Posted On: April 4, 2022
Planning your inventory orders is like meal prepping. You could wait until you hear the quiet rumbles of low inventory, and you may be able to find the product to satisfy your customers’ hunger.
But if you plan your inventory out ahead of time, you’d have a leaner and more efficient business. Like meal prepping, there’s probably a short period where it’s difficult to train yourself to think about your orders ahead of time. Your business hasn’t crumbled so far, right?
Once you establish the habit, though, you’ll find it increases your business's potential for growth. So, let’s get to the meat and potatoes!
Placing Orders in Advance
Planning orders involve placing orders in advance based on how much product you predict you will sell over a specific time. In very basic terms, you pull previous years’ sales and add expected growth, and voila! You have order forecasting.
Fill-in orders give the flexibility to place more immediate orders. We know it is hard to think about planning orders with the current supply chain challenges looming. However, it is important to maintain this habit of looking ahead to the future needs of your business. Like an unhealthy diet, skipping out on forecasting and planning orders can have a creeping effect on your business. This will silently chip away at margins, growth, and customer satisfaction.
Avoid Being Out of Stock
Keeping stocked shelves this past year has been nearly impossible. No one could have predicted that inventory would have dried up the way that it did. But what makes an HVAC supplier unique is our ability to adjust.
At this point, pretty much everyone in the HVAC industry has a visceral reaction to the word ‘backorder.’ Planning orders puts your product in the queue with the manufacturer long before Mr. Last-Minute-Order, so you get your product faster and avoid delays.
Readily available stock means you can give your dealers & contractors hassle-free, on-time deliveries. Customers crave reliability and ease of doing business – and they’re willing to pay for it.
The power of word-of-mouth is not to be underestimated. When you consistently have happy customers, they talk. 74% of consumers say recommendations of people they know affect their buying decisions. So, by consistently having stock, you can become the go-to for contractors and dealers on the hunt for a reliable distributor. Oftentimes, you can reap more immediate rewards by talking to your manufacturer directly about planning orders.
Placing planning orders gets your business in the habit of looking at past and current sales to anticipate future demand. It encourages your team to review where and why things didn’t happen the way you expected.
- Do you have less foot traffic?
- Is your mix different?
- Did you have a staffing change?
Introspection can be a powerful driver of company growth. It’ll give insight into your business’ health so you can course-correct or make needed changes. During your account planning sessions, get together with your marketing team on upcoming campaigns they plan to run. Mapping this out in advance will tell you when to ramp up your orders for items they are doing a big push for.
When deciding how to grow your business, planning is critical. This will establish your reputation as a reliable brand and build customer loyalty. Contact us to learn more about how to differentiate yourself in the HVAC industry!