Summary
Companies that are fine tuning their merchandise presentation, actively seeking out third party logistics (3PL) to minimize inventory risk, and employing more dynamic order replenishment systems are going to be the winners in this market.
Analysis
It is imperative that US based companies take care of the relative markets in the US, before venturing beyond the border for profits that may not materialize. Although the potential gross margins dollars in emerging markets, such as, China, Russia, India, and Eastern Europe, are enticing, US companies need to take care of home first. The key to success at home involves better buying/planning processes and inventory control in a very tight US economy. The successful merchants have been more actively seeking out measures to improve their profitability through investing in their supply chain. In most cases, that's where the pain is. Numerous US companies are taking very high principal risk on inventory and having very little control over margins. In essence, they have become agents for overseas factories. And that's a very difficult way to run a business. Companies that are fine tuning their merchandise presentation, actively seeking out third party logistics (3PL) to minimize inventory risk, and employing more dynamic order replenishment systems are going to be the winners in this market. Stronger technology based replenishment strategies will be the key driver of business moving forward. It's a big deal and it's difficult to do, but no pain no gain.
