Forward Buying
2 Future Business Opportunities at Your Fingertips
If you’re a wholesale or retailer, inventory is one of your greatest assets. There are two major business opportunities available that can help you improve your bottom line. They are:
1. Promotional products with short-term lower prices
2. Products that will experience a future price increase
Why? Promotions and vendor price notifications happen regularly. If you’re properly prepared for these situations when they occur, you can forward buy inventory. This results in additional profits because you buy low and sell high ahead of price increases.
Forward buying is a significant tool for wholesale and retail businesses. It can DOUBLE OR TRIPLE your gross margin on short-term purchases, making significant contributions to bottom-line profitability.
HIMPACT® removes the guesswork from Forward Buying!
The Forward Buy module in HIMPACT automatically generates the optimal order quantities. This daily analysis ensures that you receive the full benefit from each forward buying opportunity and do not miss out on any deals. This will also eliminate the need for Post-it® note reminders, running Excel® macros, and the potential for renegade buying.
HIMPACT® Finds Higher Profits for Any Deal
HIMPACT’s Forward Buy Module leverages each profit opportunity, no matter how complicated the structure of the supplier’s offer: Short term Discounts, Extended Dating on Cash Terms, Price Increases, or any combination of these.
The terms of each deal and the financial policies set by your management team for Inventory Investing are automatically combined to drive smarter replenishment decisions, daily. Your forward buy order quantities are integrated into regular replenishment orders along with the regular order quantities.
For each deal, HIMPACT calculates the most profitable purchase order quantity and integrates those quantities with the regular replenishment orders. By proactively managing your product cost changes in HIMPACT, you can generate additional margin dollars and increase your overall profitability.
Forward Buying Simulation Tool
To help your team streamline your vendor negotiations, we developed a new “on the fly” simulation tool. You can input various scenarios into the system for any set of deal conditions, on any item, see the results, and/or develop your own alternatives to present to your suppliers.
Forward Buying in Action with HIMPACT®
In this example, we have a fantastic deal:
- 10% current discount, 10% future price increase, and an extra 90 days in cash terms.
- Based on the deal terms and the Effect Rates of the CFO, a 131-day Forward Buy is calculated, generating an additional profit of $3,055.91.
With one click of the mouse, this Forward Buy order is integrated into today’s Replenishment order.
