QUESTION
- (Paraphrased) I’m not sure if you can blog about this but how much would an opening order be for a major retailer and how would you pay for production? Isn’t that a problem?
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ANSWER
This was the first question that we asked ourselves before even approaching the large retailers. There is no point pursuing a sales order if it is not possible to fill the order. There is no problem for us here at all. Initial orders are given a longer lead time than replenishment orders. We have already ensured that we could make any required quantity within the initial lead time, and utilize our operating lines with specialized, reputable, commercial inventory and accounts receivable funders to do so. Then, from the rapid recovery of costs through the accounts receivable financing, replacement inventory would be manufactured immediately so as to be available for replenishment to the customer from a minimum/maximum on-hand inventory level. Using this method, operating capital is not consumed in the initial inventory build for the largest retailers.
It is probable that an opening order could be 1-2 cases of each size, per store. This is our recommendation to the chains but only confirmed when their Purchase Order is received. It’s not wise to load-up the customer with more than they need. It is better to provide customers with more frequent turns. Where the special display units are installed, more inventory is recommended.
