Late-season salt inventory is always a topic of discussion as the end of the season approaches. Some don’t have the storage or desire to keep inventory of salt or bagged deicer on hand through the offseason. Others see it as an opportunity to stock up for next season, while vendors might be looking to off-load their final inventories to make room for new stock. There is no right or wrong approach, but there are a few things to consider.
Do you have storage that keeps the materials out of weather and eliminates the probability of runoff and spoilage? Environmental concerns are real and of increasing scrutiny as it relates to chlorides. Without proper storage facilities that aren’t needed for summer activities, managing these concerns with carryover inventory could be costly in dollars and image.
Cash flow is king, and all businesses must pay attention to it. All inventory consumes cash and stretches cash flow because we have costs that we aren’t billing for a period of time—in this case, months of time. If you feel you have the cash to inventory materials over the nonsnow season to mitigate the logistical challenges of preseason planning and deliveries, that’s great. However, confirm this is the case by projecting your cash flow through the non-snow season and understanding the implications of "storing cash" over the summer.
Current vs. future purchase costs can be hard to project. Salt is a commodity, and trend data is available for you to make an educated projection about next year’s cost. This is always subject to market factors (e.g., war, weather events, etc.) that might influence the trend. Determining if the current purchase cost at season’s end is worth the investment is probably the trickiest consideration.
Quality can fluctuate year to year, supplier to supplier and beginning of season to end based on several factors. Sometimes late-season salt and bag deicers are of lesser quality than the materials we started out with at the beginning of the season. They have been sitting longer, and often in more inclement weather, which can result in clumping or even solid bags of material. Being aware of the material quality before you commit to carrying it in non-season inventory is certainly a good idea.
Whether you choose to carry deicer inventory over into next season, understanding the factors that will impact your decision-making is always the place to start.
David Gallagher is principal for Spiritus Business Advisors. He has over 25 years of experience as a senior service-oriented leader on all aspects of property service. Contact him at david@spiritusba.com.