Editor's Blog

Make Money By Exiting The Warehouse Business

May 11, 2009
If there’s a common mistake contractors make it’s that they think they can manage their in-house warehouse and save money.

For years, I’ve traveled around this country working with contractors and if there’s a common mistake they make it’s that they think they can manage their in-house warehouse and save money.

By far, those who have listened and done the proper steps have found they can save money, time and minimize shrinkage (fancy word for theft!) by letting outside professionals run their warehouse business for them.

I don’t get a commission nor do I recommend any one vendor. But, I do recommend you find a Primary Vendor and test these steps to exit the warehouse business:
    1. First put a dot or a date on a box or item and see if it sells. That first step has always proven very telling to my clients. This is a must.

    2. At the same time, ask your current suppliers to provide you with a list of items you’ve bought for the past year.

    3. Create a basic truck stock inventory list that is designed to have 80% of what the Tech needs 80% of the time. It works great for my clients and it’ll be indispensable to you as well if you are able to set strict minimum and maximum stocking levels for each item. This is where professional vendors really help.

    4. Remember to impress on those who are vying to become your Primary Vendor the combined buying power you will now have when they develop their pricing.

    5. It’s also important to know that prior to doing this you’ll want to know what you’re currently paying for materials as a percentage of sales to your suppliers.

    6. After you select one Primary Vendor (no more than two if you absolutely must), have them come in and label bins and storage cabinets, address the proper type of shelving, how to keep the warehouse locked up and how to track the minimum and maximum stocking levels based on your buying habits.

    7. Place anything you can hang in pre-sealed plastic bags on a peg board so you can have some visual accountability.

    8. Make sure there is a very friendly credit system for returns that come back that go back to the vendor and not back into your warehouse so you don’t throw off your inventory levels.
Do what you do best and let them do what they do best and you’ll both profit!

PM Columnist Hosts
Online Growth Seminar

Business consultant Al Levi, who writes a monthly column for Plumbing & Mechanical and blogs for other BNP Media trade magazines, will present an online business seminar, “Growing Big In A Recession,” June 1, at 12 noon CST.

The June date will be the first part of six total seminars with the others taking place every two weeks. Each online seminar is expected to last one hour.

Levi already held his first Grow Big seminar series last January and has since added features to enhance to the experience. Participants will receive forms, procedures, a “Grow Big Optimizer” CD and have the opportunity to e-mail Levi for further support up to 60 days after the series is over.

For more information and to register, log on to www.GrowBigInARecession.com. The website also includes several video testimonies from contractors who took part in the first seminar series and got their phone ringing again and their companies growing again.

Anyone interested in taking part will need to register by May 25. Levi provides geographically exclusivity to participants within a 30-mile radius of their businesses. There is a charge for the seminar, but there is also a money-back guarantee.
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