Famous Tate Sets New Inventory Policy

New rules stating customers must now take delivery within two weeks are freeing up warehouse space at Famous Tate

New allocation rules are freeing up crammed warehouse space

By Andy Kriege, YSN

BrandSource member Famous Tate reports that most manufacturers in most of its key categories have been making great strides in production and shipping over the last few months.

The improvements mean that thousands of appliances are now readily available for delivery. After struggling through a prolonged period of backorders, the Tampa-based business is now seeing few shipping delays. Any remaining hiccups are largely limited to luxury brands, the chain reported.

However, the supply chain’s progress has exacerbated an existing problem: too much sold inventory sitting in Tate’s crowded warehouse. The dealer began experiencing a significant backlog of customers’ orders, which are filling the facility beyond capacity, and has recently taken steps to address the problem.

The idle products are primarily destined for customers who are building or remodeling homes and themselves have been impacted by delays in areas like windows, flooring and cabinetry since the start of year. Like other BrandSource members, the protracted delays have compelled the dealer to warehouse these orders until their customers’ homes are ready for them.

“Closing dates for new homes are being delayed four to six months or even longer,” said General Manager Claude Ward. “But these customers were told to make their appliance selections first to ensure availability. And now dealers around the country, just like Famous Tate, are the ones stuck holding them.”

As excess inventory ballooned, the business was forced to temporarily lease a second warehouse to accommodate the merchandise that was sold and on put on hold.

“We simply could not continue to have a warehouse full of ‘sold inventory’ with nothing available for new customers,” Ward said.

In response, the management team implemented new allocation procedures that identify readily available models and only allocates them to customers who can take delivery within 14 days. On the 15th day, an automated report “un-allocates” orders that are not already scheduled for delivery and makes them available to others.

“We had to ‘untrain’ our staff from the directives of the past two years and help build their confidence in this latest program revision,” Ward said.

The new inventory allocation policy has already begun to free up warehouse space, making room for more merchandise that is available for immediate delivery. However, while special order models, including built-in products, will continue to be held for customers, these items will require a minimum deposit of 25% and full payment once the shipment arrives at the warehouse.

“We must set the customer’s expectations at the point of sale by clearly explaining our terms,” Ward said. “Just as important, we do not want to lose customers to our competitors when we have so much product just sitting in our warehouse that could be delivered to those who need it now.”

BrandSource, a unit of YSN publisher AVB Inc., is a nationwide buying group for independent appliance, furniture, mattress and CE dealers.