International Profit Associates Presents:
Business Fundamentals for Distributors
Below is a compiled list that focuses on key business elements such as sales, purchasing, inventory,
warehousing, delivery and administration that are key variables in distribution companies.
Sales:
- Sound sales policies in selection, compensation, training, territorial assignment and supervision
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Knowledge of gross margin and profitability by account, product line, product, salesperson and in
some cases, individual order
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Scheduled periodic reviews of results with present products, product lines and research into
potentially profitable additions to present lines
Purchasing:
-
Clear cut policies of authority and responsibility of those involved in purchasing to prevent
duplications and omissions
-
Maximum coordination starting with sales forecasting back through purchasing and inventory control
to assure optimum inventory turn, minimum dollar inventory investment and good client service
- Exposure to all vendors to assure stocking most saleable items at lowest costs
Inventory:
- Inventory levels established properly to take seasonal variations into consideration
- Procedures established to prevent capital tie up by accumulation of obsolete and slow moving items
Warehouse:
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Layout designed to achieve straight line flow from receipt of order to the shipment ready for
the dock
- Security measures followed to reduce pilferage
- Proper training and tools supplied to warehouse supervision
Delivery:
- Routes studied and scheduled to assure maximum time spent servicing clients and obtaining new accounts and minimum time wasting activities
- Controlled maintenance and repair costs
- Careful check of loading and unloading to prevent pilferage and shrinkage
Administration:
- Authority and responsibility of key employees clearly defined
- Management information available to measure and control key personnel performance
- Office procedures and paperwork sufficiently automated to accomplish objectives
- Sound credit and collection policies
