Make the Sales Call – Inventory Management (Rule 1.5)

During the Sales Call (Customer Visit), the most important task of the Salesperson is to Generate Order. Here we put emphasis on the word “Generate” instead of the command “Get”. Take is a passive form by definition of the word. This means that in this case, the seller mostly only chooses the order given and prepared by the owner of the outlet. Generate is an active process where the Seller leads the process. He assesses the needs, proposes the order quantity, creates a supporting Profit Story that will back you up with your proposal, overcome objections, and close the sale.

To truly master this process, the Seller must be equipped with specific tools and knowledge sets. One of the most important things is the skill and knowledge of inventory management at the point of sale. By default, you can think of this as the job of the store owner, as he orders, pays for the product, stocks it, sells more, etc. The truth is that the property owner is managing too many things at once: property premises (rent, utilities, maintenance), staff (employment, training, supervision), legal obligations (bookkeeping, taxes), and on top of it all. this has many product categories, among which your portfolio is one of many.

From this it is clear that the owner of the point of sale can never be more focused and trained than his properly trained salesperson. During the Order Generation process, for each individual SKU, it is important to take many things apart: sales history, trends and expectations, seasonality, brand strength, safety stock, etc.

The “Rule 1.5” Inventory Management model offers you a good balance of Order Generation, taking into account History, Trend and Safety Stock. The formula for rule 1.5 is:

ORDER = WEEKLY SALES x 1.5 – STOCK

Explanation: The order is created based on the sales of the last week, but is increased by 50% in case of increased sales, which is reduced by the current stock. This is in accordance with the Safety Stock maintenance policy. In case the sales increase in the next period, the stock is safe until the next sales call. If the opposite happens, that is, next week’s sales are lower than the previous one, there is no fear of overstocking, since the formula will balance the next order (reduce it).

Orders increase as the total sale increases, but they also decrease in the period when the total sale decreases. This makes this Inventory Management mechanism very useful for both the Supplier and the Client, since it ensures a fluid supply of products, avoids OOS, balances the invested capital, reduces obsolete stocks, increases the customer’s purchasing experience consumer and maximizes profitability.

This model is suitable for all FMCG products. The model is explained in more detail in a free toolkit at [http://www.biz-development.com/Sales/4.6.%20Sales%20Call.htm]