Utilize scan-based trading to reduce inventory costs.

Retailers face the ongoing challenge of balancing carrying costs with unsold inventory while balancing the optimal amount of stock to keep up with omnichannel demand. An innovative way to meet this challenge is with Scan-Based Trading (SBT), a widely embraced model that harmonizes supply and demand by merging them at the retailer’s point of sale. SBT generates operational savings for the retailer and vendor in a symbiotic inventory ecosystem.  

What is Scan-Based Trading?

Scan-based trading is a business model that revolutionizes the traditional supply chain dynamics between suppliers and retailers, particularly in the realm of consumer-packaged goods (CPG). Under this model, the supplier retains ownership of the product until it is scanned at the point of sale in the retail store. 

How Does SBT Work?

SBT eliminates the need for retailers to wait for sales to recover inventory costs and turn a profit. Unlike conventional retail approaches where the retailer is on the hook for inventory management, SBT grants suppliers ownership of inventory management. In exchange, the retailer grants visibility into point-of-sale data such as time ranges, dates, and days of the week to the appropriate supplier.  

The supplier generates an invoice using the transmitted purchase details and sends it to the retailer. SBT creates a consignment selling model where suppliers maintain ownership of inventory until the items are scanned and purchased, automating product transfer and accelerating payment distribution.  

Types of Retailers Using Scan-Based Trading

Scan-based trading is commonly employed by various types of retailers, including grocery stores, convenience stores, drugstores, and mass merchandisers. These retailers deal with a diverse range of products, and scan-based trading helps streamline their inventory management processes. 

Want to learn more about how SBT helps manage CPG inventory? 

Benefits of Scan-Based Trading

Reduced Inventory Costs

One of the primary advantages of scan-based trading for retailers is the reduction in inventory costs. Since suppliers maintain ownership of the products until they are sold, retailers do not bear the financial burden of unsold inventory sitting on their shelves. 

Increased Product Availability

Suppliers play a more active role in managing product placement and availability under the scan-based trading model. This ensures that shelves are adequately stocked, improving customer satisfaction and sales. 

Enhanced Data Accuracy

Scan-based trading provides retailers and suppliers visibility into up-to-date POS data, allowing for more accurate demand forecasting and inventory replenishment. This data-driven approach enables better decision-making and inventory optimization. 

Improved Collaboration

Scan-based trading fosters closer collaboration between suppliers and retailers. By sharing sales data and insights, both parties can work together to identify trends, optimize promotions, and develop strategies to drive sales and profitability.  

Retailers shrink liability by only having to pay for inventory they sell at the register. Suppliers no longer need to check in each delivery at retail store locations, saving both time and money.  

Take Control of Your Inventory With SBT

Scan-based trading offers a mutually beneficial solution for suppliers and retailers seeking to optimize their CPG supply chain operations and drive business growth. By leveraging data, fostering collaboration, and streamlining inventory management, SBT empowers retailers and suppliers to enhance customer satisfaction, reduce costs, and stay competitive in today’s dynamic retail landscape. 

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