Wednesday, November 5, 2008
2008 Buzzword: CHANGE
The elections are finally over. Both of the presidential candidates preached the same message to the American people...CHANGE is needed. Whether you voted Republican or Democrat, you were hoping that the incoming administration would bring change in the way Washington, D.C. conducts business. We will, indeed, have changes in the players. Let us hope that the change leads to a stronger economy and a better life for us all.
Pondrx.com is also instituting some changes. For years, my philosophy has been to buy product in small quantities and replace my inventory as it sells. The wisdom here is that you do not have a lot of capital invested in inventory at any one time. Sales drives the purchasing and you do not buy more unless your inventory level drops below a certain level. This sounds good but there is one major flaw in this type of system. The flaw is that you are not offered price breaks that are available for larger purchases. On top of that, the freight factor decreases with larger shipments. What all of this means is that because I typically pay more for the product and the freight to get in my warehouse than some of my competition, my pricing has been higher on some items.
I am now in the process of consolidating my purchasing. This should allow me to significantly reduce the prices on several of my products. I will, however, pay very close attention to the products that have expiration dates to be sure that I am selling only fresh stock. That will never CHANGE!
Pondrx.com is also instituting some changes. For years, my philosophy has been to buy product in small quantities and replace my inventory as it sells. The wisdom here is that you do not have a lot of capital invested in inventory at any one time. Sales drives the purchasing and you do not buy more unless your inventory level drops below a certain level. This sounds good but there is one major flaw in this type of system. The flaw is that you are not offered price breaks that are available for larger purchases. On top of that, the freight factor decreases with larger shipments. What all of this means is that because I typically pay more for the product and the freight to get in my warehouse than some of my competition, my pricing has been higher on some items.
I am now in the process of consolidating my purchasing. This should allow me to significantly reduce the prices on several of my products. I will, however, pay very close attention to the products that have expiration dates to be sure that I am selling only fresh stock. That will never CHANGE!
posted by PondRX News @ 3:28 PM
