Friday, October 2, 2015

How to eliminate carrying costs to increase profitability

Imagine that this is your warehouse full of inventory.

If you view a typical Inventory using the standard 80 20 Rule, you can easily break it down into five 20% increments:

The first 20% increment are your top sellers that account for 82.7% of your sales activity
and the second 20% accounts for 11.75%of your sales activity. Together, the top selling 40% of your inventory accounts for 94.45% of total sales!

 Now look at the next three increments of inventory:

The third 20% only accounts for 2.3%.
Fourth                                          1.85%
Fifth                                             1.40%

Together, the bottom 60% of your inventory accounts for ONLY 5.55% of sales activity!!  And, the cost of carrying this bottom 60% outweighs its profits, and eats away at the profits of the top 40%

But, what if you could move all of this bottom 60% of your inventory over to the GPS Inventory Bank?

It could completely eliminate your inventory carrying costs! Carrying Costs average 25% or more per year. And you would have immediate availability to any item needed for future customer service or production demands. Plus your market and brand integrity is always safe with GPS!

What would this do for your company?

Reduction of inventory and its annual carrying costs = Increased Profits and Improved Cash Flows
And what can you do with all of this freed up warehouse space?  Add new and more profitable products? Open up space for new production?  Reduce your building footprint?

Whether you are ready to write off inventory and get out of your facility, or you just need to free up valuable warehouse space, GPS has a solution for you!