Subjects - Business

Before you order your first batch of inventory from the supplier, some of that inventory should already have been pre-sold, i.e. you have a written and signed order from your customer

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

s or retailers already. When you have cartons of products crossing the Pacific or Atlantic Ocean, those importers who already have buyers and signed contracts for those products sleep a lot better tha

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

those who will have to look for buyers when the shipment arrives.

But what exactly should that number be? Should 100% of it have been pre-sold? Or should it be 50% or even 25%? If y

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

u have too much uncommitted inventory sitting on shelves, it will not just tie up your cashflow but cost you mental stress and anxiety as well. If you don't have enough ready inventory on your shelves

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

you may not be able to fulfill new orders in a timely fashion. So what is a good balance?

There's no one-size-fit-all answer. It depends on a number of factors. By considering the f

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ive factors I listed below, you will increase your chance for success.

Factor #1. Cost of goods. I import Bali Sandals and sell them between $25 to $39. The cost of each pair of sand

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

ls to me is between $4 and $5. So, even if I only sell off 50% of my inventory, I make a profit. In other words, if your cost of goods is very low compared to selling price, you'll be ok with a lower

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

re-sold percentage. If your cost of goods is higher, you may want to have pre-sold a large percentage before you actually ship the inventory to the U.S.

Factor #2. Ease/difficulty locating bu

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ers. As you pound the pavement to get your initial orders before you actually import your inventory, you get an idea how easy or how difficult it is to find buyers for your products. For exam

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ple, I took my Bali Sandals to 10 boutiques and 7 ordered. That said to me the product was so unique they were easy to sell. So I was comfortable carrying more uncommitted stock. What is your experien

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

e in your initial attempts selling your product? Let that guide you how much uncommitted stock you will be comfortable with.

Factor #3. Seasonality. If you sell a seasonal product,

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

would not want to carry too much 'uncommitted' stock. For example, if you are selling beach products, you have a short 3 summer months to sell them. If you product is year-round and not perishable, I

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

have more leeway selling them off my shelves so I would be ok with a higher ‘uncommitted' percentage of stock.

Factor #4. Industry standard delivery schedule. Some markets accept lon

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

g delivery schedule. For example, in the women's apparrel market, bags or shoes business, retailers have been trained to order 3 to 4 months ahead. They order their Fall merchandise in July and they o

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

der their Spring merchandise in October.November. In a situtation like that, there is no need to carry ‘uncommitted' stock. When your clients are willing to accept long delivery times, you can order f

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

om your supplier after you have a signed order from your customer. You probably would not want to take this on-demand model to the extreme though because the per piece overseas shipping drops signific

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ntly if you can ‘bunch-up' your shipping to larger volumes.

Factor #5. Marketing channels. If you sell not just to wholesalers but have multiple marketing channels, it's like having

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

insurance if one particular channel doesn't pan out. I sometimes risk carrying extra uncommitted inventory so I can test out new marketing channels.

By now you will agree that the ratio
.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
g> of committed versus uncommitted inventory is not carved in stone. Consider these factors and use them to analyze your situation so you arrive at a balance that works for you.

If you miss i
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip
your first year, don't be discouraged. Time is the best teacher. With time, you will get to know your market, your buyers, your products and you will know that number at the top of your head

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Subjects - How Much Inventory Should I Import When I Start Out?

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