How Much Inventory Should You Stock?

When discussing business tactics with owners and managers of pest management companies, there remains a common theme, “How do I grow my business and do it profitably?”

You see there are many forces currently working against the small and mid-sized pest management professional that make it difficult to drive incremental profits, forces like inability to buy products at the same costs as the big guys.
So when all of your marketing and sales efforts have paid off and you have won
a bed bug treatment job, you need to take advantage of the opportunity to drive customer satisfaction and incremental profits.

One way to help capture that additional  $100 or so per room or per residence on any bed bug  treatment job is to include the sale of a certified bed bug proof mattress encasements as part of your preemptive pest management solution. The only way to be able to do this profitably is to accomplish two things at once.

  • Have the right units in stock and ready to go
  • Purchase encasements directly from a distributor so you know that you will be in stock

Now I know that the idea of having inventory on hand can be a bit intimidating, how do you know what to buy and what if it’s the wrong sizes and quantities? The purpose of this essay is to help you put away some of those fears and anxieties and focus on being prepared to service your customer. Let’s assume that you are servicing a local commercial property like a hotel or assisted living center and they report that 1-2 rooms have a bed bug infestation.
Or perhaps you receive a call from a high end residence in a neighborhood that you have been trying to grow your business in and the owner just found bed bug in her spouse’s luggage returning from a business trip. Are you prepared to capitalize on either situation? If so can you do the following?

  • Educate the caller on the best methods for treating their property?
  • Schedule a visit to assess the situation and recommend a specific treatment plan
  • Execute the treatment plan and install bed bug mattress, box spring and pillow encasements that will prevent re-infestation and allow for earlier detection while making a great profit on each unit and still selling them at a competitive price?

If you answered yes to these questions then you are in great shape, but if you didn’t and want to learn more about how you can and should answer yes then let’s continue this dialog.

Let’s look at it by the numbers.

Say the average hotel room has either 2 Full sized beds, 2 Queen sized beds or 1 King sized bed, and let’s agree that the average high end residence has a guest bedroom with a Full sized or Queen sized Mattress, a master bed room with a King Sized mattress and 2 kid’s rooms each with 2 twin sized beds. If you agree that these amounts appear reasonable than you would agree that stocking the following units would be an excellent investment in being ready to service any of these customers immediately.
Any 3 hotel rooms may require up to:

  • 6 full sized mattress encasements and matching box spring encasements.
  • 6 queen sized mattress encasements and matching box spring encasements.
  • 3 king sized mattress encasements and matching box spring encasements.

Any residence may require up to:

  • 1 King size mattress cover and matching box spring cover.
  • 1 full size mattress cover and matching box spring cover.
  • 1 queen size mattress cover and matching box spring cover.
  • 4 twin sized mattress covers and matching box spring covers.

So a total of 44 units of bed bug encasements will properly equip your company with the right inventory to respond to almost any individual bed bug treatment call at a private residence or commercial property.

Now if the numbers above sound logical the next step is to review how many bed bug treatments you are performing in a given time frame.

If you know that you receive and are awarded 2-3 bed bug jobs per week like the ones described above, you should take that initial stock order and multiply it by the number of calls per week. This will give you enough inventory to run the jobs, cover the beds at risk and enter a replenishment order at the end of each week. By doing this you should get your company in a rhythm of buying, selling and profiting from the inventory you have on hand.
While having the right inventory on hand is an imperfect science, the approach presented above will position you to handle most jobs that require immediate attention, you can always order more as needed if you win a job that has more rooms that need encasements.

If you were able to win 1 bed bug job per week with the above scenario you would be earning an additional $100 per job on average, which would mean an additional $5,000 of profit per year conservatively. Based on industry average costs that would be a 300% return on your investment for the cash required to purchase the 44 units recommended above. That is a great return and equates to a no-brainer to stock up now.

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