chapter 19

STOCK ANSWERS

The Lowdown on Inventory

 

 

 

 

Where would an apparel company be without clothing? An auto supply store without auto parts? A computer company without computers? Nowhere, of course. Understanding and managing your inventory is one of the most critical factors in business success.

Yet many entrepreneurs fail to answer such basic questions as “What items are the winners and losers?” and “How often does inventory turn over?” Don’t make this mistake. Management education expert Ashok Rao believes that companies can increase their profitability 20 to 50 percent or more through careful inventory management.

TIP

Inventory control doesn’t just mean counting. Take physical control of your inventory, too. Lock it up or restrict access. Remember that inventory is money.

Inventory Control

There is more to inventory control than simply buying new products. You have to know what to buy, when to buy it and how much to buy. You also need to track your inventory—whether manually or by computer—and use that knowledge to hone your purchasing process.

Startup entrepreneurs are at a disadvantage when it comes to inventory control, says Rao. “They may not have the right kinds of systems to manage their inventory. They don’t have the right kinds of skills for handling inventory. They don’t know how to go about actually maintaining their inventory, and they sometimes have to purchase in larger quantities than what they want or need.”

Maintaining Enough Inventory

Your business’s basic stock should provide a reasonable assortment of products and should be big enough to cover the normal sales demands of your business. Since you won’t have actual sales and stocking figures from previous years to guide you during startup, you must project your first year’s sales based on your business plan.

When calculating basic stock, you must also factor in lead time—the length of time between reordering and receiving a product. For instance, if your lead time is four weeks and a particular product line sells 10 units a week, then you must reorder before the basic inventory level falls below 40 units. If you do not reorder until you actually need the stock, you’ll have to wait four weeks without the product.

“The secret of success
is to do the common
things uncommonly
well.”

—JOHN D. ROCKEFELLER,
FOUNDER OF STANDARD OIL

Insufficient inventory means lost sales and costly, time-consuming back orders. Running out of raw materials or parts that are crucial to your production process means increased operating costs, too. Your employees will be getting paid to sit around because there’s no work for them to do; when the inventory does come in, they’ll be paid for working overtime to make up for lost production time. In some situations, you could even end up buying emergency inventory at high prices.

One way to protect yourself from such shortfalls is by building a safety margin into basic inventory figures. To figure out the right safety margin for your business, try to think of all the outside factors that could contribute to delays, such as suppliers who tend to be late or goods being shipped from overseas. Once you have been in business a while, you’ll have a better feel for delivery times and will find it fairly easy to calculate your safety margin.

Avoiding Excess Inventory

Avoiding excess inventory is especially important for owners of companies with seasonal product lines, such as clothing, home accessories, and holiday and gift items. These products have a short “shelf life” and are hard to sell once they are no longer in fashion. Entrepreneurs who sell more timeless products, such as plumbing equipment, office supplies or auto products, have more leeway because it takes longer for these items to become obsolete.

ON WITH THE SHOW

Trade shows are the primary way for new businesses to find suppliers. All major suppliers in an industry display their products at seasonal trade shows, where retailers go to buy and look at new items.

 

Although retailers buy from various sources year-round, trade shows are an important event in every store owner’s buying cycle. Most retailers attend at least one trade show per year. Smart buyers come prepared with a shopping list and a seasonal budget calculated either in dollar amounts or in quantities of various merchandise.

 

Practically every major city hosts one or more trade shows relevant to specific retailers. You can contact your local chamber of commerce or convention and visitor’s bureau for upcoming shows in your city or state. Your industry’s trade publications should also list relevant trade shows.

No matter what your business, however, excess inventory should be avoided. It costs money in extra overhead, debt service on loans to purchase the excess inventory, additional personal property tax on unsold inventory and increased insurance costs. One merchandise consultant estimates that it costs the average retailer from 20 to 30 percent of the original inventory investment just to maintain it. Buying excess inventory also reduces your liquidity—something to be avoided. Consider the example of an auto supply retailer who finds himself with the opportunity to buy 1,000 gallons of antifreeze at a huge discount. If he buys the antifreeze and it turns out to be a mild winter, he’ll be sitting on 1,000 gallons of antifreeze. Even though he knows he can sell the antifreeze during the next cold winter, it’s still taking up space in his warehouse for an entire year—space that could be devoted to more profitable products.

TIP

In addition to counting inventory weekly, monthly or annually, some experts recommend checking a few items each day to see if your actual amount is the same as what you have in your records. This is a good way to troubleshoot and nip inventory problems in the bud.

When you find yourself with excess inventory, your natural reaction will probably be to reduce the price and sell it quickly. Although this solves the overstocking problem, it also reduces your return on investment. All your financial projections assume that you will receive the full price for your goods. If you slash your prices by 15 to 25 percent just to get rid of the excess inventory, you’re losing money you had counted on in your business plan.

Some novice entrepreneurs react to excess inventory by being overly cautious the next time they order stock. However, this puts you at risk of having an inventory shortage. To avoid accumulating excess inventory, set a realistic safety margin and order only what you’re sure you can sell.

Inventory and Cash Flow

Cash-flow problems are some of the most common difficulties small businesses encounter, and they are usually the first signs of serious financial trouble ahead. According to management education expert Ashok Rao, tying up money in inventory can severely damage a small company’s cash flow.

To control inventory effectively, prioritize your inventory needs. It might seem at first glance that the most expensive items in your inventory should receive the most attention. But in reality, less expensive items with higher turnover ratios have a greater effect on your business than more costly items. If you focus only on the high-dollar-value items, you run the risk of running out of the lower-priced products that contribute more to your bottom line.

Divide materials into groups A, B and C, depending on the dollar impact they have on the company (not their actual price). You can then stock more of the vital A items while keeping the B and C items at more manageable levels. This is known as the ABC approach.

“What we think determines
what happens to
us, so if we want to
change our lives, we
need to stretch our
minds.”

—WAYNE DYER, SELF-HELP
ADVOCATE

Oftentimes, as much as 80 percent of a company’s revenues come from only 20 percent of the products. Companies that respect this “80-20 rule” concentrate their efforts on that key 20 percent of items. Most experts agree that it’s a mistake to manage all products in the same manner.

Once you understand which items are most important, you’ll be able to balance needs with costs, carrying only as much as you need of a given item. It’s also a good idea to lower your inventory holding levels, keeping smaller quantities of an item in inventory for a short time rather than keeping large amounts for a long time. Consider ordering fewer items but doing so more often.

Tracking Inventory

A good inventory tracking system will tell you what merchandise is in stock, what is on order, when it will arrive and what you’ve sold. With such a system, you can plan purchases intelligently and quickly recognize the fast-moving items you need to reorder and the slow-moving items you should mark down or specially promote.

You can create your own inventory tracking system or ask your accountant to set one up for you. Systems vary according to the amount of inventory displayed, the amount of backup stock required, the diversity of merchandise and the number of items that are routinely reordered compared to new items or one-time purchases.

Some retailers track inventory using a manual tag system, which can be updated daily, weekly or even monthly. In a manual tag system, you remove price tags from the product at the point of purchase. You then cross-check the tags against physical inventory to figure out what you have sold.

For example, a shoe-store retailer could use the tag system to produce a monthly chart showing sales according to product line, brand name and style. At the top of the chart, he would list the various product lines (pumps, sneakers, loafers), and down the left margin, the various brand names and different styles. At the intersecting spaces down the column, he would mark how many of each brand were sold, in what style and color, whether the shoes were on sale or discounted, and any other relevant information.

Dollar-control systems show the cost and gross profit margin on individual inventory items. A basic method of dollar control begins at the cash register, with sales receipts listing the product, quantity sold and price. You can compare sales receipts with delivery receipts to determine your gross profit margin on a given item. You can also use software programs to track inventory by type, cost, volume and profit. A few programs to investigate include inFlow (inflowinventory.com), AdvancePro (advanceware.net), and Inventory Traker for Manufacturing/ Distribution (trakersystems.com). (For more on computerized inventory tracking, see the section on “Computerized Inventory Control” on page 290).

JUST ONE LOOK

Radio frequency identification—or RFID—is largely the domain of big companies because of its cost, but small businesses should still keep an eye on this growing tech trend. Patrick J. Sweeney II, author of RFID for Dummies and president and CEO of RFID solutions firm ODIN Technologies, describes the technology as “bar codes on steroids.”

 

Small tags affixed to individual products or to pallets of merchandise absorb and reflect radio waves that can be read by an RFID scanner, revealing such helpful facts as when and where the product was manufactured, when it was shipped, price and other information. According to Sweeney, the applications for small businesses include asset and inventory tracking and management, loss prevention and even automated checkout.

 

“Rather than scanning one product at a time, you can scan a whole cartload without any human intervention,” says Sweeney. “Customers could simply walk [their carts] past an RFID scanner, and their total is read with a properly designed system.”

 

The price of RFID technology has fallen recently, from $50,000 for an entry-level solution to around $300,000 for an initial pilot system—and Sweeney anticipates that the prices will drop further. Large retailers like Target and Walmart, and even government agencies like the Department of Defense, require RFID-tagged merchandise from their suppliers, so it’s definitely technology worth considering.

Unit-control systems use methods ranging from eyeballing shelves to using sophisticated bin tickets—tiny cards kept with each type of product that list a stock number, a description, maximum and minimum quantities stocked, cost (in code), selling price and any other information you want to include. Bin tickets correspond to office file cards that list a stock number, selling price, cost, number of items to a case, supply source and alternative source, order dates, quantities and delivery time.

Retailers make physical inventory checks daily, weekly or as often as is practical—once a year at the minimum. Sometimes an owner will assign each employee responsibility for keeping track of a group of items or, if the store is large enough, hire stock personnel to organize and count stock.

Computerized Inventory Control

While manual methods may have their place, most entrepreneurs these days find that computerizing gives them a far wider range of information with far less effort. Inventory software programs now on the market let you track usage, monitor changes in unit dollar costs, calculate when you need to reorder, and analyze inventory levels on an item-byitem basis. You can even expand your earlier ABC analysis to include the profit margin per item.

In fact, many experts say that current computer programs are changing the rules of ABC analysis. By speeding up the process of inventory control, computers allow you to devote more time to your A products to further increase your profitability. You can even control inventory right at the cash register with point-of-sale (POS) software systems. POS software records each sale when it happens, so your inventory records are always up-to-date. Better still, you get much more information about the sale than you could gather with a manual system. By running reports based on this information, you can make better decisions about ordering and merchandising.

With a POS system:

• You can analyze sales data, figure out how well all the items on your shelves sell, and adjust purchasing levels accordingly.

• You can maintain a sales history to help adjust your buying decisions for seasonal purchasing trends.

• You can improve pricing accuracy by integrating bar-code scanners and credit card authorization ability with the POS system.

There are plenty of popular POS software systems that enable you to use add-on devices at your checkout stations, including electronic cash drawers, bar-code scanners, credit card readers, and receipt or invoice printers. POS packages frequently come with integrated accounting modules, including general ledger, accounts receivable, accounts payable, purchasing, and inventory control systems. In essence, a POS system is an all-in-one way to keep track of your business’s cash flow.

AHA!

APICS can provide expert advice on inventory management and suggest software programs to use; you can contact the company at (800) 444-2742 or apics.org. In addition, many computer and software vendors sponsor free seminars to introduce new lines of inventory control products to prospective buyers.

Features to consider in a POS system include the following:

• Ease of use. Look for software with a user-friendly graphical interface.

• Entry of sales information. Most systems allow you to enter inventory codes either manually or automatically via a bar-code scanner. Once the inventory code is entered, the systems call up the standard or sales price, compute the price at multiple quantities and provide a running total. Many systems make it easy to enter sales manually when needed by letting you search for inventory codes based on a partial merchandise number, description, manufacturing code or vendor.

• Pricing. POS systems generally offer a variety of ways to keep track of pricing, including add-on amounts, percentage of cost, margin percentage and custom formulas. For example, if you provide volume discounts, you can set up multiple prices for each item.

• Updating product information. Once a sale is entered, these systems automatically update inventory and accounts receivable records.

“The definition of
salesmanship is the
gentle art of letting
the customer have it
your way.”

—RAY KROC, FOUNDER OF
MCDONALD’S CORP.

• Sales tracking options. Different businesses get paid in different ways. For example, repair or service shops often keep invoices open until the work is completed, so they need a system that allows them to put sales on hold. If you sell expensive goods and allow installment purchases, you might appreciate a loan calculator that tabulates monthly payments. And if you offer rent-to-own items, you’ll want a system that can handle rentals as well as sales.

PHONE PHONIES

Watch out! As an entrepreneur, you’re a potential target for one of the most common—and potentially most costly—business scams: telemarketing con artists selling overpriced, poor-quality office supplies. Here are some tips to protect your business:

• The FTC requires telemarketers to disclose that it’s a sales call, who they are and the total cost of what they are selling—so don’t be afraid to ask.

• Make sure your employees are scam-aware, and establish a procedure for handling such calls.

• Keep track of all orders, and limit the number of staff who are allowed to order.

• If you receive merchandise you didn’t order—and the seller cannot prove you did—you can keep the materials and are not obligated to pay.

• Security. In retail, it’s important to keep tight control over cash receipts to prevent theft. Most of these systems provide audit trails so you can trace any problems.

• Taxes. Many POS systems can support numerous tax rates—useful if you run a mail order or online business and need to deal with taxes for more than one state.

Perhaps the most valuable way POS systems help you gain better control of your business is through their reporting features. You can slice and dice sales data in a variety of ways to determine what products are selling best at what time and to figure out everything from the optimal ways to arrange shelves and displays to what promotions are working best and when to change seasonal promotions.

Reporting capabilities available in POS programs include sales, costs, and profits by individual inventory items, by salesperson, or by category for the day, month and year to date. Special reports can include sales for each hour of the day for any time period. You can also create multiple formats for invoices, accounting statements and price tags. Additional reports include day-end cash reconciliation work sheets and inventory management. Examine a variety of POS packages to see which comes closest to meeting your needs.

TIP

As your business expands and becomes more complex, you’ll need more complex inventory techniques to keep up. Tap outside sources to beef up your own and your employees’ inventory management expertise. Inexpensive seminars held by banks, consultants and management associations offer a quick but thorough introduction to inventory management techniques.

Every business is unique; you may find that none of the off-theshelf systems meets your requirements. Industry-specific POS packages are available—for auto repair shops, beauty and nail salons, video rental stores, dry cleaners and more. In addition, some POS system manufacturers will tailor their software to your needs.

Inventory Turnover

When you have replaced 100 percent of your original inventory, you have “turned over” your inventory. If you have, on the average, a 12-week supply of inventory and turn it over four times a year, the count cycle plus the order cycle plus the delivery cycle add up to your needs period. Expressed as an equation, it would read:

Count Cycle + Order Cycle + Delivery Cycle = Needs Period

For instance, suppose you decided to count inventory once every four weeks (the count cycle). Processing paperwork and placing orders with your vendors take two weeks (the order cycle). The order takes six weeks to get to you (delivery cycle). Therefore, you need 12 weeks’ worth of inventory from the first day of the count cycle to stay in operation until your merchandise arrives.

You can improve your inventory turnover if you count inventory more often—every two weeks instead of every four—and work with your suppliers to improve delivery efficiency. Alternate ways of distributing goods to the store could cut the delivery cycle down to three weeks, which would cut inventory needs to six weeks. As a result, inventory turnover could increase from four times a year to eight times.

Another way to look at turnover is by measuring sales per square foot. Taking the average retail value of inventory and dividing it by the number of square feet devoted to a particular product will give you your average sales per square foot.

You should know how many sales per square foot per year you need to survive. Calculate your sales per square foot once a month to make sure they are in line with your expectations.

Inventory Accounting

If you spend a few minutes considering inventory, how you account for that inventory, and the taxes you must pay on it, you’ll never again question the need for an accountant. However, it’s important for every entrepreneur to have a basic understanding of inventory accounting, even if you rely on your accountant to do the actual numbers. There are two methods used for inventory valuation:

THE ONE AND ONLY

For decades, conventional wisdom warned that depending on a sole supplier could sink your business. After all, such a situation could spell doom if there were any interruption in your supply of products.

 

However, there are some situations where relying on a sole supplier makes sense. For example, if you’re a specialty clothing retailer and most of your sales come from a certain product line, you may find yourself with a sole supplier. In some cases, there is only one supplier who can deliver the raw materials you need to make a product. In other cases, a company strikes an agreement with a sole supplier in return for special pricing deals.

 

The key to making a sole supplier relationship work is to make sure all the right safeguards are in place. Protect yourself by asking suppliers about backup product sources. Find out how many manufacturing plants and distribution centers exist in their product pipeline. Ask what contingency plans they have to supply you in case of emergency. What are their obligations to you in the event of a shortage? Will their top one or two customers get all the products they need, while your business has to wait in line?

 

Keep up-to-date on alternative supply sources that could help your business survive temporary shutdowns from your sole supplier. Use your trade association directory and industry networking contacts to help expand your supplier pipeline. Above all, make sure you feel comfortable entering into a sole supplier relationship before you sign on the dotted line.

The last in, first out (LIFO) method assumes that you will sell the most recently purchased inventory first. For instance, suppose you bought ten ceiling fans a year ago at $30 each. A week ago, you pur chased a second lot of ten ceiling fans, but now the price has gone up to $50 each. By using the LIFO method, you sell your customers the $50 ceiling fans first, which allows you to keep the less expensive units (in terms of your inventory cost) in inventory. Then, when you have to calculate inventory value for tax purposes, LIFO allows you to value your remaining inventory (the $30 fans) at substantially less than the $50 fans, so you pay less in taxes.

AHA!

A letter of credit from a major customer can be used as a form of security in establishing relationships with suppliers. For instance, if you’re starting a business manufacturing garden hoses, you could get a letter of credit from your biggest customer when the order is placed, showing that the customer has contracted to buy the finished hoses. The material to make the hoses is then purchased using the letter of credit as security ... and you don’t have to put up a penny.

First in, first out (FIFO) was the traditional method used by most businesses before inflation became common. Under FIFO, the goods you receive first are the goods you sell first. Under this method, you value inventory at its most recent price. FIFO is usually used during periods of relatively low inflation since high inflation and increasing replacement costs tend to skew inventory accounting figures.

LIFO establishes the value of your inventory based on the most recent quantity received, while FIFO establishes the value of your inventory based on the oldest item in it. You can use either dollar control or unit control with these methods. Match your system to your needs, based on your accountant’s recommendations.

Buying Inventory

Your inventory control system will tell you when to buy replacement inventory, what to buy (and what not to buy), and how much to buy.

The open-to-buy is the amount budgeted for inventory purchases for a given period—usually one, three or four months. Since you are a startup without past performance to guide you, you must calculate the open-to-buy by determining the gross sales you need to pay store overhead and cover your other costs.

Your business plan should give you an idea of the basic stock levels and monthly or seasonal sales volume you need to have dur ing startup. After your business has been up and running for several months to a year, your inventory control system will provide this information.

e-FYI

Trade shows are a great place to show off your products to the public as well as potential suppliers. At the same time, you can check out the competition. They’re also a great resource for networking. To find a trade show in your area, visit The Trade Show News (tsnn.com), an online directory of more than 17,500 trade shows and conferences.

Figure out your open-to-buy using the following formula:

planned inventory	$25,000
plus planned sales	+$25,000
equals	$50,000
less actual inventory	-$27,000
less stock on order	-$13,000
equals open-to-buy	$10,000

Most seasonal retailers calculate their open-to-buy seasonally to accommodate variations in the type of merchandise they sell and seasonal sales fluctuations. Instead of figuring open-to-buy in dollars, some retailers approach trade shows and other merchandise sources with a list of what they need to fill out their inventories and meet sales projections. But whether they work with dollars or by unit, experienced retailers recommend that the owner of a seasonal business should feel free to go beyond the budget or use less than the entire open-to-buy amount. In fact, you should leave room for unanticipated items.

Suppliers

Suppliers are essential to any retail business. Depending on your inventory selection, you may need a few or dozens of suppliers. Sometimes suppliers will contact you through their sales representatives, but more often, particularly when you are starting out, you will need to locate them yourself—either at trade shows, wholesale showrooms and conventions, or through buyers’ directories, industry contacts, the business-to-business Yellow Pages and trade journals, or websites. Suppliers can be divided into four general categories.

1. Manufacturers. Most retailers will buy through independent representatives or company salespeople who handle the wares of different companies. Prices from these sources are usually lowest, unless the retailer’s location makes shipping freight expensive.

2. Distributors. Also known as wholesalers, brokers or jobbers, distributors buy in quantity from several manufacturers and warehouse the goods for sale to retailers. Although their prices are higher than a manufacturer’s, they can supply retailers with small orders from a variety of manufacturers. (Some manufacturers refuse to fill small orders.) A lower freight bill and quick delivery time from a nearby distributor often compensate for the higher per-item cost.

3. Independent craftspeople. Exclusive distribution of unique creations is frequently offered by independent craftspeople, who sell through reps or at trade shows.

4. Import sources. Many retailers buy foreign goods from a domestic importer, who operates much like a domestic wholesaler. Or, depending on your familiarity with overseas sources, you may want to travel abroad to buy goods.

e-FYI

Before you go to a trade show in search of inventory suppliers, do your homework. The Trade Show Learning Center (fastsigns.com/tradeshow-center.html) provides a wealth of information, sign design tips and checklists to help you prepare.

Dealing with Suppliers

Reliability is the key factor to look for in suppliers. Good suppliers will steer you toward hot-selling items, increasing your sales. If you build a good relationship and your business is profitable for them, suppliers may be willing to bail you out when your customers make difficult demands. Remember, though, that suppliers are in business to make money. If you go to the mat with them on every bill, ask them to shave prices on everything they sell to you, or fail to pay your bills promptly, don’t be surprised when they stop calling.

As a new business owner, you can’t expect to receive the same kind of attention a long-standing customer gets right off the bat. Over time, however, you can develop excellent working relationships that will be profitable for both you and your suppliers. Once you have compiled a list of possible suppliers, ask for quotes or proposals, complete with prices, available discounts, delivery terms and other important factors. Do not just consider the terms; investigate the potential of your supplier’s financial condition, too. And ask them for customer references; call these customers and find out how well the supplier has performed. If there have been any problems, ask for details about how they were reconciled. Every relationship hits bumps now and then; the key is to know how the rough spots were handled. Was the supplier prompt and helpful in resolving the problem, or defensive and uncooperative?

Be open, courteous and firm with your suppliers, and they will respond in kind. Tell them what you need and when you need it. Have a specific understanding about the total cost, and expect delivery on schedule. Keep in constant communication with your suppliers about possible delays, potential substitutions for materials or product lines, production quality, product improvements or new product introductions and potential savings.

Suppliers often establish a minimum order for merchandise, and this minimum may be higher for first orders to cover the cost of setting up a new store account. Some suppliers also demand a minimum number of items per order.

Payment Plans

While most service providers bill you automatically without requiring credit references, equipment and merchandise suppliers are more cautious. Since you are just getting started, you will not be able to give them trade references, and your bank probably will not give you a credit rating if your account has just opened.

TIP

While it is almost impossible to get exclusive rights to a manufacturer’s goods, you can ask that a sales representative not sell identical merchandise to another store in the immediate area. However, you may be expected to buy large amounts of the product to make up for lost sales to other stores.

If your supplier is small, the manner in which you present yourself is important in establishing credit. You may find the going tougher when dealing with a large supplier. A personal visit will accelerate your acceptance.

Present your financial statements and a description of your prospects for success in your new business. Don’t even think of inflating your financial statements to cover a lack of references. This is a felony and is easily detected by most credit managers.

Some suppliers will put you on a c.o.d. basis for a few months, knowing that if you are underfinanced, you will soon have problems with this payment method. Once you pass that test, they will issue you a line of credit. This creates a valid credit reference you can present to new suppliers until credit agencies accumulate enough data on your business to approve you for suppliers. Most suppliers operate on a trade credit basis when dealing with other businesses. This basically means that when you’re billed for a product or service, you have a certain grace period before the payment is due (typically 30 days). During this time, the supplier will not charge interest.

Carefully consider all costs, discounts and allowances before deciding whether to buy an item. Always take into account what the final shelf cost of any item will be. The most common discounts are given for prompt payment; many suppliers also give discounts for payment in cash. When you can, make sure you specify on all orders how the goods are to be shipped so they will be sent in the least expensive way.

Occasionally, suppliers grant customers discounts for buying in quantity, usually as a freight allowance for a specific amount of merchandise purchased. Some suppliers pay an increasing percentage of the freight bill as the retailer’s orders increase; others simply cover the entire freight cost for purchases over a minimum amount.

If you order merchandise from distant suppliers, freight charges can equal more than 10 percent of your merchandise cost. Ask what a manufacturer’s or supplier’s freight policy is before ordering, and make sure the order is large enough to warrant the delivery charges. If the manufacturer does not pay freight on back orders, you might consider canceling a back order and adding it to the next regular shipment.

e-FYI

One good source for finding suppliers is ThomasNet.com. This comprehensive online directory lists manufacturers by categories and geographic area.

Become familiar with each of your suppliers’ order-filling priorities. Some suppliers fill orders on a first-in, first-out basis; others give priority to the larger orders while customers with smaller orders wait. Consequently, most retailers specify a cancellation date on their orders. In other words, any goods shipped after that date will be returned to the suppliers. By specifying a cutoff date, you increase the chances that your orders will be shipped promptly and arrive in time.

Give careful attention to shipments when they arrive. Make sure you’ve received the correct amount and type of merchandise, and make sure the quality matches the samples you were shown.