Cloud-based technology is turning out to be the great equalizer of our times. The accessibility and affordability found within the cloud is replacing many of the expensive and complex software options once only available to those organizations with deep pockets. Falling technology prices have also given distributors the opportunity to differentiate themselves from the competition. Today, it’s possible for small to mid-size distributors to go up against the larger distributors and big-box stores to deliver real value-added services to their customers.
With more affordable software and technology solutions at their fingertips, distributors can now streamline and optimize inventory management for customers of all sizes for both high- and low-margin product categories. Additionally, vendor-managed inventory management programs like vending can save customers time and money by reducing carrying costs and stockouts, as well as helping distributors improve efficiency and gain greater customer security.
Below are five ways that distributors and customers can both save money with industrial vending machines and inventory control software.
Distributors Save with Industrial Vending Machines & Inventory Control Software
1. Save Money on Customer Acquisition
Attracting new customers can cost at least five times more than simply keeping an existing one, according to Forbes. Additionally, increasing customer retention rates by 5% can increase profits from 25%-95%. That’s why it’s critical to the distributor’s overall profit margin to minimize the risk of losing them to a competitor. Approaching vending as a value-added service can help distributors increase their share of customer spend. By securing about $800 to $1000 in new business each month — or less than $250 in customer profit — distributors earn enough to cover the cost of placing the machine for free. Once machines are in place, they help to reduce the likelihood that a competitor will try to gain a foothold in the account.
Related: 5 Vending Contract Dos and Don’ts for VMI Success
2. Save Time to Develop New Business
With competition for your customers at an all-time high, distributors must offer value to their customers in new ways. Traditional vendor-managed inventory control is time-consuming. Distributor sales representatives often spend countless hours performing manual inventory counts and replenishing diminished inventory levels — time that could be spent nurturing new leads. Industrial vending machines and cloud-based inventory control software monitor inventory levels in real-time, trigger auto-replenishment, and eliminate the risk of stockouts and overages, freeing up time to pursue new customer accounts.
Related: Vending Can Keep Customer Inventory on Track: Amazon Can’t Do That
Customers Save with Industrial Vending Machines & Inventory Control Software
3. Save on Inventory Consumption
When a distributor customer doesn’t have the right material on hand at the right time, their business suffers. Not only does inadequate inventory control lead to production shortages, shipment delays and poor customer satisfaction rates, but it often results in a loss of revenue. Inventory control software and vending machines help customers improve their inventory tracking capability and employee accountability, resulting in up to 30% reduction in inventory consumption.
4. Save on Carrying Costs
Managing inventory items the traditional way requires a considerable outlay of time and money. Customers not only devote a substantial amount of money keeping mission-critical inventory in stock, but many also must employ expensive stockroom personnel to manage it. When customers coordinate industrial vending machines and inventory control software as part of a lean management program, they gain increased visibility into inventory usage. Now they can see exactly where and how items are being used or misused, right down to the department or employee.
Related: 4 Reasons You Need A Vending Machine for Your Facility
5. Save Time Searching for Items
With industrial vending machines and inventory control software, customers can streamline operations at their facilities for increased productivity and profitability. Inventory control software offers customers the opportunity to track and manage inventory usage, ensuring that the necessary material is always on hand. Plus, vending machines allow for point-of-use dispensing closer to the work areas, minimizing time spent searching the facility for items needed in production.
If you would like to learn more about 1sourcevend’s inventory control software and industrial vending solutions, request a free demo today.