Customer owned inventory is what it implies: you own the inventory and have allowed the vendor to manage it for you. It, too, can have risk, but risk that can be avoided if set up with the right accountability parameters. When you own the inventory, it is clearly a matter of control. The vendor should present marketing suggestions and product ideas but you ultimately hold the trump card for any decisions made regarding your inventory. "Carrying" the inventory yourself allows 100% control over how the inventory is used and purchased. It is the ultimate option for those who wish to keep a strong hold on any decision making related to their branded products.
As we did with vendor-financed inventory, following are a series of questions that you should ask yourself if you prefer to use this method of inventory management:
As with most stores, what ultimately should become the barometer for success is not how a store is initially set-up, but ultimately, how a store performs. Does the end-user (your colleagues, employees, franchises) receive the correct merchandise in a timely manner? This is the ultimate question. Issues like eCommerce and inventory management are critical, but when you boil a successful program down to its most essential ingredient, the ability to deliver the correct product in a timely manner is of utmost importance. I've written about my conversation with Gary Kelly, CEO of Southwest Airlines before (here). I mentioned in that article the subtle secret of logistics operations, which is: when you are operating at your very best, no one really recognizes it, everything is as it should be, on time and error free. The "recognition" of course, comes from customers who become clients with repeat business (the best kind of attention one could desire).
Making a store decision on anything less than final delivery of goods ensures failure, if not the least, constant turn-over with vendors (which equals frustration for everyone). Though inventory financing is an important issue, it is not the most important issue when it comes to a healthy process to deliver branded materials to your audience.
For our next installment, we'll look at one of the most significant Company Store trends growing today, a solution that will help alleviate your need for inventory: the virtual company store solution (known also as "just-in-time" inventory or "on-demand").
The material in this post has been lifted and modified from my Company Store Planning Guide, located here.
