inventory ?

Marty

Dollars sitting on a shelf are bad bad bad, Not sure but it seems to be part of whats being taught,pay slow,bill fast and don't order anything untill its sold to keep cash from being tied up in product.

joel_19

inventory

I can understand people running out of stuff at this time of the year but the last few years it's been happening year round . Here's my story ...

I sold several 14 SEER heatpumps from Trane as replacements . The potential sales are over 700 heatpumps for them and me . I ordered the ones I sold a month in advance , I was assured they would be there . A month goes by i call up I get " ohh whoops you really wanted those ummmm."

I have been waiting 2 weeks for a York heatpump and it will take at least two more . During the summer I was told to sell as many York Affinity units as i could so i did only to have to frequently wait to get them .

Right now , today , I have a customer with a blue made in the USA boiler (we did not install it). None of the local so called supply houses have the part she needs . They have ordered it from the blue boiler people who could not say if it was in a local warehouse or if it must come from blue boiler land halfway across the country. Of course those same supply houses will happily sell me lots of white toilets and blue boilers . One even sells T.V.s and kitchten appliances now . What don't they have ? parts , nada , zilch practically zippo . After all they needed some place to exspand that fancy showroom for homeowners .

Note these are all American companies not just Euro as some would imply . I find myself stocking more and more parts , because I can't count on the wholesalers to stock stuff like they used to esp parts . Is this just in N.E. or everywhere ?

My only wholesaler i can count on is Capco energy who ironically enough sells Viessmann and Buderus . I don't think they are better because they sell Euro stuff . They are better because they just try harder .

Constantin

Interesting Point

Many companies seem to have made paying late an art. One national retailer I know pays at least one supplier on a 180 day basis. Some buyers have even gone as far as the big three car makers, requiring their suppliers to deliver on 5-15% price reductions every year. New dutch-auction products like Ariba make it easier and easier for purchasing managers to squeeze every bit out of their suppliers.

In the end though, I personally believe the winnings will be short-lived. In the auto business, hundreds of smaller suppliers went out of business or merged into ever larger titans until some of them were as large as the companies they supply. At that point, they're large enough to say no.

Carrefour is one of the largest retailers in the world (a direct competitor to Walmart), yet, allegedly, they pay their suppliers ASAP. You might think that flies in the face of reason, until you hear the rest of the story. Allegedly, someone made a cost-of-capital calculation, realized that Carrefour could get cheaper loans than its suppliers, and that in return for prompt payment said suppliers were willing to cut their prices more than they upcharged their products to account for "slow" payment processes (working capital).

Like Steve Ebels, I expect this industry to gravitate towards direct shipment from warehouses sprinkled around the country instead of filling the distribution chain with product and hoping for the best. Someone like an auto-parts distributor would be ideal for this, as they already know how to ship heavy, bulky things, and can leverage their extant distribution network to do more.