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Ramona said..
Chandlers can not afford to keep all the stock, there is a hell of a lot of money tied up in all those shiny bits hanging on racks. Whitworths don't keep all the stuff in the catalog in their shops and if it's expensive stuff you want you need to call them a couple of days ahead and they will have it ready for you.
Yep. Distribution is a tough gig. A healthy disty business means you invoice your inventory value every month (so 12 stock turns a year.)
A warning indicator is when you invoice half of your inventory every month (6 stock turns per year). That's manageable, but its so easy to let it blow out. If you are not monitoring it carefully then in no time at all you're in trouble.
So if you carry 200K in inventory, you should be invoicing 200K per month. If you can't you need to reduce inventory.
It takes a lot of work to balance having enough stock to satisfy demand without blowing out inventory values. And inventory is where your working capital gets tied up.
I would argue that 12 stock turns would be a tall stretch for most sailing disty outlets, I feel for them.