By Bret Ridgway
If your fulfillment partner isn't a print-on-demand facility they should maintain some inventory on hand so that orders can be fulfilled as soon as they come in. You're going to need to establish reorder points and reorder quantities for your various products. In other words, when you get down to some predetermined quantity of a product your fulfillment house will automatically make more.
These values are usually initially determined for new products by your best guesstimate of what quantity of product you expect to sell in a certain period of time. Estimate too high and you invest more in inventory then you needed to up front.
Estimate too low and you risk running out of product and having customers wait longer to receive their orders. This is especially a challenge on larger new product launches where anywhere from a few hundred to a few thousand units of a product might be sold.
Over time you'll get a feel for how much of a product you're going to move on a consistent basis. You can then adjust reorder points and quantities based on this volume. The objective is to never run out of inventory entirely so orders can be fulfilled promptly.
You'll need to decide if you want to automatically have your fulfillment partner rework any product returns and place back into inventory for you.
You'll maintain inventory within some range so that additional units are produced and put into inventory before you've entirely run out of your stock of that product. It is much easier for your fulfillment partner to pre-establish these guidelines and to not have to await your approval every time you get low on product to go ahead and produce more.
If you're going to update a product you'll need to decide what you want done with the existing inventory of that product. Do you continue to ship the previous version until you run out and then begin shipping the revision? Or do you rework the previous version to make it consistent with the new version? Or do you
version until you run out and then begin shipping the revision? Or do you rework the previous version to make it consistent with the new version? Or do you throw away all old inventory and immediately switch to a revised version?
The answer is influenced by different factors. How significant the updates to the product are is a key factor. If you have a multiple component product and, for example, you made changes to only 1 disc out of 10 in a set then you'll probably want to rework the existing inventory. But, if there are several updates to the product then the quantity remaining on hand of the older version may be the deciding factor.
Just be sure that the product you ship to your customer matches up with what they purchased from your website or from you at an event. Don't deliver an older version of a product to a customer if the latest whiz bang concept covered only in the newer version is what induced them to purchase in the first place.
The questions you should ask:
• What are your recommendations on the establishment of a reorder point and a reorder quantity for my product?
• How do you handle it if I don't want to pre-approve automatic production of more units?
• What is the process when I want to update an existing product?
Bret Ridgway is co-founder of Speaker Fulfillment Services, a company dedicated to helping information marketers. To pick up your own FREE copy of his new book "The Book on Fulfillment: The Critical Questions You Must Ask Any Potential Fulfillment Partner" visit [http://www.TheBookOnFulfillment.com]http://www.TheBookOnFulfillment.com.
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