Worked scenario
Crates out, crates back, margin gone
In daily-perishable distribution the return rate per outlet is the whole economics, and it is usually known only in aggregate.
3 min read
A distributor supplies outlets daily with product that expires quickly. What is not sold comes back, and coming back is normal.
Aggregate returns hide the cause
A single daily return figure tells you there is a problem and not where. Per outlet, the distribution is usually skewed — a handful of outlets generate most of it.
Over-ordering is rational for the outlet
A retailer would rather return than run out, because the return costs them nothing. Until the distributor can show a specific outlet's rate, there is no basis for changing the standing quantity.
What changes
- Returns recorded per outlet and per route
- Supply quantities adjusted against each outlet's actual off-take
- Return rate visible as a percentage, not a crate count
- Outlets that consistently over-order identified
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