Above: Greater insight empowers dealers to make proactive, data-backed decisions
MARGINS UNDER PRESSURE Margin protection has become increasingly challenging as competitors with greater buying power drive down prices across the industry. Despite this evolution, local and regional merchants have a competitive edge in their agility. If they use it strategically, their ability to move quickly can be a key differentiator. Aligning inventory management with pricing and margin goals enables merchants to make smarter purchasing decisions, fine-tune promotions, and reduce reliance on reactive markdowns. When inventory turns are low, the cost of holding products increases, and obsolete or aging stock often has to be discounted, further shrinking already tight margins. Ultimately, inventory performance directly affects profitability.
THE TECH THAT CONNECTS THE DOTS Making alignment work at scale asks more questions than spreadsheets and manual reports can answer. That’s where technology is required. Modern electronic point of sale
systems (EPOs) designed for the timber and building materials industry can provide businesses with the visibility and tools needed to synchronise inventory, pricing, and margin in real time. These solutions allow merchants to monitor inventory aging, track SKU-level profitability, and automate pricing changes based on cost fluctuations or sales velocity.
Greater insight empowers dealers to make proactive, data-backed decisions, whether that involves strategically discounting slow- moving items, raising prices on high-demand products, or adjusting stock levels ahead of seasonal shifts. According to a McKinsey analysis, companies that adopt a product and platform approach to ERP upgrades can better manage costs and improve outcomes, enabling more agile and efficient operations.
FROM PROCESS TO MINDSET At the end of the day, the most impactful shift isn’t just operational, it’s cultural. For pricing, inventory, and margin strategies to
work in harmony, teams across the business must be aligned. That means sales teams need to understand margin contribution, not just revenue targets. Purchasing managers should regularly review inventory turnover and product-level profitability to ensure optimal performance. Leadership needs to foster a shared language around value and performance, not just volume. With that alignment in place, results quickly become visible across the business. Gross margins improve. Stock moves faster. Inventory investments become more strategic. And perhaps most importantly, the organisation becomes more resilient and better prepared to respond to market swings and customer needs with confidence. For timber merchants looking to future- proof their operations the message is clear: resilience isn’t built on sales volume alone – it comes from smarter inventory strategy, tighter margin control, and pricing decisions that respond in real time. Getting this right could well be the differentiator that sets your business apart. ■
Above: Inventory has long been one of the most significant investments for building materials retailers and wholesalers
www.ttjonline.com | July/August 2025 | TTJ
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