Never understood Rondo's inventory control

[Gergo]

Obviously Rondo is doing something really well because they've been around for a while now, but I really never understood their inventory control. I mean, they get an extremely small number of something, like four pieces, which sell out in maybe a couple of weeks, and then their out of stock of that item for months upon months upon months. I don't see how that's good. I mean if there only going to get orders in every six months or so then why not ordered 12 guitars instead of 4, that way they will have enough to sell until the next batch comes in. Is it perhaps that the market is that limited? Can someone explain why this would be a good approach to inventory control?

[mickey]

Must be because of signing "Azrael: ???

[honyock]

It is expensive to have capital tied up in stuff sitting in a warehouse when that is the only thing you do.

If one gets what one knows will sell, and leaves the customers wanting for more, people will be more apt to come back to the site over and over.

It is actually a pretty great sales technique, artificial scarcity.

[Gergo]

It is expensive to have capital tied up in stuff sitting in a warehouse when that is the only thing you do.

If one gets what one knows will sell, and leaves the customers wanting for more, people will be more apt to come back to the site over and over.

It is actually a pretty great sales technique, artificial scarcity.

That does make sense. It just seems to me like if would be better to be out of stock for 6-8 weeks rather than 6 months. But I really don't know

[uwmcscott]

Obviously Rondo is doing something really well because they've been around for a while now, but I really never understood their inventory control. I mean, they get an extremely small number of something, like four pieces, which sell out in maybe a couple of weeks, and then their out of stock of that item for months upon months upon months. I don't see how that's good. I mean if there only going to get orders in every six months or so then why not ordered 12 guitars instead of 4, that way they will have enough to sell until the next batch comes in. Is it perhaps that the market is that limited? Can someone explain why this would be a good approach to inventory control?

You answered your own question in the first sentence - because it works for them There's no "cookie cutter" approach to running a business that works every time, otherwise everyone would do it. Rondo was one one of the first into the "value guitar" business so they do have that going for them, and I am willing to be that Kurt and his staff are doing a lot of hard work in the background to keep it going. Every business has a huge layer of inner workings that you never see.

As far as the inventory piece, who knows - maybe it's based on his suppliers capabilities. Or maybe its based on his own capital planning. In any case i'm sure it's not just pulling numbers out of the hat.

And frankly - if there is a secret to Kurt's madness, he's not going to tell anyone what it is... he worked hard to build it so it's his to keep. So you ( or anyone else ) not understanding his methods is by design.

[Gear_Junky]

I imagine there's been some higher demand during the covidiad with all the people cooped up at home. They're not going to buy Gibsons, they'll buy cheap good guitars. Just think if a relative asked you for a first guitar for their kid type of advice

[tobijohn]

He's mentioned in the past that he's also at the mercy of the builders, they have other much larger customers whose orders take priority over his, both in production scheduling and quantity. Also according to him, exacerbating things lately have been virus induced supply chain interruptions and component shortages...

[voodoorat]

MOAR BASS UKE PLZ

[Brendan]

I remembering seeing old product on his site that would linger for along time. I'm sure he's just trying to avoid tying up money in inventory.