It is a common think in business for some products to be out of stock in a particular retail outlet. This has the implication that the retailer risks providing for the customers demands. Such can however be eliminated by conducting another retailer for the supply. Further, sharing inventory is important in saving time and cost of long-term managing of an open order from the customer since failure to qualify its availability in other retail outlets calls for the long chain of requesting the product from the manufacturer (Kruz.
Et al, 2004). Another advantage to retailers sharing inventory is that it ensures that similar vendor prices are relatively similar (Kruz. Et al, 2004). In the modern society, capitalism has dictated for anti-competitive practices among business in the quest for ensuring sustainable survival in the marketplace. Such are best evident in the pricing and promotion of products by businesses. Nevertheless, sharing inventory increases information sharing among business on product availability as well as prices.
Therefore, retailer sharing inventory is vital in mitigating anti-competitive business practices in the marketplace through promotion of openness among businesspersons. In addition, sharing inventory among retailers has been praised for providing an outlet for slow moving inventory (Kruz. Et al, 2004). The sole purpose of a business is to maximize profits. This is best realized through optimization of business sales. However, products demand vary from region to region, a factor which can oversee low demand for a particular product in a given community while witnessing high demand of the same in another region (Kruz.
Et al, 2004). Based on this reason, sharing inventory significantly serves to provide an outlet for slow moving products to areas of high demand. This improves the financial health of a business. Sharing inventory also brings with it the advantage of promoting product reputation, an element that improves customer loyalty and thus sustained business for retailers (Kruz. Et al, 2004). Customer loyalty to particular products is dictated by the sustainable availability of the product in the market.
On the contrary, just like other things, uncertainties can evidently compromise the supply of such products from the manufacturer of distributor. However, this is easily resolved by sharing available products among retailers or referring customers to particular retailers posing the products (Kruz. Et al, 2004). This serves to ensure customer satisfaction, thus promoting their confidence in the company. Still, the practice serves to increase retailer’s revenue due to large scale sales to similar retailers. Large scale selling of goods enjoys the advantage of quick recovery of asset for a retailer (Kruz. Et al, 2004).
On the other hand, sharing inventory can significantly influence this business practice especially when only one retailer happens to hold particular products which are in high demand. This is because they gain the advantage of supplying such products to other retailers in large quantities. In addition, sharing inventory among retailers can be seen as crucial in ensuring early detection and thus mitigation of potential product supply in the market (Kruz. Et al, 2004). References Kruz, W. , Stratigakis, A. , & Hunt, G. (2004). The High Performance Enterprise. Bloomington, Indiana USA: Trafford Publishing.