Intermediary Customer Purchasing from the Product Producer

Obtain Steps: The Obtain steps include all activities preceding the selling of the product. These activities include the costs of identifying potential suppliers and stocking the product.

Resources: Reduce resources required for the use of the product

1. Money – Reduce the money the customer uses with the product

b. Reduce the customer's spending on People, Purchases or Capital costs the customer uses with the product itself

Capital costs

No. SIC Year Note
1 2000 1992 In 1992, P&G announced it would eliminate 15-25% of its slower-moving SKUs over 18 months. It was reacting to retailers' threats to drop slow-moving P&G SKUs.
2 2111 1992 RJR produced smaller packages of many of its products to cater to convenience outlets and drugstores.
3 2200 1993 Milliken found its retailers left with large overstocks in items that had been ordered at the beginning of the season. It created a new ordering system allowing retailers to make mid-season corrections in a series of separate reorder stages.
4 2389 1995 While it can take up to a month to get in new Levi's, VF's jeans generally arrive within three days of an order.
5 2834 2005 For years, the relationship between drug wholesalers and manufacturers centered on "speculative buying." Under this system, wholesalers could purchase drugs ahead of manufacturers' price increases, then hoard the drugs until higher prices kicked in. Drug manufacturers are trying to put an end to this practice. They want to keep supply and demand more in balance. To that end, drug makers decided to impose inventory management agreements, or IMAs. Under these agreements, drug makers pay wholesalers not to speculate with inventory. But those payments don't make up for the wholesalers' lost gains from speculation.
6 3711 2004 Some of the nation's biggest auto retailing groups citing higher interest costs and thinner margins will no longer crowd their lots with slow selling cars and trucks to help auto makers avoid production cuts.
7 5399 2001 Amazon has a new tale of brick and mortar partnerships with the likes of Target that will put Amazon on the road to profitability. Target is estimated to be doing anywhere from $100 million to $450 million in sales online each year.

<<Return to Obtain Steps