Scan-Based Trading – What The Other Guys Say

Here at Park Merchandising, we specialize in Scan Based Trading (SBT), inventory distribution, and comprehensive inventory management in boutiques and mass-merchants across the USA. We currently provide complete merchandising services in over 30,000 storefronts nationally.

What The Other Guys Say…

1. Major chains like Target, Dollar General, Walgreens, and CVS are turning to scan-based trading as an option to stay competitive. But what is it? And, how does it work for retailers and suppliers? The traditional inventory stocking method for retailers is purchasing their inventory from suppliers. Retailers then recoup their initial cost outlay by selling the goods to consumers. However, in scan-based trading, the retailer does not pay for products until they sell.
2. The advantages inherent in scan-based trading include increased sales for retailers, as well as reduced operating costs, and the ability to eventually pass those savings on to consumers. Suppliers using this business model have the potential to increase sales, optimize stock, improve visibility, and control of inventory.
3. There are few disadvantages inherent in using a scan-based trading model. For instance, one might consider the initial cost of the technological investment involved to be a disadvantage. However, any company that adopts SBT stands to quickly recoup these costs based on the efficiency of the model.
4. An excerpt from the white paper, Fact Finding and the Single Copy Newspaper Business: Picking Your Scan Based Trading Partner, describes both perspectives of this scenario.

   “When distributors face risks, they respond by reducing the risk,” wrote Professor Bloom. “Other than raising the price to the retailer, the most common way to mitigate risk is to cut supply, aiming for a sell out.” By aiming for a sell out, a distributor remedies the reconciliation challenge of reverting scan sales into the “deliveries less returns equals sales” format of their route accounting software. The reason is simple – the sales nearly always equal the delivery, because the returns are zero.

5. ‘Pay on Scan’ (POS) is AutoZone’s newly proposed payment system that is causing ripples throughout the company’s supplier base. AutoZone claims this system is a “win-win” for both the retailer and the supplier. However, from the suppliers’ perspective, the ramifications of such a system are potentially huge. Manufacturers are greatly concerned that this move to a POS format would seriously impact their businesses.

WHAT WE SAY:

An essential component of a successful Scan Based Trading program is product management, inventory control, and merchandising. Park Merchandising’s custom systems optimize product management, sales, and result in decreased costs all the way through the supply chain.