164 THE DISTRIBUTOR’S LINK NELSON VALDERRAMA HOW SMART DISTRIBUTORS CAN SURVIVE AND THRIVE AS TARIFFS KEEP INCREASING from page 122 Like many businesses, you may have periodic inventory checks being done to make sure you are stocking properly, but in the two months (or more likely, six months) between those checks, you could be missing trends in your business that suggest there are big savings being missed. Again, this is where a data analytics platform can help you track and evaluate your inventory constantly in real time, and be presented with alerts when trends emerge or inefficiencies appear. Likewise, customer categorization can be your very best friend when looking for those little edges where you can start to see real efficiencies emerge. One of the most common mistakes I see distributors making is misallocation of time and resources simply because they fail to properly categorize their accounts based on their true business impact. By digging into the data, you’ll be able to set prices appropriately for VIP accounts, steady growth accounts, core business accounts, and accounts that are a net drain on your business. Getting ahead of the future means optimizing each little micro-facet of your business now, and your data is the key to doing it easily at scale. Rethink Your Supply Chain Now Perhaps an even bigger weapon data presents for tariff-minded distributors is the opportunity to re-adjust supply chain operations to minimize price increases of in some cases avoid them at all. Here are some quick tactics you can take: ¤ Evaluate Your Inventory - Know what you have, what you need and what you can spare. Consider things like overstocking today at 10% to avoid paying 25% later ¤ Diversify Your Suppliers - Start conversations with suppliers in unaffected nations, or find a second supplier to use as leverage for price decreases with your main supplier. ¤ Project and Prepare for Everything - Create detailed projections of what your business model and operations would look like given hypothetical changes of 10, 15, 25+% to know what you will need before you need it. ¤ Start Negotiations Early - The sooner you can start conversations with your partners, the more likely you will be to find some common ground that can save you money while maintaining standing relationships. ¤ Get Automated - Things like supplier sourcing and product pricing can actually be largely automated and save you tons of time and money. Don’t underestimate the value of automation just because it is new or foreign! Think Forward, Act Now In the end, everything you do to prepare for rising tariffs is a boon to your business, so be as proactive as you can. Take a hands on approach with regulators by filing exclusions or communicating directly with customs officials, work with consultants to project your business model against multiple scenarios, and most of all just really take a look at what you can do better TODAY. The only thing we know about this global trade war is that we won’t know much until we’re living it, so the winners will be those who focus on fixing what the CAN control. Don’t let the murmurs distract you from setting yourself up for success! Bottom line: Fix your prices, find efficiencies, put your failsafes in place, and face down tariffs knowing you’ve put your business in the very best position to win. NELSON VALDERRAMA
MWFA/PAC-WEST/NFDA JOINT CONFERENCE OMNI HOTEL, SAN DIEGO, CA - MARCH 13-16, 2019
in the Spring 2019 issue of 6 DISTR
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