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As the US government rushes to implement its economic stimulus package and the economy continues to slow, merchants need a strategy to manage the high cost of carrying inventory and control its impact on operating costs. CommerceHub®, the Supply-on-Demand platform for supply chain integration and fulfillment solutions, has developed an industry report, “Managing the High Cost of Inventory in Today’s Challenging Economy,” on implementing or expanding a Supplier-Direct Fulfillment (SDF) strategy to control the high cost of inventory and logistics. With funding markets locked up and lending rates high, many merchants are in a crunch to finance inventory capital. Many multi-channel merchants are using a SDF strategy to reduce inventory and associated expenses. In SDF, orders are sent directly to suppliers, manufacturers and distributors, who fulfill and ship merchandise directly to customers. The merchant never holds inventory on their balance sheet and typically only purchases it after receiving payment from the customer. “The cost of inventory is often the largest asset on a merchant’s balance sheet,” said Steve Hamlin, CEO of CommerceHub. “Carefully managed inventory is a key metric to profitability in the best of times, in the current down economy, the impact is critical.”
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