May 6, 2016 at 8:11 pm #456
i notice that Purple Dragon has been out of stock for weeks. i was considering ordering some when i re-upped my Incredible Mood supply a few weeks back.
just out of curiosity, how do you go about trying to keep things in stock and how long does it take for your inventory to be restocked once you realize you’re about to go out of stock?
does the manufacturer end up having to wait an indeterminate amount of time to source ingredients from suppliers one by one until everything is available to begin assembly? do you stock up with 500 or 1000 canisters at a time and then just monitor the supply until it gets down to 100 or so and then reorder?
obviously being out of stock sucks, just wondering about the logistics of this.May 18, 2016 at 10:38 pm #457
In general it takes 4-6 weeks to get product in when re-ordered. It’s usually 3-4 months for your first batch. Ideally your manufacturer stock a large portion of your ingredients beforehand and thus getting ingredient in time is not an issue. If there’s a premium supplier it’s usually just as well to go ahead and buy it yourself and keep it stored there for several runs.May 18, 2016 at 10:39 pm #458
I’ll add that inventory risk for small companies is very real and salient simply because your runs and purchase sizes aren’t going to be large enough to get priority a lot of the time, so plan accordingly.May 19, 2016 at 11:30 pm #459
If it’s not too personal can you elaborate a little more on some of your issues with the supply chain?
This issue has popped up into my head as well because, being a little guy, I’m not quite sure how this works and don’t imagine I’ll have much sway. But it’s not like I have any idea how this works anyway.
I’m just a guy in his room without an actual product to sell.May 23, 2016 at 9:11 pm #461
This is an excellent question.
In general most of your ingredients will be sourced by the manufacturer so buying them individually will not be an issue.
The larger issue is that it’s a volume based business and most new customers have a low lifetime customer value and hence manufacturers will have a hard time justifying going out of their way for them.
It’s a volume based business by its very nature and so there’s a natural trend to make order minimums as high as possible. So when times are bad there’s often a rising tide of higher order minimums and more stringent capital requirements which can wash a lot of small players back to sea.
So if you start small you have to make sure you have a high growth rate as a hedge against this sort of event, which is all but inevitable sooner or later.
If you can get to 2k-3k order volumes on your order you should be relatively insulated from supply shocks but if you’re below that you’ll always be swimming at the bottom of the barrel and will be very sensitive to these sorts of dynamics.
Most manufacturers have a few huge clients who do 50-100k bottle runs and they’re usually what keep the lights on for those guys. They’re typically MLM companies (which do the most volume) and retail guys like GNC.
Everyone else gets squared away into the other 20%, and if that’s where you reside in the industry no one really gives a damn about you.May 23, 2016 at 9:18 pm #462
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