During the Sales Call (Customer Visit), the most important task of the Seller is to Generate Order. Here we place emphasis on the word “Generate” rather than “Take” order. Taking is passive by definition of the word. This means that, in this case, the seller mostly only chooses the order given and prepared by the owner of the point of sale. Generate is an active process where the Seller leads the process. Assess needs, propose order quantity, create a supporting Profit Story that will support you with your proposal, overcome objections, and conclude sales.
To truly master this process, the salesperson must be equipped with specific knowledge sets and tools. One of the most important things is the skill and knowledge of Inventory Management at the point of sale. By default, you may think that this is the job of the point of sale owner, as he orders, pays for the product, stores it, sells it, etc. The truth is that the owner of the point of sale is managing too many things at the same time: premises of the point of sale (rent, utilities, maintenance), staff (employment, training, supervision), legal obligations (accounting books, taxes) And on top of all this it has many product categories, among which its portfolio is one among many.
From this, it is clear that the store owner can never be more focused and skilled than his properly trained salesperson. During the order generation process, for each SKU individually, it is important to take many things separately: sales history, trends and expectations, seasonality, brand strength, safety stock, etc.
The “Rule 1.5” Inventory Management model offers you a good balance in Order Generation, taking into account History, Trend and Safety Stock. The formula in rule 1.5 is:
ORDER = WEEKLY SALES x 1,5 – STOCK
Explanation: The order is created based on the sales of the last week, but it is increased by 50% in the event that the sales increase, than it is reduced by the current stock. This is in accordance with the security stock keeping policy. In case the sales increase in the next period, the stocks are safe until the next sales visit. If the opposite happens, that is to say that the sales in the next week are lower than in the previous one, there is no fear of overstocking, since the formula will balance the next order (reduce it).
Orders increase as the sale increases, but it also decreases in the period when the sale is reduced. This makes this Inventory Management mechanism very useful for both the Supplier and the Client, since it ensures a fluid supply of products, avoids OOS, balances the invested capital, reduces obsolete stocks, increases the consumer’s shopping experience. and maximize profit.
This model is suitable for all FMCG products. The model is explained in more detail in a free toolkit at [http://www.biz-development.com/Sales/4.6.%20Sales%20Call.htm]
