Vendor Managed Inventory – Conflict of Interest Versus Convenience

Vendor Managed Inventory is a trend that is gaining popularity. Some businesses are willing to give up inventory control in exchange for convenience.

Pros and Cons of Allowing Your Vendor to Fill Your Shelves

The obvious “Pro” is that you don’t need to bother with ordering supplies that are offered by your vendor. Your vendor shows up on a regular basis and fills your shelves for you.

The “Cons” are many. Imagine a water softener company that installed your equipment AND provides salt. Do you see a potential conflict? How much inventory are you sitting on for several months? How many product SKUs do you have in stock? Do you really need all of those products? How many products are inferior or more expensive than another vendor’s offering?

Vendor Managed Inventory Causes More Headaches Than Convenience

You’ll still need to juggle multiple vendors to fill the needs of your company. There will likely be some crossover between vendors, causing you to delineate which vendor provides certain products or services. In the end, you’re really not saving any time and may actually be causing more problems.

Choose (and Trust) the Best Vendor for Each Segment of Your Business

Every distributor would love to be a one-stop shop to all of their customers. But, ask yourself if the shortcomings of your distributor (and we all have a few) outweigh the hassle of bringing in another vendor (or two) to supplement what your primary vendor isn’t proficient at.

Contact us to discuss your situation. We can help!