How do I Better Manage My Margins With Customers?

by | Sep 9, 2014 | Suppliers

If you’re looking for a better way to manage your margins with your customers, whether a retailer to its end users, or a supplier selling to retailers, you need to look at all aspects of your business, not just whether your sales price is a certain percentage over your costs.

For starters, if you’ve been manually inputting all of your orders, advanced shipping notices (ASNs) and invoices, consider how much that costs. How many people are responsible for those documents, and how many documents can they input in a day? How much do you have to pay during busy seasons, like the holidays or peak sales seasons? What if you could share all that information with your trading partners electronically, with a couple mouse clicks? What if you could process orders, send or receive ASNs, and even have the ASN trigger your invoices automatically?

What about receiving an ASN just a day, or even a few hours, before the truck actually shows up at your warehouse? If you have to manually check in each case and product that could take days. But if you received an ASN that matched up with properly labeled boxes, you could do it in hours. One retailer told us that a truck without an ASN will take four workers two days to unload and check-in. With an ASN, it takes a single person four hours. That single worker can process 10 trucks in a week, while the four workers can only do 2.5 trucks. Imagine what that would do to your bottom line if you could reduce the number of staff hours and increase productivity.

As a supplier, think about what it will do for your cash flow and profits if invoices were sent automatically, as soon as you sent your ASN. The retailer’s accounts payable department will have your invoice a few days sooner, meaning you can get paid a few days sooner. And it happens immediately, rather than your finance department taking three days to process the paperwork.

These three tasks either all cost more to do manually, or will eat into your profits with the extra costs.

 

SPS Commerce Blog Team

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