years I have had the opportunity to work with some incredibly talented distributors throughout Latin America, Spain, and here in the US. I say incredible because they balance several factors all at the same time including but not limited to inflation, devaluation, political variances, as well as transit times. But still the greatest question I get from everyone is not about economic forecasting or hedging against devaluations, it is about inventories.  And though the questions come in various forms and disguises they all boil down to just two simple questions.

·         What product should I carry?

·         How many of each product should I carry?

If you will allow me, let me take the next few posts here in the blog and answer the questions of what to carry and how many to carry as well as talk about the financial implications that inventory has on us as an industry. I give you permission to take what is applicable to you and to throw the rest away. Ready? Let’s get started then.