Customers Can't Find Stock, But Manufacturer Has Stock - What To Do?
Customers Can't Find Stock, But Manufacturer Has Stock - What To Do?
Large CPG Manufacturers are sometimes stuck with regards to their distributors -- many times their customers are looking for inventory but it's not available.
On the other hand, their distributors don't have enough stock to supply to their retail partners. The problem is not that there isn't enough supply (the brand has plenty) it's that the channel is not efficient enough anymore.
Obviously the manufacturer could go direct to the retailer, but the consequences of that are terrible - upset customers! Upset sales leaders! Broken trust.
One idea in the middle of this is something I call "vendor of last resort" to your further downstream channel partners.
The channel is designed to serve your customers. But if it's not serving them well, a brand should reserve the right to step in and provide a pool of virtual inventory that retailers can pull from to smooth out any gaps to guarantee availability.
This might require that brands learn how to either dropship directly to the retailer's customers, or must itself understand how to accept orders that conform to the retailer's standards (rather then shipping products to their large distributors).
This often requires new technology systems (order management, in particular) that many brands don't possess to manage pools of virtual inventory for their channel. And sometimes there is no organizational experience or sales willingness to deploy such systems, despite the clear customer benefits.
In this way, the brand becomes the "vendor of last resort" to a high-demand channel to ensure that your customers are not disappointed by timing, forecasting, or other reasons that the right product is not available at the right time.
What are some of your solutions to uneven supply in the channel without upsetting your top customers?
