Store The Value Of Your Money In Inventory

Netscape Enhanced

The Wisdom Of Storing The Value
Of Your Money In Inventory

North: So, basically, if a person is saying, "What should I do with my money in the bank?" One of the things you can do is to buy the items that you know you are going to buy anyway, buy them now, and buy them when they are cheap. Buy them in bulk, and keep them. Instead of storing a legal document -- a blip on a computer that shows you are entitled to so many pieces of paper with presidents pictures on them -- you could buy the item you would have bought anyway. But you buy it at a better price because you are buying in bulk, so you get more of it anyway. And then you use the item.

If you are wondering about, "What do I do about my bank account? Shouldn't I have more money in the bank?" With the year 2000 problem I don't think people in 1999 are going to be saying that, they will be saying the opposite. "Let me get my money out of the bank!" But, even if they think, "Well, this isn't going to happen," they can then replenish the money in their account. I mean, if you are really in a jam, you can eat or use the product that you've bought, use that up, consume it, and meanwhile put that money back in the bank. As you save money in your basic family budget you use the savings to put back into the bank. And that's assuming that you get into this thing and you think, "No, it's not going to happen." If it goes up to the year 2000 and nothing happens, and you say, "There was sure nothing to that. No problem there," you've still got the asset. And so you simply build your bank account back up by consuming the items that you bought on sale.

Let me give you an example. My parents are out in the country and they use a lot of propane. They said, "What should we do with our money in the bank?" I said, "Well, one of the things you can do, (I think it is sensible for anyone in the country to do this) go get another tank of propane." Don't get it in the middle of the winter, or course, but in July when Propane is cheaper. Have them put in another 500 or 1,000 gallon tank. Fill up the old tank and fill up the new tank. You have bought it in the time of the year when you should be buying it anyway, which is in the middle of the summer. And then use it. You got a better price on it and now you've got it in reserve if there is a crisis. Instead of storing it in a bank on a computer chip or in a memory bank somewhere, you are storing it out back where you are actually going to be able to use it. Quite frankly, for the average person, there is so many items that a person goes through in a year that he could buy it in bulk if he wanted to when they are on sale at the store when they could buy a case instead of one item. Now, he becomes the source of the inventory. That is what I am trying to persuade people to do here.

I am talking inventory, because inventory is the Achilles heel of this system. Nobody has any inventory any more in anything. There isn't any inventory any more for the basics, or even the specialized items, except for maybe on a used car lot. That's about it. You don't see inventory anywhere else because everybody is using 'Just In Time Manufacturing' and 'Just In Time Delivery' systems to cut the costs of maintaining inventory. But the risks have gone up exponentially because of the problem of the year 2000. It was safe to do it, or it seemed safe to do it, before more of us found out of the risks involved. And not enough of us have found out.

We are now in a situation when the entire manufacturing and distribution system of the industrial world's economy is tied to a particular system of manufacturing and delivery, and we can not readjust, and we will not readjust until we are forced to readjust and that readjustment is going to be called in the history books "A Millennial Catastrophe." If I'm wrong, and if it isn't going to happen, many will muddle through, but it still is not a bad idea to have a basic inventory of the items you are going to use anyway.

Portela: It's common sense. The United States has been blessed with one of the cheapest food supply systems of the world. If we will use bulk grains it will cut the cost of our weekly food budget dramatically. We sell a cookbook called "Feed a Family of Four for $10 a Week." And it tells you how to do it. You just got to use the bulk grains. You've got to get away from the convenience foods in the grocery stores. And yes, it may be a shock to some people to try that, but if we ever had to live on our food reserves, that's exactly what we will be doing. It will be more healthy for us, we will get rid of the high fat diet that everyone seems to eat, and I think people would be amazed at how well their systems can cope, and how healthy they can be if they learn to use these foods. We need to grow sprouts and make our own bread, getting more fiber in our diets.

Max's Law: "Buy the best, pay cash, take delivery."

North: I'm looking at your web site. You have put a counter up, so I'm going to quote it since it's a public document. It says, 9,891 people have visited this site. So let's round it off to 10,000. If only your customers who have visited this web site were to turn around and order a year supply of all of these items, in addition to whatever you pick up from tapes like this, would that be a major pressure on you for delivery, that is, 10,000 new orders for a year supply of food?

Portela: Well, it depends on the size of those orders and whether they are a group order or an individual family order.

North: Let's say it is your typical order, whatever is an average order.

Portela: My typical order is a group order that comes from a church group, co-op, or maybe a small business. That type of order can be anywhere from 5,000 to 20,000 lbs. So if you get a few hundred orders like this, it takes your capacity for the entire year, and it maxes out your production capability immediately. My web site, Gary, has only been up for about a year, and no one really knows it's there.

North: I know that. You see, my concern is you got 10,000 hits. Now, that's probably not 10,000 people, that's probably 3,000 people who have come back a couple of times, some of them. Let's say 5,000 people have actually visited and learned about your business. They have visited the thing. Word will spread and I'm just looking at your existing customer base. This all tells me that if you never recruited one more new person, and if news reports pushed your existing customer base to double up and come back and do it again, we would probably have to get in line again.

Portela: It would happen within two or three weeks if that scenario hits, Gary. I am mailing out a new price list to everybody in my data base, this coming Monday. It's the middle of March in 97. I'm introducing my web site to these individuals now. I don't know what kind of impact that may have. But at least it is going to be a good way to get information to people other than just doing it through the mail.

North: It's a very, very good web site, very comprehensive, as far as introducing you to all the stuff you need. I might have designed it differently if I had just been after sales, but for at least giving options to people, it's comprehensive if they know what they want. It is a tremendous service. The web has made it much, much easier for people. And, as you know, a person can simply click and mail your entire web site to a buddy, and that takes like ten seconds. He can mail, literally your first page, your web site address off to a friend, which in effect is to mail your entire web site which is hundreds of pages. In effect he's mailing that free of charge to a friend. It is an amazing thing how word of mouth can spread through the web.

The reality that I'm getting back to constantly is that people have to make decisions when they hear about something, when they can afford to. If it is a crucial thing, you do it. There is an old rule. I call it Max's law from a guy named Max Blumert. Old Max used to say, "Buy the best, pay cash, take delivery." That is a great rule. And I think that is how you do it. So, when you do hear about it, you take advantage of it when you can do it. Especially in a case like this, the price savings are so tremendous, compared with buying it at the store, that you ought to do this even if there wasn't a crisis coming.

Portela: It is the only way to save money on your food budget. It seems like the husband has to work and the wife has to work just to make ends meet. Things have gotten tighter, things have changed. That food budget is a big key to this. Absolutely, you can really cut down on that if you will just get some wisdom and knowledge and then find some place to buy these grains, and learn to use them.

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