Today’s retailers in the food and beverage industry face a consistent challenge: maximizing their offered inventory, while minimizing inventory and carrying costs. Of course, these two goals fight each other, and scan-based trading (SBT) can be an optimal strategy for achieving success. In fact, major outlets like Dollar General, CVS, Walgreens, and Target already use SBT to stay competitive.
So what is SBT, and how does it benefit retailers?
Under traditional inventory models, retailers will purchase their inventory upfront from their suppliers. They then recoup their initial cost (and make a profit) as they sell goods to consumers.
SBT differs in that the retailer does not pay for products or have ownership of them until they sell, meaning they never have to recoup their costs; they only increase their cash flow at the point of sale. Put in its simplest terms, the supplier owns and is responsible for inventory until the point of sale.
Benefits of scan-based trading include:
However, retailers aren't off the hook. They must collect and transmit all their point-of-sale (POS) transactional data (like dates, time ranges, and days of the week) to the appropriate supplier to maintain their pricebook. And they must self-invoice based on previous sales. This is difficult for retailers using legacy POS systems or struggling with data synchronization issues. Issues that have affected the adoption of SBT in many product categories.
For retailers who want to take a step back from their SBT agreement knowing that their supplier has the accurate data they need, third-party scan based trading accounting software can take care of POS data sharing, price book maintenance, and even generating the invoices for retailers to pay.
And simple, automated SBT agreements benefit retailers so much that many are updating their POS systems to improve data synchronization today.
Additionally, aligning supply and demand at the point of sale is essential to helping fast-paced SBT relationships generate greater results within the highly regulated food and beverage industry. When POS data sharing is poor, suppliers won’t know what’s selling well, hurting their performance and reputation. This, in turn, will hurt the retailer’s profitability if they’re losing sales as their customers face empty shelves, and may cause the SBT agreement to go sour.
Scan-based trading accounting software is designed to prevent this misalignment, meaning retailers can take a step back from inventory management without worry as suppliers are set up for success.
Scan-based trading accounting software reduces administrative tasks and improves logistics between suppliers and retailers buying on consignment. Here are just some of its core benefits:
Consignment trading is revolutionizing the retail industry. And scan-based trading accounting software can help retailers gain the transparency and automated processes they need to truly take a step back from their inventory strategy and let their suppliers take control with full support. The result is they both increase their profitability with less time and effort.
Want to learn more about how scan based trading accounting software optimized these inventory arrangements and data sharing? Check out one of our latest blogs.