“We don’t have any in stock.”
Those six words make tire dealers – and their customers – cringe. You’ve heard them; you’ve said them. You can’t stand them.
As a tire dealer, you know the scenario: After delivering the bad news, you spend 10 minutes on the phone tracking down the tires you need from another store. You hope the customer doesn’t get tired of waiting.
If you’re lucky enough to find the tires, you lose precious profit margin by having to outsource your business.
An inventory exchange program can help you find those much-needed tires at the start and therefore alleviate much of this hassle.
Simply put, an inventory exchange program is a utility that lets tire dealers show each other on-hand quantities of the items they sell. These dealers might be friendly competitors or a group of stores that all have the same owner. Depending on a store’s role in an inventory exchange arrangement, it can accomplish even more.
For example, an inventory exchange program allows tire dealers to:
* Receive item quantities and updated pricing;
* Receive settings, such as size and product code for new items;
* Send and view quantity information;
* Send updated prices;
* Send settings for new items;
* Establish a relationship with another dealer for favorable pricing.
The Process
Data from stores in an inventory exchange group is stored on a secure computer system (FTP server) that’s managed by a software provider. The stores can then send data to – and download data from – that FTP server. Because the inventory exchange program continually runs at participating stores, quantity information is always current and requires no manual work by the dealer.
If a store is allowed to download updated prices, settings for new items, or both, the files with that data are compared to the dealer’s master database for conflicts. If no errors are found, that store’s inventory is updated. If conflicts exist, the program generates a report describing why prices couldn’t be changed and why new items couldn’t be added to inventory. Employees can then make needed changes in that store’s inventory management program and download data from the inventory exchange program again.
The Benefits
It doesn’t matter if stores in an inventory exchange group are friendly competitors, part of a chain, separate locations or the same dealership. An inventory exchange program can help manage inventory that’s already on the sales floor, in the stockroom, at the warehouse or even across town.
Let’s use SuperGrip tires as an example. The SuperGrip tire constantly rolls off the sales floor profitably at Store A, while it continues to gather dust at Store B. By using an inventory exchange program to look up item quantities, employees at Store A can easily see that they should initiate a transfer of the SuperGrip tire from Store B. By using the program to share on-hand quantities, both stores benefit, as illustrated below:
Store A:
* Avoids inventory shortages and stock outs by securing more items to sell;
* Keeps customers happy, because the item they want will be available.
Store B:
* Reduces the risk of aged inventory by eliminating slow-moving items;
* Frees up space that can be used for stocking popular items.
In addition to aiding in inventory control, an inventory exchange program offers administrative benefits for managers of multiple stores. First, it provides a means of monitoring quantities at each location. If managers want to know how well items are selling at a particular store, they can easily look up on-hand quantities.
An inventory exchange program can also be used to set prices, schedule sales and add product codes for new items. Managers can add new items or update prices and sale dates at one, centralized location. Then, that data can be sent to other stores in the inventory exchange group.
The Results
An inventory exchange program equips dealers with a means of efficiently managing inventory. They can spend less time updating prices and product lines, and it’s easier to keep the best-selling items in stock. Efficiencies extend to the sales floor too. And, that takes the sting out of the phrase, “We don’t have any in stock.”
