In today’s market, the speed at which goods are delivered to the consumer is important.
Many customers are expecting fast and accurate delivery of their goods and many companies are now offering same-day delivery. This can be very lucrative as businesses who offer this stand to gain from the ‘want now’ generation.
However, it can also be a nightmare for your logistics, especially when your vendor’s turnaround times are slow and you are running low on stock of vital and popular goods.
Being out of stock is a significant problem for businesses, especially in the online market.
And if you are out of stock, you can’t deliver goods to your customers quickly.
Traditional Mindset
Buy Later or Go Elsewhere?
Most sellers believe that when an item is out of stock, customers will simply wait and buy it another time or choose a substitute product instead. While this is a possibility, surveys have found that this is inaccurate.
For instance:
Depending on the product, up to 25% of consumers will just carry on with their shopping and buy no alternative. Another 43% will decide to shop elsewhere.
Therefore, your business could be losing up to 68% of the sales of a particular item.
When it is a very popular product, like any popular trending item, then you face the problem that the customer will turn to a rival. This can be a massive issue for your business.
Today’s online consumers want instant gratification, and unless they’re already loyal to you (because of previous transactions with high customer satisfaction), they’re likely to scout the web for other places to buy the items they’re looking for.
Keep Customers Loyal
Customer loyalty and the online market is a tricky business.
The first goal should always be to limit their exposure to other brands. As soon as the consumer lands on another brand’s page you risk losing them, as they’ll likely start to encounter remarketing from the likes of Google and Facebook, email marketing messages and other promotions from your competitors as well as you.
Plus you’ll be at a disadvantage as you’ve disappointed them while your competitor may have pleased them by having the item in stock.
Competition is fierce, so you want to try to always stay ahead of everyone else by meeting and also going beyond the customer’s expectations.
Speeding Up Your Vendor
The only way to avoid this is to ensure you don’t run out of stock. For you, this isn’t so difficult. You can predict the demand of certain products and monitor levels to ensure you are ordering the right quantities.
However, how do you ensure that your vendors are delivering them fast enough so you never run out of stock?
Sometimes, especially when vendors are busy, their delivery times slacken and you are faced with delays in your delivery.
Yet there will probably be competitors who always seem to have the items in stock. How do they manage this?
The simple answer is that they become the vendor’s preferred customer. This is a customer they highly value and appreciate and are willing to go that extra mile for. It isn’t always the biggest spender, but it is usually their best customer.
By becoming their best customer, you can become the ‘preferred customer’ and receive the great benefits that your competitors now enjoy.
The Quick Step To Being A Preferred Customer
The preferred customer route is not difficult and is relatively simple for your business.
One of the key aspects you should look at is payment. The traditional view of making payments is that you pay as late as you can and receive payments as soon as you can.
While this helps keep bank accounts looking healthy and with interest payments from the bank, it can annoy suppliers, especially if they have already supplied the goods.
So instead of paying as late as you can, try to make the payment as soon as the invoice arrives to you.
This will be noticed by the vendor and you’ll gain the reputation of being a good customer. When you add this to regularly communicating with your vendor about predicted demand and deliveries, you’ll soon find that you will become their preferred customer.
Create a close relationship with your vendors – make their lives easier, and they’ll do the same to you.
Conclusion
Speeding up your vendor is an important issue. You can’t be out of stock or your customers could be tempted by rival firms. To ensure your vendor is delivering fast to you, become the ‘preferred customer’ and enjoy the additional benefits of being on the favorites list.
- Are you a preferred customer?
- Do you pay on time?
Action Steps:
- Target a vendor each month to become their ‘preferred customer’.
- Start paying their bills as soon as they arrive.
- Communicate with them more about demand and deliveries.
- Go to meet them and get to know them personally.