Curious if vending is right for your customers’ industrial supply needs? Wondering if it’s worth the investment? Before we talk about why vending is an ideal solution for managing MRO and industrial supplies, we want to address the hidden costs associated with poor inventory control.
Uncovering the Real Costs of Ineffective Inventory Control
When considering value-added solutions like vending, it’s easy to focus on the price of the unit. You may ask yourself questions like:
- “How much is this going to cost me?”
- “Will I recoup my investment?”
- “Am I going to lose sales?”
The bigger questions should be: Will this investment help my customers achieve better inventory control and strengthen our partnership? Will it establish me as the preferred supplier for that customer, there by being awarded new business that was not possible before?
The truth is inventory is an essential, but often overlooked, function of business. Many businesses struggle with ineffective inventory visibility and overspend thousands every year on supply costs. Inventory becomes a liability when:
- Excess inventory collects dust on a shelf, tying up capital that could be invested elsewhere.
- Employees begin to hoard items for fear of running out of mission-critical supplies.
- Employees waste time looking for misplaced inventory.
- Missing inventory leads to increased production downtime and expensive spot buys.
These inefficiencies interrupt your customers’ production schedules and drive up costs. What begins as a small oversight may snowball over time and threaten your customers’ profitability. If they cannot deliver the goods on time and in budget, their customers lose trust. It is not just the potential loss of a sale that’s problematic; it could be the loss of future business.
When this occurs, customers evaluate their vendors. They will recognize the partners who solved their inventory challenges and saved them money over the long haul. And they will notice who didn’t.
As a distributor, you hold the key to making your customer’s business a success. How will they remember you?
What is Industrial Vending? Read full white paper here.
How Much Does an Industrial Vending Machine Cost?
In the past, technologies like inventory control software and vending machines were so expensive only the bigger national brands could afford the investment. Smaller distributors were left in the dust. Today, cloud technology has leveled the playing field and lowered the cost of entry so that distributors of all sizes can take advantage of modern inventory control solutions.
Some providers offer vending machines that can cost over $20,000—but higher costs are not indicative of superior quality. Vending machines like our helix coil units and lockers have a modest starting price point of less than $5,900 and come with an easy-to-use touchscreen.
Other vendors may offer introductory deals that seem attractive at first, but the appeal will quickly fade as hidden costs begin to pile up. Vending startup and continuation costs may include machine rentals, software leasing fees, feature add-ons, training costs, delivery charges, operating fees, functionality upgrades, as well as service and installation charges. All those features are included with your purchase at 1sourcevend.
What’s My Return on Investment with Vending?
According to Grand View Research, the industrial vending market is expected to exceed $4.6 billion by 2027. That means even if you don’t invest in vending as a value-added offer for your customers, your competition likely will. Additionally, an increasing number of small-to-medium size enterprises and manufacturing facilities are adopting industrial vending solutions for their cost-savings benefits. The COVID-19 pandemic has also placed a stronger emphasis on employee safety, making the personal protective equipment market among the fastest-growing product segments.
That aside, let’s learn how you can recoup your vending investment, offer customer support, gain new business and protect your business from the competition with vending.
Increased Customer Stickiness
Want to protect your customers from competitors and reduce your churn rate? Research shows that attracting a new customer can cost five times more than keeping one, according to research compiled by digital consultation firm Invesp. What’s more, if you can increase your retention rates by 5%, you have the opportunity to increase profits anywhere from 25%-95%.
One way to protect your business is to solve customer problems like inefficient inventory management and excess spend. Customers are always looking for better solutions that save them time and money and reduce waste. Vending can help.
Increased Customer Spend
Afraid that the reduction in inventory spend will hurt your bottom line? The truth is that while vending can reduce the number of unnecessary purchases your customers make, it’s also opening the door to additional spend. You likely weren’t getting 100% of your customers business. By showing them how you can help them cut costs and save money through vending, we have seen distributors make significant monetary gains in additional business each month. These include sales in product categories your customers may have been spending elsewhere.
Worried that you can’t recoup your investment? It just takes approximately $250 in additional profit per month to justify the cost of placing a machine from 1sourcevend at a customer location.
Labor Cost Reduction
Today’s sophisticated, yet easy-to-use vending machines combined with cloud-based inventory control software can reduce distributor labor costs. When a customer’s inventory items hit a designated minimum, it triggers a purchase order—reducing the need for in-person inventory counts and quote generation.
Time to Develop New Business
Since inventory control software monitors inventory levels in real-time and triggers auto-replenishment, your reps are free to pursue new customer accounts rather than performing manual inventory counts. Or that time could be spend nurturing existing customer accounts and gaining larger market share.
How Does Vending Improve Supply Management for Customers?
Not convinced your customers are interested in vending? According to an article in Reliable Plant magazine, 82% of senior manufacturing executives reported inventory reduction was a major concern for them and would like refocus that money into other initiatives including new product development, marketing, acquisitions, modernization and more.
Vending and inventory control software is one way to help your customers achieve their goals. Vending offers your customers greater visibility into their current stock and usage over time. The added visibility allows for more precise ordering, fewer spot buys and more control over purchasing.
Additionally, vending and inventory control software are an effective way to track and dispense MRO supplies and PPE items at the point of use for increased production, accountability and better safety compliance. Plus, industrial vending software tracks inventory usage right down to the employee, reducing inventory consumption, shrinkage and waste by up to 30%.
Interested in learning more? Visit our website.
1sourcevend’s point-of-use inventory solutions and software are designed by distributors for distributors looking to differentiate themselves from the competition. Learn how we can help you choose the right inventory management software and American-made vending solutions to empower your customers. Request a demo.