Whether you are a seasoned company store pro or a newbie digging for answers, this question is usually at the top of your mind all the time.  It certainly is the question I get asked most often when consulting with current and potential clients on their online webstores.  While I would love to scream “INVENTORY!” each time this issue comes up, I know there are many factors involved as to why a company may or may not be interested in committing to inventory upfront.

Let’s face it; the economy is still rough.  Does it seem to be getting better?  That depends on who you ask and what industry they are in.  And at EMB we are painfully aware that when budgets get cut, the items we provide are usually the first to go.  Fortunately, business has been good enough to keep the embroidery machines running (perhaps that’s just a perk of in-house, cost effective operations?).  Back to my point…many companies know they need a company store but they don’t have the staff or the funds internally to manage it.  I know this too, which is why we never require any client to keep inventory if they have a webstore with us.  But, before both parties sign on the dotted line, shake hands and say “I do”, it is necessary I review the PROS and CONS of both.

Let’s start with the CONS.  It’s quite obvious that the biggest con to webstore inventory is the upfront cost.  How will I know it will move?  What if I am stuck with this same inventory 6 months from now? Corporate is giving me no money to make this happen, so I could I possibly have inventory?  All of these are great questions and real examples of the issues my clients are facing today.  First of all, a true company store partner and consultant will find ways to make your inventory move.  After all, isn’t this why you hire them?  Quarterly reviews, Google Analytics, employee questionnaires, promotional sales and email marketing communications are all tactics I use to ensure the inventory and cash are flowing in and out of your store at a rate you approve of (and earn you a congratulatory pat-on-the-back from upper management!).  Often my clients think they need to invest tens of thousands in inventory upfront and that couldn’t be farther from the truth.  You’d be amazed by how much inventory $4500 can get you.  The key is to pick a few standard favorites and buy in bulk.

Now, to the PROS.  This might come as a surprise, but without inventory, the lead time on a single decorated garment can be anywhere from 2-5 weeks.  Ouch.  If you don’t think the employees at your company won’t mind waiting that long, think again.  Even though you may plaster the 2-5 week lead time all over your webstore, most people won’t read or pay attention to it.  So, as the days turn into weeks, they become more agitated and are not afraid to tell co-workers how bad the lead time…ahem…sucks.  The negative verbal reviews of your store can have catastrophic effects on your potential to make future sales.  The average lead time on inventoried product is 24-48 hours, plus applicable shipping time.  This is more in line with what employees are expecting from the company webstore you set up and they will proudly show off their new garment or promotional product to others…thus prompting more sales. 

Besides lead time, the other biggest PRO of inventorying product is price.  The distribution world that EMB and every other distributor operate in is driven by bulk purchases.  The more you buy, the more you save.  To clarify this a little more, here is a good example:  A Nike golf polo your sales team and executives have their eye on retails at $64.  Without inventory, you won’t be able to put that item on your webstore for much less than that price.  But, if you purchase a mere 48 pieces (6 small, 12 medium, 12 large, 12 x-large and 6 xx-large) you can offer that polo at a savings of 15-20%.  Imagine how much faster that Nike polo will move when the employee (who is usually spending their own hard-earned cash) knows they are getting a good deal on it?  Actually, most promotional products require minimum purchases so you won’t get mugs, pens, bags etc on your webstore without purchasing anywhere between 12 and 50 upfront.

So there you have it, the most basic PROS and CONS of webstore inventory.   No matter which way your company situation forces you to go, make sure you chose the right partner to help you effectively manage it all.