{"id":3589,"date":"2021-08-17T08:58:10","date_gmt":"2021-08-17T13:58:10","guid":{"rendered":"https:\/\/www.rmservicing.com\/?post_type=articles&p=3589"},"modified":"2021-08-17T08:58:10","modified_gmt":"2021-08-17T13:58:10","slug":"scan-based-trading-how-to-grow-retail-doors-and-take-control-of-store-level-inventory","status":"publish","type":"articles","link":"https:\/\/www.rmservicing.com\/articles\/scan-based-trading-how-to-grow-retail-doors-and-take-control-of-store-level-inventory\/","title":{"rendered":"Scan-Based Trading: How to grow retail doors and take control of store-level inventory"},"content":{"rendered":"\n

Suppliers are embracing scan-based\ntrading<\/a> (SBT) as a way to open retail doors and take more control over\ntheir store-level inventory. These programs allow suppliers to be more flexible\nand agile, which can reap large benefits to their profit margin. Read on to\nlearn what scan-based trading is, how it can expand distribution, how it\nempowers store-level inventory control, and what suppliers need to know before\nadopting it.<\/p>\n\n\n\n

What is Scan-Based Trading?<\/h2>\n\n\n\n

There are two primary types of retail trading: traditional\nand scan-based.<\/p>\n\n\n\n

In traditional trading<\/strong>, inventory is owned by retailers. But in scan-based trading<\/strong>, it\u2019s owned by the supplier until the point of sale (POS) where it passes to the retailer, who sells it to the customer.<\/p>\n\n\n\n

The two main benefits of scan-based trading, though there certainly are more, are that suppliers are able to get more information about store-level activities and have more control over their store-level inventory.<\/p>\n\n\n\n

How Does Scan-Based Trading Expand Distribution?<\/h2>\n\n\n\n

Retailers love scan-based trading because it minimizes their risk. They don\u2019t own the inventory until it\u2019s already sold. This is in stark contrast to traditional trading where the purchase of inventory is negotiated upfront and the retailer owns the goods in their store. This shift, while unimportant to the consumer, can make all the difference for suppliers. <\/p>\n\n\n\n

For one thing, less risk for retailers means they\u2019re more likely to say \u201cyes\u201d to new products and new supplier relationships<\/strong>. Why not try out new products that you could turn a profit on, without any of the risk? Of course, that\u2019s not to say every retailer will open their doors wide for any scan-based trading supplier. There are still hurdles that will need to be overcome, like brand fit, category fit, and negotiations. But. With less financial risk, one enormous hurdle disappears.<\/p>\n\n\n\n

Then, there are the inventory shrink costs. In the traditional model, the retailer will be responsible for all costs associated with shrinkage, as they are responsible for all aspects of inventory management. However, in scan-based trading, the shrink costs are shared<\/strong>. Exactly what the split should be is figured out during contract negotiations.<\/p>\n\n\n\n

How Does Scan-Based Trading Help Suppliers Take Control of Inventory?<\/h2>\n\n\n\n

The other big win for scan-based trading is more inventory\ncontrol. There are two big parts of this: better distribution management and\nthe ability for suppliers to create their own planograms. <\/p>\n\n\n\n